Digital Transformation: A Safer Supply Chain

As the logistics industry moves the global supply chain onto digital platforms, experts are warning that vulnerabilities to cyberattacks must be addressed.


https://businessfacilities.com/2018/06/digital-transformation-a-safer-supply-chain/
As the logistics industry moves the global supply chain onto digital platforms, experts are warning that vulnerabilities to cyberattacks must be addressed.
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Digital Transformation: A Safer Supply Chain

As the logistics industry moves the global supply chain onto digital platforms, experts are warning that vulnerabilities to cyberattacks must be addressed.

Digital Transformation: A Safer Supply Chain

By the BF Staff
From the May/June 2018 Issue

How safe is your supply chain? According to logistics industry insurance provider TT Club, not enough attention is being paid to the frailty of global transportation systems when faced with cyberattacks. Many logistics companies, the group said, are not only unaware of their security vulnerabilities from new technology, they also are largely ignorant of the frequency with which these attacks have occurred.

At the Trans-Pacific Asia Conference, held late last fall in Shenzhen, China, TT Club’s Alexis Cahalan warned that the logistics and freight forwarding community’s lack of “open communication and reporting of damaging past cyber experiences” can lead to greater risk.

This isn’t the first time the logistics industry has been accused of under-reporting theft and other security lapses, but now, Cahalan and others are warning that new technology could actually increase vulnerability. “Risks are increasing rapidly, not just in terms of greater hacking and malware activity,” Cahalan warned. “The desire for supply chain visibility and efficiencies is driving technologies, such as IoT (internet of things) and access through smart phones and the like. There is a danger that rapid adoption of such technology means many companies have yet to consider thoroughly the cyber security implications of BYOD (bring your own device) procedures.”

Recent revelations of hacks at the National Security Administration (NSA) underscore how sophisticated cyber-criminals have become, while also pointing to the importance of having rigorous, and well-enforced protocols. The NSA has said that one major breach occurred when a contractor took a computer home to work on a project, allowing hackers to exploit a weakness in the system. For logistics companies with far-less sophisticated security protocols, compliance is all the more important.

TT Club stressed that defensive action in such a challenging security environment “can’t be whittled down to just one area of operation.” The insurer said that human behavior was a supply chain’s greatest strength, but warned that it also was a weakness that could be targeted.

“Employee awareness of the potential dangers of day-to-day activities will help with cyber defenses. Trust in e-mail communication, auto-connect wi-fi settings and password protocols, peripheral equipment and flash drives, [and] computers in general, should all be monitored and reviewed,” Cahalan concluded. “Staff and contractors should be brought to understand that the critical balance between ease of operation and security may bring inconvenience. A corporate culture that articulates, enforces and educates cyber defense will achieve much in terms of mitigating risk.”

BAY COUNTY OCCUPIES THE CENTER

When it comes to location, Bay County, Michigan has it all! This community of just over 107,000 residents, touted as one of America’s Top 10 Most Affordable Metros by Realtor.com, is nestled in the heart of the Great Lakes State, located near the base of the beautiful Saginaw Bay on Lake Huron providing access to Lake Huron, the Saginaw Bay, the Saginaw River and the second largest commercial port in Michigan with access to the St. Lawrence Seaway and the North American River System.

logistics industry
Dow Chemical is opening a $100-million Innovation Center at the
Heritage Dow Corning Campus. (Photo: Bay Future)

Bay County has access to multiple state and U.S. highways, as well as the second longest North-South interstate in the country (Interstate 75). Two airports are located within the region along with miles of railway. Not to mention, Bay County (and the State of Michigan) is geographically located outside of frequently occurring natural disaster areas and is within a single day’s truck drive of reaching over two-thirds of the population of the United States.

Businesses are making use of Bay County’s strategic location and the ability to access multimodal ports.

