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.
In his bestseller The Tipping Point, journalist Malcolm Gladwell offered a new perspective on dramatic and unexpected change. Ideas, actions, and rumors sometimes behave like infectious disease epidemics, he argued. And even a small "outbreak" can have enormous effects on politics, on business, and on society.
The demand for supply chain speed may be a case in point. Though we won't subject the phenomenon to a rigorous tipping point examination, we can think of several seemingly minor developments that have driven it to a top-of-mind position among practitioners, academics, and consultants.
First came Federal Express in 1973 and its galvanizing slogan: "When it absolutely, positively has to be there overnight!" Federal Express revolutionized both the way carriers transport small parcels and documents, and the way we all view the radically fast movement of goods. (Later, the company changed its name to FedEx, which is, not coincidentally, much faster to say than its predecessor was.)
Then, the sure-to-fail Amazon.com phenomenon struck—and stuck. Emerging in 1995, Amazon raised the expectations of Americans, and later the world, about the online shopping experience. Today, we expect to be able to order virtually anything online and have it arrive on our doorsteps in a ridiculously short time. Whether we wanted an item that quickly was—and is—beside the point.
Speed, deconstructed
Suddenly, speed seems to be on everyone's mind. It also seems to be at the heart of business competition.
There are several facets to supply chain speed. Perhaps the most obvious is fulfillment speed— how rapidly an order is filled. Not just picked and packed, or processed and released, but how quickly it is delivered into a customer's hands. The importance of integrated performance among supply chain partners is immediately clear.
Why is speed so essential? For one thing, the competition is promising—and delivering—rapid fulfillment. It can be a source of competitive advantage. In some segments of the technology business, for example, it's not uncommon for a customer to place an order with two competing suppliers. The order that arrives first is accepted. The one that shows up second is rejected.
For another, almost all companies operate today with lower inventories than they used to (exceptions being when Far Eastern sourcing is involved). Rapid replenishment from suppliers is vital, then, to stock positions and to manufacturing and to customer service levels. The suppliers that consistently deliver quickly and on time tend to be rewarded with keeping the business, if not getting more, assuming that quality and accuracy are perfect.
Another important aspect of supply chain speed is speed to market. It involves, indeed demands, faster product development cycles, more and faster involvement of suppliers in the development process, collapsed timelines for packaging and marketing activity, white-knuckle scheduling through production, and extraordinary planning and coordination of launch communications and movement.
Flawless execution on this stage can keep a company in the spotlight for a long time, while the competition is still struggling to get an audition.
The concept of speed to market illustrates an important characteristic of supply chain speed. It is really about cultural attitude and behavior, with the mechanics really being a manifestation of core strengths and values.
That's right. Organizations that exercise, expect, and demand speed in their interactions and relationships are the winners in the supply chain speed race. It's all part of a whole. Speed to change. Speed to make decisions. Speed to act and react.
We'll take the case a step further and suggest that organizations that aren't good at what we might call "cultural speed" might not understand the context for operational speed—and what it takes to sustain satisfying relationships that depend on performance speed.
So, here's our fundamental position: Speed is good and speed is necessary. But indiscriminate speed can be if not dangerous, at least to little purpose. When we become enamored of speed for speed's sake, we are on a slippery slope. And a costly one.
Some things don't need the ultimate in speed. You know it, your customers know it, and their customers know it. They know it in their heart of hearts, whether they'll cut you any performance slack or not. Take body parts for collision repair, for example. The repairs will take days, if not weeks, to complete; the parts don't need to be at the shop the next morning. Similarly, the winter jacket from the outdoor outfitter doesn't need to be in your hands until the snow flies.
Some things do need speed. Outof-stock goods, sell-one/make-one JIT items, mission-critical service parts for equipment and machinery, communications network components in the wake of a storm—it's a long, and valid, list.
In our considered opinion, too few companies know how to evaluate and discriminate among these possibilities, how to apply different—and appropriate—levels of speed to them, and how to communicate the cost consequences (and benefits) to their customers.
Just fast enough
We, in the collective, owe it to our customers to talk straight to them about the costs of—and the alternatives to—the levels of service they demand. Few of us have the courage to pull it off, to tell them that the speed of service they are demanding (or that we are voluntarily providing) comes at a cost—a cost that may be needlessly high.
Think about it. What would it mean to your cost structure if you could ship some things in two days instead of one? What if you could aggregate enough to shift some things from LTL to truckload movement? Or from truckload to rail? Could you use less expedited air? Are all your valueadding activities really adding value? How much of the savings could you pass on to your customers? And what would that do for your price competitiveness?
Finding the right balance of speed and service for the right mix of products can be a win-win for you and the customer. And maybe—just maybe—whoever talks straight and knows when and how to apply supply chain speed can win out over the pedal-to-the-metal, speed-at-all-costs gang.
Let's not get too carried away here. Nobody, least of all us, wants to go back to the bad old days of "Allow 8 to 10 weeks for delivery." Or 52-week lead times for critical industrial components. These were hallmarks of the old economy, and the old supply-driven supply chains, in the days before we called them supply chains.
The United States wasn't really competitive then. The global economy did not yet exist. And we took, as individual consumers and as business partners, what "they" would give us—in quality, in quantity, and in time.
