The SupplyChainBrain Podcast

The new set of locks at the Panama Canal is open for business. How will it affect North American shipping patterns? A year and a half late, hugely over budget and bearing serious questions about its design and construction, the widening of the Panama Canal is finally complete. When first announced a decade ago, the project promised to alter the way in which ocean cargoes moved in and out of North America. U.S. West Coast ports, in particular, were expected to lose large volumes of business to their East and Gulf Coast counterparts, with shippers opting for the cheaper (if slower) all-water option from Asia. But what is the actual impact, both short-term and long, of a wider canal? On this episode, we get a perspective from David Egan, head of industrial and logistics research for global commercial real estate giant CBRE. He speculates on who the winners and losers will be – specifically, what East Coast ports must do to take advantage of the improved route, and how West Coast ports can defend their market share. But the shift might have begun long before the new locks opened, he says.

U.S. businesses have been given another legal recourse, in their never-ending battle against trade-secret theft. The Defend Trade Secrets Act of 2016 was signed into law by President Obama in May. It provides companies with a civil cause of action, in addition to the federal criminal statutes that are already on the books. The measure is especially important because it allows business to act more quickly than before, with a successful resolution depending on law enforcement's ability to act before the thieves get away with their ''loot.'' On this episode, we speak with Frank Cullen, executive director for U.S. intellectual property policy with the Global Intellectual Property Center of the U.S. Chamber of Commerce. He explains why the law represents a major victory for American business innovators. In addition, he helps us to understand just what constitutes a ''trade secret,'' and reveals some of the findings of a new report by the U.S. Chamber on the global impact of counterfeiting.

A higher minimum wage – in some cases, as much as $15 an hour – is a certainty. How can businesses, especially retailers, cope with it? The minimum wage is rising fast, mandated by new laws at the federal, state and local levels. Some retailers are voluntarily raising their own workers' wages, either because they consider the move inevitable, or are looking to polish their brand. They might have even come to the realization that there's a price to be paid for low wages, in the form of high turnover, low productivity and inadequate talent. Voluntary or not, retailers are facing mandated wage increases of between 30 and 40 percent, only a small portion of which can be recovered through higher prices. On this episode, we talk with Deniz Caglar, a principal with PwC's Strategy practice. He shares some strategies that companies can adopt to offset higher wages, and remain profitable. Bottom line: They'll be forced to question their entire business models, and look at operations – including the extended supply chain – holistically.

Levels of risk in global supply chains continue to rise – even as companies' commitment to managing it goes in the opposite direction. A new report by A.T. Kearney and Rapid Ratings International finds that supply-chain risk management has declined as a priority within procurement organizations. Given the rash of supplier failures that occurred during the Great Recession, that's a difficult trend to understand. The top performers have implemented aggressive programs to deal with any number of potential supply-chain disruptions, but many others are falling short in that effort. On this episode, we talk with the co-authors of the new report, Rose Kelly-Falls, senior vice president of Rapid Ratings, and Carrie Ericson, vice president with A.T. Kearney Procurement and Analytic Solutions. They offer an explanation as to why companies aren't paying sufficient attention to risk management, discuss the macro trends affecting global supply chains, and lay out a means of quantifying the financial health of suppliers. Find out why ''there’s no glory in supply-chain risk management.''

Struggling to determine whether there's forced labor lurking in your supply chain? There are some new tools available to help you do it. Global companies have long striven to uncover violations of human rights – and human slavery in particular – throughout the multiple tiers of their supply chains. Two new publications offer benchmarks, assessments and methodologies for achieving success: the Corporate Human Rights Benchmark, and a series of reports from KnowTheChain on the existence of forced labor. On this episode, the second of two covering forced labor and slavery in supply chains, we speak with Pierre-François Thaler, co-founder and chief executive officer of Ecovadis. He returns to the podcast to explain how these new rating systems will work, and how they can provide a competitive incentive for compliance by manufacturers and retailers. He also discusses the latest regulations in this area, and offers tips on how companies can proactively assess, measure and eliminate forced labor from their products. Failure to do so entails severe consequences, and the regulatory regime is only going to get tougher.

