September 2019

ICYMIM: September 16th, 2019

Source One's series for keeping up with the most recent highlights in procurement, strategic sourcing, and supply chain news week-to-week.  Check-in with us every Monday to stay up to date with the latest supply management news.

How Risks and Technology are Reshaping the CFO Role
Elaine Morris Roberts, Spend Matters, 9/10/2019
Advancing technology is allowing the CFO role to evolve with it. Rather than focus on tedious tasks that can now be performed in more tech-savvy ways, CFOS can focus on predicting and assessing results. Elaine Roberts explains how risk technology is giving CFOs more power and knowledge to strategize smarter.

Outsource Your Culture to Speed up Digital Transformation
Graham Fell, Future of Sourcing, 9/11/2019
With the right tech decisions, culture advancements have the power to speed up digital transformation. It is predicted that by 2021, CIOs will be responsible for these cultural changes and seeing that their company culture reflects their digital growth. Graham Fell emphasizes the importance of elevating culture during this digital renaissance period.

Charting A New Journey With Shared Services 
Alec Kasuya, Future of Sourcing, 9/05/2019
Those who want the competitive advantage of automation will find that shared service centers (SSCs) are a valuable tool to invest in. Todays's shared services have proved to be innovative and strong as they overcome 5G infrastructure challenges and double down on global business services. Alec Kasuya shares his insight on the exciting future of shared services and some after-effects to look out for.  

The current indecision and uncertainty swirling around the United Kingdom's decision to leave the European Union has global markets on edge. The economic power of the U.K. makes it an important part of many global supply chains, and the fact that it's not clear what comes next in its ongoing Brexit drama leaves lots of lingering questions.

Given the long runway a U.K. withdrawal from the EU has necessitated, companies at various steps of the supply chain have had plenty of opportunity to strategize for just about any kind of outcome, according to Venture Beat. The same has been true, in large part, of the unpredictable changes to tariffs between the U.S. and China, but Brexit poses a unique problem because of the number of potential different paths forward.

Brexit could have a major impact on global supply chains.Brexit could have a major impact on global supply chains.
What's almost guaranteed as part of this entire process, however, is companies can expect products to be delayed for longer as they enter or exit the U.K., and already many within the country are stockpiling inventories - at higher costs to themselves, the report said. Consequently, many businesses may benefit from taking a holisitic look at their operations and determining the best path forward for every decision from a negotiated leave, or a no-deal Brexit that creates potentially major problems.

Where it stands
Currently, the nation is on track to pull out of the EU at the end of October, potentially with no deal to do so in place, according to Bloomberg News. The U.K. is now issuing warnings about the potential fallout from such a decision, including the risk of running short of fuel, food and even clean water. Consequently, prices are likely to rise - possibly by considerable margins - and such issues could be exacerbated by the arrival of colder weather in late autumn and early winter (which requires more use of electricity and fossil fuels), as well as food demand spiking around the holiday season.

Currently, the U.K. government estimates wait times at its ports could at least double on the first day after exiting the EU, creating a backlog that could last as long as six months, the report said. During that time, drug imports in particular could slow to a crawl, and potentially increase prices dramatically. Even financial services are expected to be impacted by a no-deal Brexit.

What can be done?
Right now, the U.K. gets about 40% of all its food from the EU or trade deals negotiated through it, and while the government expects shortages to be limited in scope, they will likely persist nonetheless, according to The Grocer. However, those in the food supply chain may have difficulties predicting how to react because shortages around a Brexit in October or January likely wouldn't be as impactful as one later in the new year, such as March.

The more companies can do to strategize for just about any type of Brexit - regardless of when it happens in the next several months - the better off they will be to navigate the supply chain snags that are almost guaranteed to come with it.
In a tech-enabled era, direct mail can look like something out of the past. Research suggests, however, that a tangible, physical piece of marketing collateral is more likely to generate a response than an email.

Want to ensure your next direct mail reaches and inspires the right audience? Check out the infographic below for some tips. 

Your supply chain management (SCM) team needs market intelligence to assess how it's performing, how the competition is performing, and how the business can better gain a competitive advantage. This information is crucial and will help you manage spend and supplier relationships more strategically. 

 In Part I of our series Market Intelligence Series, we discussed the various skills each individual on your team should possess to identify and assess data effectively. Once you’ve found your dream team, you’re going to need to determine what exactly you are trying to find. Market intelligence will help you get a better hold on your own company, your competitors, and your industry as a whole. That’s a lot to cover-- and it's part of why market intelligence comes in many forms.

Your data could come in the form of global market data, industry benchmarking information, or an overall assessment of current market pressures and risk factors. In any event, you’re going to need to identify which metrics will be most relevant to your project at that specific time.

Today we’ll discuss how you can determine the right criteria. You want to establish metrics that will keep track of how your current strategy is performing and resonate with stakeholders across the business. The metric-establishing cycle should look as follows:

1.      Identify what methods you will you use to examine your data.
2.      Analyze these methods to see how they will play out.
3.      Apply the proposed methods.
4.      Continue to develop methods for testing hypotheses to predict results.

Because different initiatives call for different definitions of success, you should expect that your metrics will fluctuate from project to project. You will also have different types of metrics within a single project. There are two major types of metrics: hard metrics and soft metrics.

Hard metrics are used to measure tangible things; usually, it involves quantitative data that can be easily visualized. A typical example of hard metrics would be actual hard dollar savings projections or the measure of how long a product took to be produced this quarter versus a past quarter.
  • Were we able to sell more of product A or product B?
  • Did it carry out a process more quickly than usual or more slowly?

Soft metrics are used to measure more subjective and indirect results. Soft metrics do not consist of hard statistics and are usually harder to obtain and envision. An example would be an analysis of a product’s end result.
  • Will talking this action help our corporate reputation?
  • Do we think embarking on that partnership will increase our opportunities for innovation down the road?
Determine what goals you have, and the best way to measure the achievement of said goals. After you establish that plan, your unique strategy will contain a combination of both hard and soft metrics. There is no universal equation, so if you follow these best practices and notice that your data points look different from another project, don’t panic. You’re probably customizing appropriately which means you’re one step ahead of the game. 

Establishing the proper metrics for each project is essential for productivity. If you fail to measure the effectiveness of a strategic approach, you run the risk of wasting time and using methods that just are not working for your company. Or worse, you’re overlooking the most valuable lines of attack your team has produced. You don’t want to under utilize a strong plan and overplay a weak one. See that your team is properly gauging the success of your projects and consistently generating ideal results.

Now that you know what characteristics to look for in your team and what metrics to look for in your data. Stay tuned for the third installment of the Market Intelligence series. We're going to focus on how to ask all of the right questions.