  • The Dow Chemical Company reaffirmed their commitment to Bay County with their announcement of a $100 million Innovation Center at the Heritage Dow Corning Campus.
  • General Motors has been in Bay County over 100 years and recently announced an investment of $20 million at the Powertrain Facility. This announcement came less than a year after the company announced a $118 million investment into the plant.
  • Atlas Industrial Development invested in a 40-acre parcel of predeveloped property and is constructing a 48,000-square-foot pre-engineering steel industrial facility on speculation investing $1.2 million. The building is being marketed to warehousing and logistics companies and the remainder of the acreage will be developed as a new industrial park.
  • Port Fisher Terminals is a multi-modal port, offering vessel, rail and truck transportation. Railroad switching and service to the port is supported by Lake States Railroad, and Interchanges with CSX, Canadian National (CN) and Norfolk Southern (NS). Boasting of 85+ acres and 1,000 feet of Steel Seawall—Dock Hardwall, this site is being marketed to companies looking for the convenience of multiple modes of transport with available space for additional warehousing or manufacture.
logistics industry
Port Fisher Terminal is an 85-acre multi-modal port in Bay County which
offers boat, rail and truck transportation. (Photo: Bay Future)

Bay County has experienced continuous growth in terms of jobs and capital investment. In 2017 alone, businesses created hundreds of jobs and invested over $268 million with support of the local economic development organization, Bay Future, Inc. The community has a diverse group of industry clusters, including advanced manufacturing and agribusiness, and is home to a wide array of companies, including Fortune 100s, and technology startups. This traditional blue-collar community celebrates its rich history as a lumber town and boasts some fantastic white-collar amenities.

These opportunities of business growth paired with excellent amenities and a small town feel make Bay County the essence of Pure Michigan and the ideal place to live, work and play. There are more than 3,200 acres of natural terrain, over 100 parks, 20+ miles of trails, seven public and private golf courses and recreational opportunities on the Saginaw River, Kawkawlin River and Saginaw Bay. Downtown Bay City has seen a spark and revival with developers continuing to invest in infrastructure and historical buildings. Take an evening cruise down the Saginaw River with Bay City Boat Lines or enjoy a myriad of festivals the community plays host to along the water. The area is home to Michigan’s largest antique center, Delta College Planetarium, and a tri-annual Tall Ships Celebration—a series of tall ship races and maritime festivals.

Here are Bay County’s Key Attributes:

  • Less than a 90 minute drive from Detroit/Windsor—the busiest international crossing in the world with more than $300 million in trade per day
  • Interstate 75, one of the longest interstates in the U.S., runs through Bay County connecting Canada in the North to the Southern tip of Florida
  • Proximity to major markets—Detroit, Chicago, Toronto, Cleveland
  • Recognized as one of the Top 10 Metro Areas with a population of less than 200,000
  • Recognized as a Top 10 Logistics Leader nationally among the likes of New Orleans, Louisville and Houston
  • Skilled labor with generations of manufacturing expertise, 12 higher educational institutions in the region with training closely aligned with labor demand
  • Consistently one of the most affordable communities to live in the U.S. (Forbes.com and Realtor.com)
  • Strategic position along the largest river in the state—Saginaw River—and Lake Huron

Interested in learning more? Visit BayFuture.com!

TENN-TOM: GROWTH KEEPS FLOWING ON THE WATERWAY

The Tennessee-Tombigbee Waterway (commonly referred to as the Tenn-Tom) is a 234-mile Waterway that connects 17 states to the Gulf of Mexico and the world. It provides access to more than 16,000 miles of navigable, inland waterways in the United States. It is a slack water route and the shortest distance from mid-America to the Port of Mobile in the heart of the Gulf of Mexico. It is a shortcut. For example, the boating distance from Knoxville, Tennessee to the Gulf of Mexico is reduced by more than 665 miles. The Tenn-Tom has available capacity and it is open for business.

The Tenn-Tom has certified industrial sites available and several local economic development organizations that will be happy to show them to you. These communities along the waterway are business friendly. Recent announcements have credited this attitude and willingness to work with the developers-along with the location on the Tenn-Tom-as the key factors that persuaded them to choose the site. It is home to some of the nation’s largest steel manufacturers including Steel Dynamics and U.S. Steel.

The steel industry is only one example of those taking advantage of the Tenn-Tom and its regional resources. Located in the “wood basket of the nation,” the Tenn-Tom provides access to over 34 million acres of commercial forests, and approximately two-thirds of all recoverable coal reserves are found in the region. These industries have and are realizing the benefits of waterborne transportation.

By using the waterway, manufacturers take advantage of the most energy-efficient, safest and environmentally friendly mode of transportation. They can ship more cargo with less energy and the corresponding fewer emissions. By using the waterways instead of the highways, it is much safer for you on the roads and to the environment from accidents and spills. By using less energy, these shippers on the waterways save money. These cost saving advantages are not only important to you as an investor but also your global customers and to everyone as consumers of these products.