Forced labor continues to be a serious issue in global supply chains today and it's extremely tough to root out. The problem exists worldwide, in developed and developing nations alike. Estimates of the number of people engaged in forced labor today range from 21 million to 35 million. Illicit traffickers are profiting from the practice to the tune of some $150bn. So how can this blight on the global economy be erased? In this first of two podcasts on the issue, we speak with Kilian Moote, project director of KnowTheChain at Humanity United. He describes three new reports being released over the summer of 2016, covering the presence of forced labor in information and communications technology, food and beverage, and apparel and footwear. The reports' authors polled global companies in an effort to divine best practices and policies for eliminating forced labor and human slavery worldwide. Moote reveals where the biggest risks lie, and talks about the challenge of identifying the presence of forced labor in global, multi-tier supply chains. When it comes to eliminating the practice, he says, ''We're at the end of the beginning.''

Up in the sky – it's a solar-powered plane! But what does it mean for the sustainability of the commercial transportation sector? The Solar Impulse 2 is currently on a 21,747-mile journey around the globe, powered only by the energy of the sun. But the project, 10 years in the making, is about more than proving that a small, specially designed plane can successfully draw on a renewable energy source. The aircraft consists of a wide range of innovative materials, many created by Covestro, a supplier of high-tech polymer products. Richard Northcote, chief sustainability officer with Covestro, joins us on this episode to explain how the company dramatically reduced the plane's weight while installing materials that provide an unprecedented degree of insulation and comfort to the pilots. Even more importantly, the innovative materials used in the Solar Impulse 2 have major implications for the transportation industry as a whole. They're lighter, stronger and more sustainable than anything used in traditional aircraft and ground vehicles. Even carbon dioxide can be used in the production of mattress foam, leading to a 30-percent cut in the use of oil. Find out what the Solar Impulse 2 means for the future of all modes of transport.

Retailers are shelling out huge amounts of money to keep today's omnichannel customer happy. They're spending an average of 18 cents out of every dollar to meet customer expectations of ''buy anywhere, pick up anywhere.'' That's according to a new study from EKN Research in partnership with Aptos, Inc., which set out to determine to true costs associated with the modern-day order-management lifecycle. On this episode, we're joined by Dave Bruno, director of marketing with Aptos, and Sahir Anand, vice president of research and principal analyst with EKN. They explain the findings of the study, which can be found in a new e-book, Threat … or Opportunity: Seven Steps to Overcoming the Shockingly High Costs of the Order Management Lifecycle. They explain how retailers are racking up costs as they struggle to balance store fulfillment with online orders, and home delivery with in-store pickup. The complications of the omnichannel aren't going away, they say. And it's about more than just free shipping. Will they be able to stay in the game against Amazon.com, Inc.?

The ride-sharing service Uber is threatening to disrupt, if not dismantle, the taxi business. Will it do the same to the package-delivery sector? Uber, Lyft and similar ride-sharing services fully deserve that already overused word, ''disruption.'' Their success is due in large part to their founders' ability to perceive a failure in the way that traditional taxis have operated. Now, there's talk that the Uber model could be similarly applied to freight transportation. In theory, Uber drivers can just as easily carry packages from retailers to the consumer's door. Perhaps they could even skirt many of the regulations that hamper that business. On this episode, we talk to Scott Nelson, vice chairman and founder of Trax Technologies. He explains why an Uber-like service can't necessarily work for logistics. It's all about the need for ''perfect information,'' he says. At the same time, Nelson offers his view on the real transformation that logistics is undergoing today – and how the business can be reshaped to create a ''win-win'' model for buyers and sellers alike.

Too many ships, too much rate discounting, and too many service providers for the market to support: the outlook for ocean carriers is ''pretty bleak indeed.'' Those are the words of Foster Finley, managing director of AlixPartners, who joins us on this episode to discuss the consultancy's new study on the state of the oceangoing container trades. Its conclusion: Carriers' financial state ''will likely worsen in 2016, and the only thing apt to cure the industry's malaise is further consolidation.'' Years of emphasizing market share over profitability, coupled with a relentless increase in vessel size, are taking their toll on carriers. The argument that bigger ships slash operating costs only holds water if supply and demand are in rough balance, and carriers can exercise some measure of discipline in their ratemaking. Neither of those requirements is in evidence today. Rates are far below what carriers need to break even, let alone make back their cost of capital, and overcapacity persists. How did they get into this state of affairs, and what will it take to right the sinking ship?