In recent years, the concern over global climate change and the impact current economic and industrial systems have on the environment has become impossible to ignore. As such, a large and seemingly ever-growing number of companies and organizations are looking at every one of their processes to see if there are ways they can increase the eco-friendly nature of the way they do business.

For one thing, the concern about the widespread forest fires in the Amazon have led many companies to reconsider their approaches to working with the cattle ranching and other agribusinesses operating out of Brazil, according to Fast Company. The impact of the deforestation needed to maintain and grow those farms to meet demand is significant enough that many companies have already begun to curtail their engagement with products like leather and soy from Brazil, but compounding that with the concern about the massive size of these fires has led many major global firms to reconsider even more of what they've done.

Going green should be key for any company in the near future.Going green should be key for any company in the near future.
However, that effort isn't always easy, and businesses increasingly have to handle data on the smaller supply chains that feed into their larger ones to fully understand the impact their business has on the environment, the report said.

"In Brazil, we've used mapping software, we use a lot of data, to show where different tiers in our supply chain are physically located, and the path that different materials take from hide to finished leather," Sean Cady, the apparel giant VF Corporation's vice president of sustainability and responsible sourcing, told the magazine.

What's the benefit?
With massive multi-national corporations scaling back global supply chains and sourcing from regionally centered efforts in an effort to "go green," many industries around the world are actually picking up steam these days, according to Supply Chain Digital. The sporting goods brand Decathlon recently identified Southeast Asia as a market for expansion and has largely focused on sourcing materials from neighboring countries, which not only has less environmental impact, but can turn around shipping times much more quickly.

Meanwhile, the company itself is also striving to reduce its consumption as much as it can; more than half of all energy used by its main headquarters comes from solar power, and it has enacted efforts to reduce and recycle wastewater, while also collecting rainwater, the report said. As a result, many of Decathlon's ongoing costs have fallen by half.

What comes next?
Experts say that one of the next big frontiers in reducing waste and "greening" the global supply chain is to reduce use of plastic, Supply Chain Digital further noted. Globally, companies push through some 300 million tons of plastic annually, and only about 9% of it is recycled. Global brands like Coca-Cola and Nestle have already committed to cutting plastic consumption and increasing recycling efforts within the next several years, and many more are likely to follow in their footsteps whenever feasible.

With all this in mind, it's vital for companies to examine how they interact with their own supply chains and do more to ensure they're reducing both their carbon footprint and use of non-recyclable or biodegradable materials going forward.

Yesterday, Apple introduced the latest generation of its flagship smartphone - the iPhone 11 Pro. The newest features of the 11 Pro include stronger battery life, water resistance, the ability to shoot 4K video, and three multi-functional 12 MP cameras. One of the most surprising aspects is that the smartphone will sell for only $700. That’s less than the iPhone 10 whose retail price was $750 at its unveiling last year.

The product launch keynote not only showcased the iPhone 11 Pro’s shiny, new features but the latest iPad Pro, the Apple TV+ streaming platform, and another series of Apple Watches. These announcements didn't shock spectators. Since 2011, Apple enthusiasts have learned to expect a new iPhone generation launched every September. The story behind the lastest iPhone, however, could draw less positive attention.

Foxconn has served as Apple’s largest product manufacturer for over a decade. The Chinese factories, commonly referred to as “iPhone Cities,” are being accused of breaking labor laws in order to crank out the new iPhone 11s.

The most glaringly obvious of these alleged violations relates to the number of dispatch workers the factory currently employs. Dispatch workers are temporary employees assigned to a company from an agency. China Labor Watch asserts that the country’s labor laws only allow dispatch workers to provide 10% of an organization's total workforce. They account, USA Today reports, for half of FoxConn's.

According to the Observer, who charged Amazon with similar violations in 2018, dispatch workers don’t have the same rights as permanent employees which makes them especially vulnerable to exploitation. Not only can these workers be laid off during periods of low production without compensation, but they don’t receive benefits like paid sick leave or holidays. Labor right inequalities make dispatch workers an easy target for manufacturing companies trying to fill the production quotas for tech giants like Apple and Amazon.  

In addition to the dispatch worker issue, labor activists are accusing Apple of failing to offer a living wage for Foxconn factory workers. Workers are making a meager $1.68 US per hour and $2.52 US for overtime hours. China Labor Watch deemed this wage “insufficient to sustain the livelihood for a family living in Zhengzhou city”. Maybe that’s why the iPhone 11 is cheaper this year?

On Apple’s Supplier Responsibility site, they state, “We require our suppliers to treat their employees with dignity and respect. They must provide fair working hours, a safe workplace, and an environment free from discrimination.”

Foxconn surely is not helping Apple live up to this standard. Both companies have confirmed the allegations that the tech giant exceeded the dispatch worker limit. Apple stated that, upon internal investigation, they will resolve the issue immediately. 

Actions speak louder than words. After all, this isn’t the first time that Foxconn has weathered labor law controversies. In 2010, Foxconn factories were the site for an alarming number of worker suicides. These were thought to be an effect of sweatshop-like working conditions and resulted in the construction of now-infamous "suicide nets." Furthermore, labor activists have been probing Foxconn for years claiming that they underpay workers, assign excessive overtime hours, and rely on underage employees—some as young as 14.  That's not to mention deaths due to workplace accidents and explosions. 2012 alone saw more than 20 of those.

Considering Foxconn’s checkered history, Apple’s ethical reputation may be at risk. The latest news happened to drop just hours before Apple’s iPhone 11 announcement. Perhaps the coincidental timing will alarm consumers and push Apple to take a long look at its manufacturing partnerships. Doing so could help them better serve a new generation of consumer, one that's insistent upon supply chain ethics and responsibility.

Hurricane Dorian has finally died out, but it created a number of hang-ups for American supply chains. Some clear disruptions were seen as the storm made landfall in the U.S., and experts now say more disruptions may develop in the weeks and even months ahead.

One of the big issues around Dorian is it disrupted short-term supply chains many retailers rely on heavily at this time of year in particular, according to CNBC. As a consequence of the damage the storm wrought in the Carolinas and further up the Eastern Seaboard, back-to-school shopping numbers are likely to take a big hit, meaning department stores, and just about any other business that sells non-necessity products will see sales numbers stumble. Meanwhile, grocers and home improvement retailers are likely to see the lion's share of the expenditures going elsewhere.