The Tenn-Tom serves a full range of public ports and terminals throughout the region. Many of these terminals can provide a full range of intermodal services and warehousing. The Tenn-Tom has a standing Memorandum of Understanding with Panama and is uniquely positioned to serve an increasing trade market with the world’s foreign markets. Once the expanded Panama Canal is completed, more trade is expected in the Gulf and the Eastern Seaboard. This Port of Mobile has a world class 850,000 TEU container port already in operation and, this along with the Tenn-Tom’s designation as a Marine Corridor (M-65) by the United States Department of Transportation, makes the waterway “shovel ready” for Containers-on-Barge. Once established, containers on barge can go up the connecting Tennessee River to Paducah, Kentucky and markets beyond.

The Tenn-Tom also is home to prime waterfront industrial sites in the region. These sites are ideal locations for manufacturers that need, or at least have the option to use, multiple modes of transportation for their raw materials and finished products.

In addition, with unlimited recreational opportunities, the waterway has become a way of life. Boating, sport fishing, hunting and camping are some of the ways that people use the Tenn-Tom. The “Loopers” use it for their sojourns thru mid-America across to the Eastern Seaboard, around Florida and back to the Gulf. Bass and crappie tournaments have drawn worldwide attention. With the mandated Wildlife Mitigation established in Alabama and Mississippi, hunting along the Tenn-Tom is prime territory. With nine campgrounds/parks, with most equipped with all the necessary hook-ups, allows one to enjoy the outdoors while still having the conveniences that we have grown accustomed to.

With all this available as a draw to the region, it is not surprising that an eager and ample work force is available in an enviable business climate.

Billions of dollars have been invested in the Tenn-Tom corridor and much more is on the way. For more information, please contact the Tennessee-Tombigbee Waterway Development Authority at 888-Tenn-Tom or visit www.tenntom.org.

JOHNSON COUNTY FILLS THE ORDER FOR DISTRIBUTION CENTERS

Indiana may be known as the Crossroads of America, but the aptly named Hoosier state connects far more than travelers criss-crossing through the state’s network of interstate highways.

Indiana’s easy access and unmatched road, rail and waterway connectivity make the state a logistics hub and prime location for distribution centers, which need to get products to every corner of the nation quickly and efficiently.

In fact, Indiana ranks No.1 in the nation for pass-through highways, No. 1 in the shortest distance to median center of U.S. population and is home to the second largest FedEx hub worldwide.

Johnson County, located on Indianapolis’ near south side, is capitalizing on its prime location and welcoming the logistics industry and scores of distribution centers to the area. With over one million people living within a 30-minute drive, distribution and fulfillment centers in the county have doubled over the past decade. The logistics sector now represents more than five percent of the local workforce and is seeing steady growth.

A recent addition in Greenwood is a 66,000-square-foot distribution center for MaxLite, a leading global manufacturer and marketer of energy efficient lighting solutions. The addition of the Indiana location to its distribution networks now enables MaxLite to offer two-day shipping of its LED products to customers nationwide. The company touts the location and immediate access to primary freight carriers as key factors in choosing a home for its new center.

MaxLite followed on the heels of other distribution centers that have chosen Johnson County in the past couple of years, including Peltz Shoes and beauty products giant, Ulta Inc., which is now the city of Greenwood’s second largest employer.

Contributing to the area’s outstanding infrastructure are Johnson County REMC, a member-owned electric distribution cooperative, and Hoosier Energy, a generation and transmission cooperative providing wholesale power and services to the distribution cooperative.

Johnson County REMC CEO Chet Aubin works closely with community businesses to ensure that reliable power is always included as one of the advantages for locating in the area. “As an REMC we constantly look forward to what the county will need for future development and are prepared to be ahead of the growth. As the number of distribution centers has increased we’ve doubled a substation in the past year and are looking at adding another substation in the near future in Greenwood.”

And Johnson County REMC isn’t just focused on power. Aubin added that the cooperative began installing fiber optics alongside electric lines about seven years ago, anticipating an ever-increasing need for high-speed Internet.

“Our planning for increased power along with installing the fiber optic lines has been extremely important for our commercial customers,” said Aubin. “This has been essential especially for the new distribution centers, like MaxLite and Ulta, we see moving into the area. Their entire operation relies on real time information to fill customer orders and get them out the door quickly.”

The REMC meets regularly with Hoosier Energy for load forecasting to plan for the growing community that currently has 2 million square feet of new industrial, warehousing and distribution space available for relocating and expanding businesses. There are also 12 new residential subdivisions planned, and the county recently added 350 acres zoned industrial, which can accommodate more than 3 million square feet of new development.

