Art van Bodegraven was, among other roles, chief design officer for the DES Leadership Academy. He passed away on June 18, 2017. He will be greatly missed.
Supply chain visibility was all the rage at one time. The trade publications were chock full of articles and interviews. Conferences were held and keynote addresses spoke to "visibility" to no end. Experts sprang up overnight, and consultants mined the hot new topic for all it was worth.
What it was worth to them, perhaps, was plenty. What it was worth to others was questionable. The furor seems to have died down. Why? What happened?
We think that one reason the furor died down is that visibility is here—a commonplace that we often take for granted. As recently as a dozen years ago, a leading apparel retailer, with genuinely global sourcing and very dense national distribution, conceived a vision for a "glass pipeline" that would provide total supply chain visibility. It knew what it wanted, but it did not have the tools and resources to achieve it. That's no longer an issue. We submit that visibility—at least at the data level—has become table stakes for software providers in all facets of the supply chain business. Maybe this development was a natural evolution, maybe it gained momentum from the visibility craze, or maybe it got a big push from the parcel carriers.
We were suitably impressed a few years ago when FedEx and UPS made what was once a dream—the ability to inform customers of a package's precise location and status at any stage of its journey—a reality. Of course, nowadays you can track it yourself, online, using their systems.
Then, it became "normal" for third-party logistics service providers (3PLs) in the fulfillment business to be able to provide up-to-the-minute information on the status of any order, at any processing stage, to their customers. As you might expect, the customers can now look for themselves, using the 3PLs' Internet-enabled systems.
So, some level of visibility is just about everywhere today. Visibility has become an integral component of all of the big application areas: customer relationship management (CRM); collaborative planning, forecasting and replenishment (CPFR); warehouse management and yard management systems (WMS/YMS); transportation management systems (TMS); product life cycle management (PLM), and so on and so forth. For a long time, the sole holdout was Reverse Logistics (RL). But that bastion has also fallen, with recent announcements of visibility enhancements to RL software, most recently by Newgistics.
Visibility's not the issue
Still, seeking visibility for its own sake would be to miss the point, warns Dr. Lawrence Lapide. Lapide, who is research director at the Massachusetts Institute of Technology's Center for Transportation and Logistics and head of its Supply Chain 2020 project, contends that visibility is not, and never was, the real issue. What matters is what one does about things—conditions, events, trends—that have become visible. At the end of the day, informed action trumps information alone.
Mere visibility—the presentation of data—doesn't have much meaning. It takes some work and planning to construct systems that transform and translate data into information. And it is visible information, not visible data, that can be acted upon to correct or even prevent problems.
Furthermore, there's another component to the equation, and that is that information itself really needs to contribute to intelligence if resulting actions are to be on-target and effective. Sometimes enough context and logic can be built into systems—think decision trees—to permit the leap from data/information to intelligence, and sometimes analysis by the comparatively weak and inefficient human brain is still needed. Information without context is a messy, tricky thing, and related actions can have unintended consequences. Think of trying to eat a fully loaded hamburger without the bun.
For example, it's not helpful to know an onhand inventory quantity. But it's vital to know that there are only three days' worth on hand. But that, in itself, is not useful—it could even be misleading—if a three-month supply is scheduled to arrive tomorrow. That, in turn, is not completely useful unless there is evidence—OK, visibility—that the truck carrying the new shipment is on time and is within 100 miles of its destination.
If more is not on the way, or if the expected delivery is not sufficient, or if the demand has increased, automatic preparation—and presentation for approval—of an electronic purchase order (for expedited delivery, if necessary) is the right way for a system to both provide visibility and promote informed action.
In the opposite case, if the on-hand quantity represents a three-year supply, the system should stimulate disposition and/or support cancellation of any open orders.
Not all visibility is limited to the world of traditional information systems. The kanban system popularized in manufacturing relies on a card—a visible signal for replenishment action. A modern application of the principle developed by Visible Inventory Inc. provides visibility to inventory status at the SKU/bin level. Beyond that, it relies on built-in sensors to determine whether quantities are at reorder points, or at critical levels, and triggers replenishment orders.
The China syndrome
The rapid expansion of international sourcing adds major complexity to the visibility/information/intelligence puzzle. The idea that an international shipment can involve 20 or so physical and informational touch points, along with performance variability of perhaps as much as 40 percent, migrates from the category of frightening to terrifying when some of the operating partners in a global supply chain don't offer integrated visibility in the systems they use. As a consequence, we've regressed (not all, but most of us) to some extent in the age of globalization, stimulating a renaissance of management by hope and other dangerous tactics. That problem is being addressed with new generations of trade management tools that ought to provide long-distance visibility across a global supply chain, and the necessary levels of actionable intelligence on such issues as trade rule compliance. As on the domestic front, visibility merely opens the door to good management—it does not provide it.
Now that we've got more visibility than ever before, it may be time to get introspective about whether we're doing more problem solving—and problem prevention— than before. Keys to success in this arena begin with individual intellectual curiosity—yours. But it requires institutional initiative as well.
Cultures that emphasize, and reward, pro-action and flexibility are, we suspect, found within the companies that are taking advantage of information visibility. They are probably also those who are best at moving up to the level of intelligence— that's G-2 intelligence (military-type intelligence), not IQ intelligence—for the most effective use of what visibility now brings us on a regular and routine basis.
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.