Dorian proved to be a major disruption for U.S. supply chains.Dorian proved to be a major disruption for U.S. supply chains.
One estimate from Planalytics showed U.S. consumer spending could take a hit of as much as $1.5 billion from Dorian, with foot traffic to outlet stores falling nearly a third, and a quarter at apparel stores, the report said. Even Walt Disney World near Orlando, which had to reduce hours around the storm's arrival, likely lost out on significant revenues. While spending is likely to rebound in the aftermath of the storm, it could take months or more for companies to see the total amount they lost return to them.

Another industry disrupted
One sector in particular that was likely hit hard by Dorian's arrival is big pharma, which has a huge footprint in North Carolina's so-called "Research Triangle" - the area encompassing Raleigh, Durham and Chapel Hill, according to local radio station WRAL. To that end, the federal government recently issued a request for more information about how the storm potentially disrupted the industry's various supply chains.

"In efforts to ensure a full common operating picture for response to Hurricane Dorian, we are reaching out to request products that could inform our awareness of biomedical facilities within the potential impact areas," John Sellers, a program analyst with the U.S. Department of Health and Human Services Division of Critical Infrastructure Protection, wrote in a recent email to the Biotechnology Innovation Organization and similar groups, according to the station.
The hope is that such data can help HHS better determine strategies to deal with these disruptions in the future, and the intitiative has been ongoing since at least Hurricane Florence made landfall last year, the report said.

Huge impact up the coast
As Dorian first made landfall and then slowly progressed north, many ports on the East Coast had to shut down operations, placing major delays and disruptions on deliveries shipped goods, according to supply chain management expert Richard Howells, writing for Forbes. When this happened, ships handling both imports and exports either had to stay in place or re-route to safer harbors, creating significant headaches for shippers not only in the U.S., but around the world.

Certainly, the hurdles caused by Dorian aren't just limited to the supply chain, and it may take months or more before the full impact the storm brought with it becomes apparent.

With a lethal, highly contagious disease sweeping parts of Asia and Eastern Europe, some of the world's most prominent food executives are wondering what the fallout could be on the meat supply chain and how to ensure what's unaffected remains that way.

The virus is called African swine fever, a haemorrhagic disease that's endemic to domestic and wild pigs. It can be spread very easily, whether by coming into direct contact with diseased animals or indirectly, such as through handling of tainted food waste, feed or biological vectors, according to the World Organization for Animal Health.
"Pig herds fell 32% this past July compared to 12 months earlier."

Although the contagion hasn't affected North America, it's reached every province in China, which is the world's largest pork producer, Reuters reported. Indeed, based on data from the country's Ministry of Agriculture and Rural Affairs, pig herds shrank 32% this past July when contrasted with the same month in 2018.

It's the rate at which African swine fever has spread that's raising red flags for Hormel CEO Jim Snee.

"Uncertainty in the protein industry is related to the outbreak of African swine fever," Snee explained during a recent earnings call, as reported by Supply Chain Dive.

During the same call, Hormel Chief Financial Officer Sheehan echoed Snee's comments, noting the virulence of the strain has led to volatility within the meat and protein industry. That unwelcome trend is expected to remain in place for the foreseeable future.

Surge in pork prices
This volatility has been evidenced by reducing pork supply, which has caused prices to swell considerably. Per data from Shanghai JC Intelligence, the national average price for pork reached $3.48 per kilogram on Aug. 19, Reuters reported. That's well beyond the $2.93 per kilogram recorded when August began, surpassing a previous record high set in 2016.

Pan Chenjun, senior analyst at Rabobank, told Reuters that while price fluctuation isn't out of the ordinary for pork products, but the fact that it's occurring earlier than normal poses an issue.
"The timing is earlier than expected," Chenjun explained. "August is still the low season but now everyday we see an increase in price."

Tariffs playing a role
While the volatility is no doubt predominantly linked to the contagion and its resultant dip in supply, it may also be attributable to the ongoing trade dispute between the world's largest economies in the United States and China. As referenced by Supply Chain Dive, the U.S. typically exports more pork to China than it imports, but the tit-for-tat between the two countries has led to a tremendous amount of instability and straying from the normal flow of commerce. What happens next remains to be seen. Pork suppliers are hoping for some type of resolution.

"If the tariffs are removed, the U.S. pork industry will likely benefit directly," Tyson CEO Noel White stated during a recent earnings call, according to Supply Chain Dive. He added that should the tariffs remain in place, pork suppliers will have to restrategize in order to keep the supply chain as minimally affected as possible, whether that's through backfill or other real allocation opportunities.
Meanwhile, a looming tariff dispute between the U.S. and Japan has been put on ice after Prime Minister Shinzo Abe and President Donald Trump hashed out a deal in principle. As reported by Bloomberg, the trade agreement, once finalized, would eliminate tariffs installed by Japan on American beef, pork and other agricultural products. In return, the U.S. would make more wheat and corn available to Japan for purchase while also tabling levies on Japanese-produced cars and trucks.

Do you feel like your procurement team is capable of meeting expectations? If you aren't sure, you aren’t alone. According to a survey by Deloitte, fewer than half of Chief Procurement officers are confident in their teams. This lack of confidence could stem from flaws in Procurement's recruitment processes and talent management priorities. 

72% of organizations are spending less than 2% of their budgets on developing their Procurement resources. And those that do focus on optimizing their teams are often neglecting the all-important skills that will define Procurement's next generation. 

The traditional skills that drove Procurement through its tactical past aren't enough anymore.  While it's still crucial that Procurement folks know how to fill out a purchase order and wade through spend detail, so-called 'soft skills' are more important than ever. Interestingly enough it's evolving digital technologies that have made these uniquely human qualities so valuable. 

Creativity, adaptability, and emotional intelligence are the skills that machines can't replicate. They're also increasingly relevant in a world where Procurement is tasked with mitigating risks and managing relationships. Bennett Glace, a member of the Source One team, identifies six especially important soft skills in a new blog for Future of Sourcing. 

Read "Soft Skills Make a Real Impact in Supply Chain Management" to learn more about the skills you should nurture to build a truly best-in-class organization. 

This guest blog comes to us from David Madden of Exchanger Hub.

With rapid e-commerce growth and more packages on the road than ever before, more companies are outsourcing their shipping services to third-party logistics companies in order to save money, improve customer service and streamline their supply chains. The global 3PL market is expected to be worth $935.31B by 2020 and shows no signs of slowing down.

If your company is thinking of investing in 3PL, there are plenty of factors to keep in mind. This company will be responsible for delivering packages to your customers and, ultimately, will become the face of your business. Use these tips when searching for a 3PL provider, so you can find the right partner for your business.

1. When Should You Invest in 3PL?

Before you start searching for a 3PL provider, you need to make sure this investment is the right choice for your business. Many companies lack the assets necessary to deliver their own products to customers. Investing in 3PL simplifies the shipping process, helping these companies focus on improving their products and services.