Interim Executive Director at Johnson County Development Corporation, Dana Monson, also attributes the growth in distribution and fulfillment centers to the ideal location, and credits additional community attributes for the economic upturn the county is experiencing.

“We have the buildings and land, a very strong labor pool and less congestion than most areas located this close to a major metropolitan area,” Monson said. “Our communities, including Greenwood and Franklin, have made investments in their own infrastructure, schools and downtowns and are committed to providing the quality of place residents are looking for. This is important to attracting new businesses and people to our county, but also retaining our current population.”

Aspire Johnson County, a program of Johnson County Economic Development, brings together residents, businesses and elected officials to work on creating the business-friendly environment.

“We work together to have a common voice and create a community partnership,” said Monson. “We have seen the great plans of this group become a reality. A good example is a private contractor and the city of Franklin that came together to construct a shell building—this is forward thinking that makes our economy grow.”

The cities and towns in Johnson County have all the pieces in place, including the infrastructure with plans for roads and excess capacity for sewer and water to drive development, Aubin said. “Johnson County has positioned itself as a first choice for distribution centers and we look forward to powering these facilities as they bring jobs and new businesses to our area.”

SWLA: COASTAL ECONOMIC ENGINE

Going back a few years, America’s Gulf Coast was predicted to be an economic hot spot. Since 2016, population and job growth have exceeded the national average, which is expected to continue through 2021. But one area that is dominating regional growth is Southwest Louisiana, where $108 billion in industrial expansion and construction projects are revving the Coast’s economic engine.

Southwest Louisiana is home to advanced manufacturing, international trade, energy production and tourism, which are the foundations of the area’s growth. The five parishes (counties) of the region, Allen, Beauregard, Calcasieu, Cameron and Jeff Davis parishes, each contribute unique resources that help make the industrial boom possible.

“We are a tightly woven network of public-private partnerships working together to grow our region. Southwest Louisiana is made up of people who are passionate about where they live and want to share the joys associated with being a Louisianan,” said George Swift, president and CEO of the Southwest Louisiana Economic Development Alliance.

As of May 1, 2018, $44 billion in construction projects were either underway or completed. Another $65 billion is pending in announced projects. Almost 20,000 construction jobs are in play in Southwest Louisiana, resulting in 18,000 permanent jobs when all construction is complete.

Locals like reeling off names like Sasol, Phillips 66, Westlake Group and Cheniere LNG, because those names mean jobs for family and friends along with spinoff entrepreneurial opportunities.

At the center of this economic activity is the Lake Charles metropolitan area. The city boasts the Port of Lake Charles, located 34 miles north of the Gulf of Mexico on the Calcasieu River Ship Channel that measures 40 feet deep and 400 feet wide. Interstate 10 and Interstate 210 surround the port and rail service is provided by Union Pacific, BNSF and Kansas City Southern.

Another asset of the metro-industrial complex is hundreds of miles of pipelines used to move chemicals into and out of the area. Another contributor to area’s progress is its economic diversity, including the aviation, timber, seafood, agricultural, and tourism industries.

LSU economist Dr. Loren Scott said in October 2017, “Like Secretariat, Lake Charles is far out in front of all the other MSAs in the state and is one of—if not the—fastest-growing MSAs in the nation.”

With a population of approximately 300,000 people, the Lake Charles MSA has been the fastest-growing in Louisiana for four-consecutive years, expanding at 5.1 percent a year and adding some 20,500 jobs. “In 40 years of monitoring the Louisiana economy, we have never seen back-to-back job performances like that in any MSA in the state,” Scott said.

Nurturing relationships is important to governmental and economic development representatives because continued diversification of the economy is a primary goal for those overseeing its growth.

South Korea-based Lotte Chemical USA recently chose to relocate its company headquarters to Lake Charles. Lotte is spending $1.1 billion on a monoethylene glycol (MEG) production facility and new office.

Standing next to each other during a press conference, Louisiana Governor John Bel Edwards and Lotte CEO Soon Hyo “Steve” Chung told onlookers that the company was relocating its headquarters from Houston to Lake Charles, generating 130 new direct jobs with annual salaries of $80,000 or more.

Lotte also closed an investment deal with Westlake Chemical to construct a $1.9 billion ethane cracker at the same site. Louisiana Economic Development officials estimate the two projects have created 3,000 construction jobs and will create 1,200 non-direct permanent jobs. In total, Lotte is involved in more than $3 billion in projects in Southwest Louisiana.