Those days are long gone, thank goodness. And we would like to have that book in less than a week, please.
Online merchants should consider seven key factors about American consumers in order to optimize their sales and operations this holiday season, according to a report from DHL eCommerce.
First, many of the most powerful sales platforms are marketplaces. With nearly universal appeal, 99% of U.S. shoppers buy from marketplaces, ranked in popularity from Amazon (92%) to Walmart (68%), eBay (47%), Temu (32%), Etsy (28%), and Shein (21%).
Second, they use them often, with 61% of American shoppers buying online at least once a week. Among the most popular items are online clothing and footwear (63%), followed by consumer electronics (33%) and health supplements (30%).
Third, delivery is a crucial aspect of making the sale. Fully 94% of U.S. shoppers say delivery options influence where they shop online, and 45% of consumers abandon their baskets if their preferred delivery option is not offered.
That finding meshes with another report released this week, as a white paper from FedEx Corp. and Morning Consult said that 75% of consumers prioritize free shipping over fast shipping. Over half of those surveyed (57%) prioritize free shipping when making an online purchase, even more than finding the best prices (54%). In fact, 81% of shoppers are willing to increase their spending to meet a retailer’s free shipping threshold, FedEx said.
In additional findings from DHL, the Weston, Florida-based company found:
43% of Americans have an online shopping subscription, with pet food subscriptions being particularly popular (44% compared to 25% globally). Social Media Influence:
61% of shoppers use social media for shopping inspiration, and 26% have made a purchase directly on a social platform.
37% of Americans buy from online retailers in other countries, with 70% doing so at least once a month. Of the 49% of Americans who buy from abroad, most shop from China (64%), followed by the U.K. (29%), France (23%), Canada (15%), and Germany (13%).
While 58% of shoppers say sustainability is important, they are not necessarily willing to pay more for sustainable delivery options.
Schneider says its FreightPower platform now offers owner-operators significantly more access to Schneider’s range of freight options. That can help drivers to generate revenue and strengthen their business through: increased access to freight, high drop and hook rates of over 95% of loads, and a trip planning feature that calculates road miles.
“Collaborating with owner-operators is an important component in the success of our business and the reliable service we can provide customers, which is why the network has grown tremendously in the last 25 years,” Schneider Senior Vice President and General Manager of Truckload and Mexico John Bozec said in a release. "We want to invest in tools that support owner-operators in running and growing their businesses. With Schneider FreightPower, they gain access to better load management, increasing their productivity and revenue potential.”
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."
In addition to its flagship Clorox bleach product, Oakland, California-based Clorox manages a diverse catalog of brands including Hidden Valley Ranch, Glad, Pine-Sol, Burt’s Bees, Kingsford, Scoop Away, Fresh Step, 409, Brita, Liquid Plumr, and Tilex.
British carbon emissions reduction platform provider M2030 is designed to help suppliers measure, manage and reduce carbon emissions. The new partnership aims to advance decarbonization throughout Clorox's value chain through the collection of emissions data, jointly identified and defined actions for reduction and continuous upskilling.
The program, which will record key figures on energy, will be gradually rolled out to several suppliers of the company's strategic raw materials and packaging, which collectively represents more than half of Clorox's scope 3 emissions.
M2030 enables suppliers to regularly track and share their progress with other customers using the M2030 platform. Suppliers will also be able to export relevant compatible data for submission to the Carbon Disclosure Project (CDP), a global disclosure system to manage environmental data.
"As part of Clorox's efforts to foster a cleaner world, we have a responsibility to ensure our suppliers are equipped with the capabilities necessary for forging their own sustainability journeys," said Niki King, Chief Sustainability Officer at The Clorox Company. "Climate action is a complex endeavor that requires companies to engage all parts of their supply chain in order to meaningfully reduce their environmental impact."
Supply chain risk analytics company Everstream Analytics has launched a product that can quantify the impact of leading climate indicators and project how identified risk will impact customer supply chains.
Expanding upon the weather and climate intelligence Everstream already provides, the new “Climate Risk Scores” tool enables clients to apply eight climate indicator risk projection scores to their facilities and supplier locations to forecast future climate risk and support business continuity.
The tool leverages data from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) to project scores to varying locations using those eight category indicators: tropical cyclone, river flood, sea level rise, heat, fire weather, cold, drought and precipitation.
The Climate Risk Scores capability provides indicator risk projections for key natural disaster and weather risks into 2040, 2050 and 2100, offering several forecast scenarios at each juncture. The proactive planning tool can apply these insights to an organization’s systems via APIs, to directly incorporate climate projections and risk severity levels into your action systems for smarter decisions. Climate Risk scores offer insights into how these new operations may be affected, allowing organizations to make informed decisions and mitigate risks proactively.
“As temperatures and extreme weather events around the world continue to rise, businesses can no longer ignore the impact of climate change on their operations and suppliers,” Jon Davis, Chief Meteorologist at Everstream Analytics, said in a release. “We’ve consulted with the world’s largest brands on the top risk indicators impacting their operations, and we’re thrilled to bring this industry-first capability into Explore to automate access for all our clients. With pathways ranging from low to high impact, this capability further enables organizations to grasp the full spectrum of potential outcomes in real-time, make informed decisions and proactively mitigate risks.”