Ultimately, investing in 3PL should save your company money and increase your bottom line. You should compare the cost of delivering these goods yourself with the cost of investing in 3PL. If you decide that investing in 3PL is the right choice for your business, your 3PL provider should have a track record of helping clients reach their business goals, usually by improving customer service and increasing the number of sales.

If you’re new to the world of shipping and supply chain management, you’ll probably be better off hiring a 3PL provider. Keep these considerations in mind when comparing different providers.

2. Is Your 3PL Financially Stable?

Your 3PL provider should have a solid business model that guarantees their long-term success. Nothing could be worse than having a 3PL fall apart on you, completely derailing your ability to deliver packages and meet your customers’ needs. It’s not uncommon for new clients to ask 3PL providers for a financial statement or a list of current and previous clients. You can use this information to make sure the company will be around for the foreseeable future.

You can also find out how the company tends to deal with its partners. Do they have trouble making payments to the 3PL provider or do they regularly dispute compensation? Look for providers with a strong financial portfolio and lasting partner relationships.

3. Does Your 3PL Have a Good Reputation?

Talk to some of the providers’ partners to find out if they can deliver on their promises. Does the company have a long history of fulfilling orders on time? If they occasionally run into trouble delivering packages, what was the reason for the delay? How does the company respond to delays, so they don’t happen again in the future? The company should keep their warehouse organized to make sure they can deliver goods on time.

They should also pack their shipping containers carefully, so they arrive at their destination in mint condition. Research the history of the company to make sure they can meet your needs.

4. Does Your 3PL Have a Central Location?

Choosing a 3PL provider with a central location or multiple distribution centers is key to a successful supply chain strategy. Learn about the kinds of assets the company uses to make deliveries, where your products will be stored as they make their way through the supply chain and how quickly they can reach their destination. Ideally, the company’s warehouses and distribution centers will be close to major highways, airports, ports and railways to speed up the fulfillment process.

5. Can Your 3PL Scale with Your Operations?

Hopefully, your company will grow in the future, so you need to find a 3PL provider that can scale with your business. If your company suddenly takes on a slew of new customers and orders, launches new products or wants to offer faster delivery options to compete against the likes of Amazon, will your 3PL provider be able to keep up? Talk with executives from the company to learn more about how quickly they’ll be able to scale with your operations. Use big data and predictive analysis to better anticipate your needs and share them with your 3PL provider.

6. Does Your 3PL Have the Latest Tracking and Supply Chain Equipment?

Think twice before investing in a 3PL provider that doesn’t use the latest supply chain technology, including automatic pickers and stockers, supply chain management software, GPS trackers and the IoT. These devices are designed to create more transparency and reliability in the supply chain, so you and your customers know exactly where your products are at all times. 

If your 3PL provider doesn’t offer services such as real-time tracking or expedited shipping, you will likely have trouble meeting your customers’ needs, especially if your competitors and their 3PL providers offer these services. 

7. How Will You Monitor Your 3PL?

You also need to figure out how you’re going to audit your 3PL provider. Set up an internal team that’s responsible for monitoring the company, including their ability to deliver packages on time. Ideally, you should have regular access to this data, so you can hold the company accountable if they regularly lose packages or run into unexpected delays. 

You should also be able to track the success of your investment in 3PL, including the impact on sales. Over time, you should see a noticeable uptick in sales and customer service rates as your 3PL provider expands your company’s ability to service your customers. 

You’ll also need to reach representatives from the company on a regular basis to make sure everything is going smoothly. You’re bound to have questions along the way, so reliable communication is essential to a successful partnership. In fact, 73 percent of shippers interact with their 3PL on a daily or hourly basis. Come up with a game plan for keeping in touch with your 3PL provider, so you can stay in the know every step of the way.

Stay Competitive

More companies are investing in 3PL than ever before. Compare different providers to make sure your company is investing in a reliable shipping partner that can help you accomplish your goals, so you can stay ahead in an increasingly competitive industry. 

Author Bio: David Madden is an efficiency expert, as well as being the Founder and President of Container Exchanger. His passion and business is to save companies money through the use of used reusable and repurposed industrial packaging such as plastic and metal bulk containers, gaylord boxes, bulk bags, pallets, IBC totes, and industrial racks. He holds an MBA as well as a certificate from Daimler Chrysler Quality Institute for completion of six-sigma black belt training.

ICYMIM: September 9th, 2019

Source One's series for keeping up with the most recent highlights in procurement, strategic sourcing, and supply chain news week-to-week.  Check-in with us every Monday to stay up to date with the latest supply management news.

How AI in healthcare supply chain management (SCM) can cut costs
Alex Behrens, Spend Matters, 9/9/2019
It is no surprise that tech has been the main factor evolving the health care industry over the years. While new-age tech has been able to drastically broaden medical possibilities, it has also proved to be a powerful cost-reduction tool. Alex Behrens teaches us a lesson in procurement and discusses how AI is being used in the healthcare industry as a mechanism to produce cost savings.

Soft Skills Make a Real Impact in Supply Chain Management
Bennett Glace, Future of Sourcing, 8/30/2019
In this digital era, almost every industry and department is aware of the extensive capabilities of new-age tech. But are they paying attention to those equally important soft skills that could make or break a strategy? Bennett Glace delves into the true value of soft skills in procurement and lists some key traits that your team should be keeping sharp.

4 Third-Party Management Reports You Should Provide to Senior Management
Josh Angert, Vendor Centric, 8/20/2019
By now, you should know that managing your third party relationships is a crucial part of optimizing your supply chain. The amount of vendor information you're collecting and updating can be extensive, but it's certainly worth the time and effort. An effective third-party management program (TPMP) should always be going the extra mile whether that means dedicating a group of people to the cause or taking the time to communicate your findings to all relevant groups. Josh Angert provides four key reports your TPMP team could produce to present to your senior staff. 

A niche product as recently as 2018, spiked seltzer had one hell of a summer. Thanks to savvy social marketing and a slew of low-calorie, (relatively) high-alcohol offerings, brands like Bon & Viv and Truly have lately become a fixture at America's barbecues and beach houses. It's another brand, however, that's made the most notable impact in this increasingly-crowded market. White Claw, a product of Mark Anthony Brands, stands out as the Summer of Seltzer's clear winner. This July saw White Claw realize a 283% sales increase as compared to the same period last year.

Why Seltzer? 