“We are proud to be increasing our profile as one of the world’s great energy providers,” said Gov. Edwards. “By capitalizing on these new major investments in manufacturing, we also are recruiting some of the best jobs that connect Louisiana’s energy corridor to the corporate boardroom.”

Infrastructure and a specialized workforce are two areas where many competitors around the nation fall short when compared to Southwest Louisiana. Growth has encouraged local and state leaders to find ways to entice workers to the area—which is approximately two hours from Houston and three-and-a-half hours from New Orleans—by investing in quality of life projects, recruiting retail operators and expediting construction of an estimated 11,000 new homes. The Southwest Louisiana Economic Development Alliance oversees a constant effort to identify attractive assets of the five-parish region and market them to the world.

“We’ve been able to get the attention of some of the world’s best companies,” said Swift. “They not only liked what they saw, they decided to build their footprints in southwest Louisiana.”

R.B. Smith, the Alliance’s Vice President of Workforce and Business Development, said companies are contacting his agency asking for ways to enter the market.

“With the announcement of Lotte locating their corporate headquarters here, we are seeing a new level of businesses locating in our region. Headquarters facilities located near production facilities are logical choices. This model allows employees in all functions to see and interact with the entire team. It also changes the business leadership of the region from mid-level to executive-level decision makers living and working in the community. We encourage all of our industries to consider Southwest Louisiana as a potential home base for their headquarters facilities.”

Every kind of business development is a possibility in Southwest Louisiana. Access to interstate, rail, air, water and a skilled workforce make it the land of growth and prosperity.

JOPLIN REGION: HEART OF WORK

The Heart of the U.S. is also the heart of work. The Joplin region is located in the heart of the U.S. With a skilled workforce and efficient transportation system, the Joplin region is a great location for distribution and manufacturing operations.

logistics industry
Alpha Air Center FBO, located at Joplin Regional Airport, offers flight
training to new pilots.

It’s easy to get to there from here: With Interstates 44 and 49 crossing the region, most of the continental U.S. and parts of Canada and Mexico can be reached in two day’s shipping time from the Joplin Region.

Anchored by the Joplin, MO-Miami, OK metropolitan area and the Pittsburg, KS micropolitan area, the Joplin region is the heart of the U.S. The market reaches from the midwest to southwest creating market access to more than 30 million people within a 350-mile radius.

“That market reach is more than what people consider traditional distribution hubs like Tulsa and Kansas City,” noted Kevin Welch, director of the Joplin Regional Partnership.

The Partnership represents more than a dozen cities in seven counties, in the three-state corner of Missouri, Kansas and Oklahoma. This gives companies a choice in picking a location that is right for their specific needs. With Interstates 44 and 49 crossing the region, most of the continental U.S., and parts of Canada and Mexico, can be reached in two day’s shipping time.

The area also has three Class-One railroads and two short-line providers, guaranteeing ample access to rail and additional connectivity to Gulf and West Coast ports. Commercial air service is provided by the Joplin Regional Airport and three other commercial airports from 70 to 110 miles away.

While the Joplin region has great location and excellent transportation access, it is the workforce that makes many companies successful. The region’s workforce gets high marks from area employers, who note employees’ work ethic and commitment to ongoing training. With the region’s history in manufacturing and distribution, people are still interested in working in these two sectors, as well as transportation.

“The commitment and pride in their work residents have is enhanced by the training and education facilities throughout the area,” said Welch.

Missouri Southern State University and Pittsburg State University offer a number of standard and customized programs in business management, quality control, logistics management and applied engineering. In addition, the presence of four community colleges provides a wide array of basic business and technical skills training for manufacturing and distribution firms. New to the mix is the Advanced Training and Training Center, a joint project of Crowder College, Workforce Investment Board and Joplin Area Chamber. This region-serving facility specializes in rapid training in advanced manufacturing and supporting skills.

Along with the key business success factors of central location, strong transportation access, strong workforce and reasonable operations costs, the region has other attributes that are beneficial to distribution and manufacturing operations. Although not available in every county, the region has Foreign Trade Zone areas that provide benefit to companies importing or exporting goods to and from countries outside the U.S.

Companies seeking a central U.S. location with strong market reach, excellent transportation and a great workforce will find the Joplin Region a great place to call home.

For more information, contact Kevin Welch, Director, Joplin Regional Partnership at [email protected] or (417) 624-4150.

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