America's taste in alcohol is evolving. While craft beer remains ubiquitous, young consumers are increasingly calorie-conscious. Since 2015, beer consumption has declined by nearly three percent. Bud Light, by far the nation's most popular brand, experienced a 17% dip between 2012 and 2017. Bloomberg suggests it's not just palates changing, but lifestyles. It's possible that Millennial and Gen-Z shoppers are finding it difficult to stay healthy, active, and successful while also contending with empty carbs and hangovers. With just 100 calories and 2 carbs per can, White Claw provides a perfect solution for those looking to imbibe more responsibly.

Writing for The Atlantic, Amanda Mull recently examined White Claw's popularity. She suggests the  drink has found fans and inspired memes because of everything it isn't. Decidedly low-maintenance and inexpensive, spiked seltzer doesn't require its drinkers to style themselves as influencers or feign any sort of insider knowledge. In addition to providing cheap inebriation, White Claw offers a refutation of the "Instagram-determined good taste" that has fueled FOMO and frustration throughout the last decade.  Mull concludes with a hopeful note. "As long as you can avoid committing any crimes," she writes, "maybe your White Claw Summer never has to end."

Mull may have spoken too soon. There aren't laws when you're drinking Claws, but Claws are not immune to the laws of supply and demand. Last week, White Claw confirmed that thirst for its products has led to shortages across the country. The news inspired seltzer enthusiasts to voice despair across Twitter and encouraged the media to engage with beverage distributors. Speaking to Business Insider, one Texas-based shop owner voiced his concerns. "We're putting in orders," he remarked, "but [our distributors] have to write half of them off." While frustrated, he is hardly surprised. After all, White Claw is "reaching a market of just about everyone." Even before the current shortage,  variety packs were known to sell out quickly.

Business Insider also reports that even shoppers who've managed to find cases of White Claw aren't always satisfied. Over the last several weeks, numerous customers have taken to Twitter with complaints that they've received empty cans. The organization has not addressed this issue with an official statement.

Is Summer Really Over?

White Claw, for its part, is choosing to focus on the positive during these trying times. In addition to ensuring customers that his company is "working around the clock to increase supply," SVP of Marketing Sanjiv Gajiwala took an opportunity to underline White Claw's still-surging popularity. "Despite reported shortages,'" he remarked, "we are excited to report that market share has continued to rise from 55% to 61% in just the past eight weeks."

The most crucial ingredient to a well-managed supply chain isn't a great piece of technology or even a network of dependable suppliers, but a well-staffed supply chain management (SCM) team. An SCM team should consist of a group of individuals with both the technical and soft skills to perform thrive in today's dynamic global economy.

Luckily, more and more colleges are offering academic programs for SCM and sending a new generation of talent out into the professional world. Looking to hire new resources or further your own supply chain education? You might want to take a closer look at these universities. According to U.S. News & World Report, they boast the nation's best SCM programs.

1. Michigan State University
School: Eli Broad Graduate School of Management
Location: East Lansing, Michigan
Overall Best Business Schools Rank: #38
Average Salary Among Graduates: $104,324
# Of 2018 MBA Grads with Jobs in Operations/Logistics: 27
Offerings: B.A. in Supply Chain Management, M.S. in Supply Chain Management, Ph.D. in Logistics, Ph.D. in Operations and Sourcing Management, Online Certificate Programs, Executive Development Program.

Michigan State has been labeled the number one SCM program in the world by multiple publications such as the U.S. News & World Report. It's no surprise that two of the program's required courses are Procurement and Supply Chain Management and Procurement Contracting. MSU even has a strategic sourcing course for its MBA program. MSU also created a Supply Chain Management Association (SCMA) that allows students to communicate openly about the SCM space and network with leading industry professionals. The SCMA is meant to expand the student’s experience beyond their coursework develop a new generation of professionals.

2. Massachusetts Institute of Technology
School: Sloan School of Management
Location: Cambridge, Massachusetts
Overall Best Business Schools Rank: #3
Average Salary Among Graduates: $133,919
# Of 2018 MBA Grads with jobs in Operations/Logistics: 37
Offerings: M.S. in Applied Science in Supply Chain Management, M.S. in Engineering in Supply Chain Management, Ph.D. in Supply Chain Management, MITx MicroMasters certificate.

MIT is listed as the second most excellent SCM program. MIT welcomes undergraduates to apply to a variety of different masters programs in their SCM department. MIT does not, howeverm offer a B.A. Students can choose from a traditional master program, a blended one, a MicroMasters certificate, or the Doctoral program. MIT also founded the MIT Global Supply Chain and Logistics Excellence (SCALE) Network, a global coalition of education centers aiming to research supply chain and logistics excellence and promote innovation.

3. Pennsylvania State University (Tie)
School: Smeal College of Business
Location: University Park, Pennsylvania
Overall Best Business Schools Rank: #33
Average Salary Among Graduates: $106,385
# Of 2018 MBA Grads with jobs in Operations/Logistics: 13
Offerings: B.S. in Supply Chain Management, M.S. in Supply Chain Management, PgC in Supply Chain, Ph.D. in Supply Chain Management.

Next in line is Pennsylvania State University. The SCM program at PSU has an impressive size and scope and produces bunches of job-ready graduates a year. PSU carries a strategic procurement course in their Master’s program. PSU’s supply chain network offers industry expertise and valuable networking opportunities as they have the largest Alumni Association in the nation. PSU has even sent a graduate or two to the team here at Source One.

3. Arizona State University (Tie)
School: W.P Carey School of Business
Location: Tempe, Arizona
Average Salary Among Graduates: $103,995
Overall Best Business Schools Rank: #33
# Of 2018 MBA Grads with jobs in Operations/Logistics: 20
Offerings: B.S. in Supply Chain Management, B.A. in Global Logistics Management, M.S. in Business Analytics, M.S. in Global Logistics, W.P. Carey MBA, Ph.D. in Supply Chain Management.

At number four we have Arizona State University which offers a range of degrees in SCM. Some areas of excellence that ASU covers are Health-sector SCM, logistics management, supply chain sustainability, and more. Procurement classes are required early on in the undergraduate program and provide an ongoing theme through the Ph.D. program. The ASU Supply Chain Management Association is a student-run member organization that helps student network and apply their growing SCM skills.

5. University of Tennessee
School: Haslam College of Business
Location: Knoxville, Tennessee
Average Salary Among Graduates: $80,700
Overall Best Business Schools Rank: #54
# Of 2018 MBA Grads with jobs in Operations/Logistics: 20
Offerings: B.S. in Supply Chain Management, M.S. in Supply Chain Management, Haslam MBA, Executive MBA - Global Supply Chain, Ph.D. in Supply Chain Management.

Last but not least, we have the University of Tennessee. UTK also offers a breadth of different programs and even pushes for furthering education on an executive level by offering single courses for professionals to attend. As a bonus, UTK launched the NeXxus initiative in 2015 in an effort to connect women in the supply chain space. NeXxus is a student-led organization that aims to mentor and empower women throughout Procurement and SCM. UTK also hosts a council for Supply Chain Management professionals.

*These rankings were obtained from the U.S. News and World Report which leveraged data from the 2020 U.S. News Best Business Schools Ranking on June 5, 2019.*
A well-defined statement of work is essential to the success of any Procurement project. Providing specific, measurable, and detailed information, it serves as a roadmap for stakeholders and helps to ensure success. 

The more precise and detailed the better. Designed effectively, a statement of work helps avoid miscommunication, scope creep, and other side effects of ineffective planning. Check out our guide for developing a statement of work with everything you need to build better supplier partnerships.

The U.S. Postal Service makes a point of noting that neither snow, sleet, rain, hail or wind can stop letter and parcel carriers from making their deliveries to homes and businesses. But wild weather can cause delays, which is exactly what's happened for the entire shipping industry as Hurricane Dorian ambles its way up the East Coast.

On Sept. 5, the USPS announced it was closing offices earlier than normal in 100 zip codes throughout the state of South Carolina due to the early effects of Dorian, disrupting previously scheduled deliveries for potentially millions of residents, according to Supply Chain Dive. The same was true for neighboring states like North Carolina and Georgia, affecting 17 and 21 zip codes, respectively.
"3 out of 4 homes in Grand Bahama Island are underwater."
Largest hurricane to every strike the Bahamas
The first major hurricane of the 2019 Atlantic season and the fourth named storm, Dorian has proven to be the storm that just won't quit. It initially formed in late August as a fairly weak tropical system, but due to its painfully slow speed - as little as 1 mile per hour at times, according to the National Weather Service - Dorian gathered substantial strength from warm ocean temperatures. It eventually reached Category-5 intensity - with wind speeds reaching in excess of 185 mph - and carved a path of destruction through the Bahamas. By latest estimates, at least 13,000 homes were destroyed and potentially thousands more experiencing devastating flooding. Area authorities told the Washington Post that out of every four homes on Grand Bahama Island, three were underwater.

With devastating images and worst-case scenario expectations in mind, the USPS made the move. Florida, initially expected to experience much of Dorian's wrath, was largely spared as Dorian's track moved more easterly than forecasters anticipated. Deliveries resumed for at least three zip codes in the Sunshine State as a result.

Other delivery companies impacted
The Postal Service wasn't the only delivery provider forced to adjust due to forces beyond their control. UPS took similar measures by alerting customers that if they were expecting to receive a package on Sept. 5, it would be delayed until further notice in evacuation zones for parts of several states along the Atlantic, specifically the Carolinas, Georgia and Florida.

"Our primary concern is the safety of our employees and therefore no pickups or delivery service will be provided in any area while under and evacuation order," UPS said in a press release. "UPS is constantly monitoring the storm system and has contingency plans under review to mitigate the effects of severe weather on our services."

No further updates were posted as of 8 a.m. on Sept. 6. Meanwhile, FedEx undertook similar precautionary measures by informing customers supply chains could be impeded temporarily with the effects of Dorian ongoing. The strength of the system has diminished to a Category 1 on the Saffir-Simpson Wind Energy Scale, according to the latest estimates from the National Oceanic and Atmospheric Administration.

"FedEx will be prepared to provide service to the best of our ability in areas affected by the storm and as local conditions allow," the company announced in a services alert.

What's next?
As for where the storm is headed moving forward, the eye is expected to shift to the southeast, with coastal parts of the New England region perhaps feeling a much weaker version of what the Bahamas received. It's scheduled to arrive in early morning hours of Sept. 7, CNN reported. Currently, it's around 30 miles off the coast of Cape Hatteras in North Carolina, according to NWS.

Tens of thousands of area businesses and residents in the Tarheel State remain in the dark after strong winds caused downed utility poles and trees in coastal communities in particular. At least 200,000 customers were without power at 8 a.m. Sept. 6, The New York Times reported. Affected businesses will likely be relying on their disaster preparedness to mitigate the fallout from Dorian in terms of productivity.

For all intents and purposes, the busy summer season is over for the nation's household-name fast food franchises. But one of America's most popular grab-and-go eateries is looking to make a splash this fall by revitalizing its menu with new options to select from, a move that is poised to rejigger the company's production supply chain.

As detailed on the company's website, Taco Bell plans to unveil a re-stylized listing of menu items starting Sept. 12 that will require fast food frequenters who have memorized what numbers go with which options to think again. For example, what was a No. 3 - the Crunchy Tacos Supreme - is now a No. 1,  and No. 3 will be the Burrito Supreme, the announcement stated.  At No. 2 is the Soft Tacos Supreme meal option, followed by the Steak Quesarito and Nachos BellGrande at Nos. 4 and 5, respectively.
"The revamped menu has 13 combo meals, three of which are breakfast combos."
All told, the revamped menu now has 13 combo meals, three of which are breakfast combos at Nos. 11 through 13 (Breakfast Crunchwrap, Grande Scrambler and Breakfast Quesadilla).

In addition to the different options, the menu itself is getting a bit of a makeover as well with new colors, graphics and a more streamlined listing of meal choices.

"[W]e gave our menu a brand new look-and-feel to help make ordering easier," Taco Bell noted in the blog section of its website. "It's kind of like our version of decluttering a closet."

Some items going away
What may also come as a surprise on Sept. 12 - perhaps an unwelcome one at that - is some of the chain's staples are going away, at least for now. These include, the Chipotle Chicken Loaded Griller, the Beef Mini Quesadilla, Double Decker Taco, Power Menu Burrito and Cool Ranch & Fiery Doritos Los Tacos. The Double Decker Taco in particular been a menu selection tracing back to 2011, Restaurant Dive reported.

The Mexican food franchise recognizes that a number of its regular visitors may not appreciation the elimination of some of these selections, but encourages doubters to "get outside their comfort zone" and try some of the latest creations, which may become a new favorite.  

How other chains have changed
Taco Bell isn't the first fast food chain to have revamped its menu lineup in recent months - and almost certainly won't be the last. As reported by the Nation's Restaurant News, Jack in the Box in June announced that it would "reduce redundant ingredients" from 180 restaurant locations in order to make its product supply chain more seamless and improve upon customer wait times.
Lenny Comma, Jack in the Box CEO, noted that the variety of food choices his company offered created unintended consequences for workers and associates charged with preparing customers' meals.

"We've been our own worst enemy when it comes to speed of service as the breadth of our ever-changing menu has added complexity in prep times in our kitchen."
McDonald's as well as El Pollo Loco have taken similar measures, all in a bid to increase efficiencies and decrease redundancies. In short, they're all looking to bring the "fast" back to fast food.

The Year of the Pig has so far proven disastrous for China's pork supply chain. An unprecedented outbreak of African Swine Fever has decimated the nation's hogs. This contagious, aggressive disease, Bloomberg reports, has killed as many as 200 million. Shortages have forced the world's most populous nation to ramp up imports (in spite of an ongoing trade war) and make do with a dearth of cold storage space.

Countries including Spain and Sardinia have contended with similar outbreaks in the past. The former took more than three decades to eradicate it; the latter has yet to do so. Experts expect China will need years of careful, strategic action to rehabilitate its own ailing industry.

Supply Chain Ripple Effects

China's immense appetite for pork has made the country an essential source of heparin. A powerful anti-coagulant, the drug plays an important role in treating and preventing heart attacks. It's also the only anti-coagulant approved for use during open heart surgery and kidney dialysis procedures. Heparin's active pharmaceutical ingredient (API) comes from pig intestines and the Chinese pork industry provides around 80% of the world's supply.

Last month, six members of the U.S. Congress Committee on Energy and Commerce submitted an open letter to the Food & Drug Administration (FDA) in order to "raise concerns" about the heparin supply chain and "learn of any contingency plans in the event of a serious shortage."

Other animals can provide heparin. The letter's authors note, however, that fears around Mad Cow Disease have made pigs the sole source for more than twenty years. With more than half of the world's porcine population, China provides an instrumental link to heparin's life-saving supply chain. It's an inherently unbalanced and risky situation.

Though they express concern, the authors acknowledge that "there is no apparent evidence yet that the pig shortage in China is impacting the heparin supply in the United States." One month later, the FDA reports that the situation is still under control. "Although certain presentations of heparin have been in shortage," remarks an agency spokesperson, "the overall supply continues to meet demand."

The FDA currently lists just two organizations as experiencing shortages. Baxter International and Hospira, they report, have struggled with their respective supplies of heparin since November 2017. This week, a subsidiary of Germany-based Fresenius SE revealed its own misgivings about a potential shortage. The organization has begun to limit allocations of the drug in anticipation of further interruptions. Though the company sources its heparin from several regions, a company spokesperson expresses particular concern over "the situation in China." They have also obtained FDA approval to expand manufacturing in the United States

An Unfortunate Reminder and a Potential Path Forward

This is not the first time complications throughout the Chinese pork industry have threatened the global heparin supply. Between 2006 and 2007, an outbreak of Blue Ear Virus wreaked similar havoc throughout China's hog farms. The outbreak was not publicized for months and related statistics are still disputed. Even more troubling than the outbreak (and potential cover-up) was its aftermath. As organizations in both hemispheres scrambled, imports of tainted crude heparin found their way into America's drug supply. More than 200 patients died.

A 2008 investigation into one of Baxter's Chinese suppliers confirmed that the organization had neglected to establish processes for removing impurities. They had also sourced crude heparin from an "unacceptable" supplier. These discoveries prompted Congress to extend the FDA's purview and conduct a series of hearings. They are now concerned that the ongoing Swine Fever epidemic could produce similar ripple effects. In addition to shortages, last week's congressional letter cites "economically-minded adulteration" as cause for concern.

Last year, the FDA encouraged America's healthcare providers to begin deriving heparin from cow lungs once again. The organization, a spokesperson remarks, "has been in contract with several companies, both domestic and foreign, regarding reintroduction of bovine heparin to the U.S. market." While the substance of these conversations remains confidential, they should inspire hope that alternative sources could soon heal the heparin market.

This guest blog comes to us from David Madden of Exchanger Hub.

Got something to ship? Whether you’re a major ecommerce store shipping packages to consumers all over the world or you’re trying to send an urgent package to a colleague across the country, you’ll have to choose between air freight and ground shipping. From a business perspective, choosing one shipping method over another can have serious implications for your bottom line and your company’s reputation. Both methods come with their fair share of pros and cons, including cost considerations, travel time and safety concerns. If you’re trying to decide between these two shipping methods, learn more now about the benefits and drawbacks of each so you can make the right decision for your business.

Air Freight – Pros 

Sending a package using air freight shipping will be much faster than using ground shipping. Packages can fly across the country in just a matter of hours, while it can take a freight truck several days or a week to get from one side of the country to the other.

You also don’t have to worry about dealing with as many unexpected delays with air freight shipping compared to ground shipping. Just like boarding a passenger plane at your local airport, planes run on a tight schedule with clearly-marked departure and arrival times. You can expect your package to arrive on time with minimal interruptions. This makes it a great option for urgent orders and perishable items like produce and meat.

The chances of your shipping crate being stolen or tampered with are also much lower when you choose air freight shipping. Security is an integral part of the air transportation process as every checkpoint is tightly managed by airport personnel.

Businesses and consumers alike have embraced the benefits of air freight shipping. According to the International Air Transportation Association, demand for global air freight shipping grew by 9 percent in 2017 and, in North America, demand increased by 5.4 percent.

Air Freight – Cons 

Air freight shipping usually costs quite a bit more than ground shipping, considering this is usually the fastest delivery option. Airlines spend a fortune on fuel, airport personnel and tight security measures, so your business can expect to pay a higher price than you would normally pay for ground shipping.

There’s also a chance that the occasional tropical storm or blizzard will push back your delivery date. But these kinds of delays tend to be less frequent and more predictable than the kinds of delays that come with ground shipping. Driving across the country means having to deal with construction, road closures and frequent stops. A flight usually only lasts several hours, so the window for weather delays is much shorter.

Your package will also face some size and weight limitations. A plane can’t carry nearly as much weight as a truck. When you look at the total weight of shipments per transportation mode, you see that ground shipping easily surpasses air freight shipping year after year. In 2015, the total weight of the shipments that traveled by ground was over 10,000 million tons, while air freight shipping saw a total shipping weight of just 10 million tons. 

The airline may also prohibit certain chemicals and hazardous materials, or you may need to pay special handling fees for these substances. You can take a look at the Dangerous Goods Regulations for more information on whether you can ship a certain item using an air freighter and how to properly ship these kinds of items. Shipping one of these substances may require you to buy a shipping container that’s specially designed to keep these substances safe and intact. Traditional gaylord boxes or plastic shipping crates may not offer enough protection for these materials.

Ground Shipping - Pros

There are fewer package limitations when you choose ground shipping as opposed to air freight shipping, which makes it a good choice if you’re looking to ship heavy, large or hazardous materials. 

You’ll also save a lot of money if you choose ground shipping. The rates tend to be a fraction of those associated with air freight shipping services. All you’re paying for is gasoline for the vehicle, maintenance fees and the driver’s time, instead of costly airline fuel, dozens of airline employees and increased security measures.

Ground Shipping - Cons

Of course, ground shipping will take longer than air freight shipping. But it’s a good option, if not the only option, if your destination is close by. It could take anywhere from several days or an extra week for your package to arrive if you’re shipping long distance. The driver will need to make several stops along the way, which can hold up the transportation process considerably. 

Traffic, road closures and the weather can also complicate matters. Flight delays tend to be easier to predict considering it’s only a few hours long, so you’ll quickly know how long these delays might affect your delivery time. But when the package is traveling on the road for days or weeks at a time, all kinds of unexpected interruptions and weather delays can easily impact travel time, making the final arrival date difficult to predict in some situations.

There’s also a greater risk of having your package tampered with or stolen along the way. Ground shipping comes with fewer security checkpoints and less package surveillance than air freight shipping. Packages may sit on the truck or van unsupervised while the driver completes a delivery. 

Choosing the Right Shipping Method

Choosing between these two methods all depends on your shipping needs. If speed is of the utmost importance, you're better off with air freight shipping. Ground shipping will save you money - which may be important for a business that ships hundreds or thousands of packages a month. Maybe you need to ship a sensitive item. In these instances, you'll benefit from the additional security provided by air freight shipping. It's essential to consider every variable and seriously reflect on your organization's priorities. The right level of effort and strategic planning will ensure you select the right method and enjoy successful deliveries every time.

Author Bio: David Madden is an efficiency expert, as well as being the Founder and President of Container Exchanger. His passion and business is to save companies money through the use of used reusable and repurposed industrial packaging such as plastic and metal bulk containers, gaylord boxes, bulk bags, pallets, IBC totes, and industrial racks. He holds an MBA as well as a certificate from Daimler Chrysler Quality Institute for completion of six-sigma black belt training.

Since opening up our Chicago office in 2014, Source One has hosted an annual happy hour for our friends throughout the Windy City. On October 24th, we'll host our fifth - and we'd love for you to attend.

Source One's Procurement Professionals Happy Hour provides a welcome opportunity to reconnect, discuss industry trends, exchange best practices, and reflect on the last year in Procurement and Supply Chain Management. This year, topics of discussion will likely include Corcentric's recent acquisition of Determine as well as subjects like the ongoing global trade war and changing shape of talent management.

"Our annual happy hour has become a cherished tradition," says Director Diego De la Garza. "It gives our team a change to connect with colleagues outside of the typical office environment. We're especially excited to introduce new members of the Source One team to the Chicago-area Procurement community and discuss our expanded service offering."

Interested in attending? Contact Carole Boyle ( to learn more. 

In an increasingly digitized world, the print and mail space is all about finding efficiency. As the demand for certain analog marketing methods, such as printing and direct mail, decrease in lieu of digital marketing, service providers in this space have developed strategies such as undergoing digital transformation themselves or curtailing their ineffective services. Even so, many service providers continue the vital practice of postal optimization to ensure effective postal pricing for themselves and their customers.

Procurement, in pursuing the best opportunities for their company, should consider postage price in evaluating the cost model of their print and mail vendors. Because of the cost-savings potential of the postal optimization program for each prospective vendor, procurement managers must evaluate and maximize the postal discount opportunity. By leveraging a print and mail service provider's ability to provide postal and routing discounts through their relationship with the United States Postal Service (USPS), companies can produce savings across all their different letter-type specifications.

One essential method in postal optimization is through data hygiene. By eliminating incorrect addresses or duplicate information, postage cost can decrease with waste reduction and sustainability. These errors include incorrect demographic information, human error, and mistaken addressee identities. Fortunately, service providers could correlate the mailing addresses to the National Change of Address (NCOA). The USPS maintains this database that is updated whenever an individual or business submits a change of address within the past four years. Therefore, cross-referencing against this database could be a potential cost-savings opportunity.

Another method for significant savings is if the post office does not have to do the work to sort the mail pieces. Print and mail service providers have the capability of presorting, or grouping mail by zip code, to achieve this result. With presorting, all mail pieces include an Intelligent Mail barcode (IMB), a 65-bar USPS code used to sort and track. Service providers that can provide full-service IMB services could denote postal optimization cost savings through their electronic postage statements and efficiency in sorting and tracking mail pieces. Moreover, the tracking capability can offer visibility into the labeling, sorting, and organization of the requested mail pieces throughout the process, ensuring quality and proper postal rates. Print and mail service providers also adopt a Coding Accuracy Support System (CASS) solution to validate and certify each mailing address. This solution can populate the mailing addresses with additional information such as the last four digits of a zip code that denotes the delivery route of that mail piece or even a two-digit code that specifies the mailbox for that address. However, presorting discounts must also meet the stringent USPS standards for realized discounts such as letters, postcards, and flats with proper label and documentation.

Additionally, the USPS rewards postage discounts proportional to the volume of presorted mail pieces. As you presort more individual mail piece, the discount provides cost savings while ensuring the same level of service in delivery time. The USPS set different volume thresholds to hit depending on the type of mailpiece (e.g. first-class mail, marketing mail, etc.). The downside is that it requires additional expenses to process and presort the mail pieces; print and mail service providers have sustainable and comprehensive presorting abilities that could warrant external presorting services, providing a reasonable return on investment.

Print and mail service providers commonly use a mechanical sorting process called commingling that reduces costs by arranging mail by their proper postal tier. This mode of postal optimization is facilitated by combining a company's mail pieces with those of other companies to receive postal discounts. Through the combined volume of mail sorted by zip code, these mail pieces receive a reduced cost from the USPS. This is a popular means to reduce the effect of the annual postal rate increase.

Service providers could also use co-palletization. This is another sorting method, but co-palletization can specify mail to their respective Sectional Central Facility (SCF) rather than simply their corresponding Network Distribution Center (NDC). This logic reduces the sorting process for the USPS, resulting in discounted postal rates. This combination of mail pieces is similar to commingling, but unlike commingling, this involves trays of mail on pallets rather than simply mail pieces on trays. In comparison, print and mail vendors are likely to provide a faster delivery time than through commingling at a reduced postal discount rate considering the lower level of qualification on each mail piece.

Lastly, another method used is drop-shipping. This is the actual transportation of mail on private carriers to deliver the mail pieces to a USPS facility closer to its final destination. Drop-shipping is very dependent on the geographical location of your mailing needs, the location of your addressees, and the availability of both USPS and the private carriers. Depending on the fulfillment capabilities of the print and mail service provider, this could be a sustainable service that can lower the overall cost of the mail piece.