The days when you could impress customers simply by meeting their demands are long gone, says Pete Burney of Hallmark Cards. Now, you have to be psychic as well.
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.
When you work for the company that's been urging customers to "send the very best" for the past 50 years, you can hardly afford to do less than that yourself. That's been Pete Burney's challenge at Hallmark Cards. A 17-year veteran of Hallmark, Burney spent the past two and a half years as the company's operations vice president of logistics solutions, with responsibility for order fulfillment of all Hallmark products to 40,000 retail outlets across North America.
Burney, who was promoted to a corporate officer position this summer, says the game has changed for logisticians in the last decade. For many years, he says, "sending the very best" was largely a matter of making sure that the orders the company shipped out were accurate, complete, and on time. It takes a lot more than that to impress customers today. From here on out, he says, logistics success will be defined less by basic order fulfillment capabilities than by practitioners' ability to anticipate customer demands and to develop new capabilities to meet those demands before it even occurs to the customers to make them.
Since joining the company in 1990, Burney has served in a variety of operational roles at Hallmark, which is the world's largest maker of greeting cards (the company reported consolidated net revenues of $4.1 billion in 2006). He holds a bachelor's degree in secondary education from Louisiana State University and an M.B.A. from the University of Massachusetts. He spoke recently with DC VELOCITY Group Editorial Director Mitch Mac Donald about his career at Hallmark and the challenges that lie ahead for logistics and supply chain professionals.
Q: Would you describe the outbound logistics operation that you managed for the past few years at Hallmark?
A: Our logistics operation is a pretty typical operation. We manage orders through a DC network that includes both our own DCs and DCs operated by our thirdparty logistics service providers. From those DCs, we ship heavy freight as ell as small packages to 40,000 retail outlets across North America—a combination of mass merchandise retailers and our network of specialty shops. We also manage and coordinate our own transportation services, although we are not a private fleet operator.
Q: Could you tell us A something about your background?
A: I came to Hallmark in 1990 after a four-and-ahalf-year tour of duty as a communications officer in the Army, where my last role was as an air movement officer in logistics. My career at Hallmark began with a regional distribution center section manager role. That ultimately led to other logistics operations jobs, including transportation administrator, department manager, and finance and logistics manager for one of our retail groups.
Q: You've obviously developed a wide range of skills during your logistics career. Which of those skills have proved most useful on a day-to-day basis?
A: Certainly, the positions I've had thus far have given me a solid background in the fundamentals of logistics—the blocking and tackling of the job. But the skills I'm most mindful of in my current role relate more specifically to things like planning, leadership, and change management. In recent years, like most companies, Hallmark has had to continually adapt to new customer requirements, improve speed and flexibility, and develop new logistics capabilities. The skill I focus on most is the ability to sustain the operation while managing significant change and trying to bring new capabilities to the operations to better service customers.
Q: The logistician's job has become a lot more complicated in the past decade, hasn't it?
A: Absolutely. The old operating model in which the transportation department's main role was to ship whatever people asked us to ship doesn't really work anymore. Today, it's absolutely critical that we collaborate closely with our sales teams and our inventory people and our strategic business units. That type of collaboration will help us to adapt to the changing business environment and to develop new capabilities that will allow us to meet customer needs even before we're asked to meet them. In logistics, we have to be adept at forging partnerships across the company, not just at managing what goes on within the four walls of a distribution center.
Q: Do you think that's why logistics is becoming increasingly visible within the corporation?
A: I think it is largely the fact that people drive an organization, and in recent years, our logistics people have had to respond quickly to rapidly changing customer needs and, as a result, have gained a strong understanding of how business models are now evolving. When you look at today's list of Fortune 500 companies, you realize that many of the companies—Yahoo, Amazon, and eBay come to mind—did not exist 10 or 15 years ago. Now, they're introducing new business models and new requirements that you have to anticipate. I don't think you can respond well to customer demands if you aren't really thinking about what your business might look like five years from now.
As a result of all that, we have begun to use the language of business and to think more broadly about the supply chain—not just about transportation, warehousing, and distribution. Logistics is the critical component of the supply chain. We really have no choice, if we want to succeed, but to take a very broad view in doing things like responding to demand, predicting demand, linking upstream to both our suppliers and our internal production groups, and really understanding consumer demands and customer demands.
Q: What are some of the biggest challenges that you face in achieving and maintaining excellence in your logistics operations?
A: I don't think our challenges are very different from the ones other consumer goods companies face. Like everybody else, we're always trying to figure out how to take advantage of new technologies like radio-frequency identification (RFID). Anticipating new customer requirements is always something that we are mindful of when we think about new technologies like RFID—not just what we know about its capabilities and what it can do for us today, but how we might use it in the future. How might we harness that technology not only for the benefit of our customers, but also internally to our organization to improve our operating efficiencies? That is one area that we are constantly pursuing.
Another challenge that we have in common with many other companies is maintaining operating efficiency within the organization as a way to improve cost structure. We need, quite simply, to do everything better, faster, and more cost effectively all the time. That mission is paramount.
Q: What are some of the biggest changes you've seen in the logistics field over the years?
A: One has to be the advent of strategic partnerships with third-party logistics service providers. As you look at managing capabilities, you need to distinguish between those capabilities that are best developed and handled internally, and those that might be performed better by an outside partner. The goal today is to work with solid third-party logistics service providers that bring a distinct set of competencies that complement yours.
Q: We've just talked about some of the changes you've witnessed during your two-plus decades in the logistics field. Is there anything that hasn't changed?
A: The thing you want to point to there is quality.We have been so successful here at maintaining a very, very high order fill rate, which is our primary outbound quality metric for items shipped. Frankly, regardless of what changes with customer demands, the basic order fulfillment requirements never change—you still have to make sure your shipments are accurate, complete, and on time. That is a fundamental part of logistics that we pride ourselves on. I think any logistics organization should see this as a core competency.
Q: What advice would you give to a young person just starting out in the logistics field?
A: Secure opportunities that give you a good fundamental understanding of logistics. Look for positions on a path toward leadership roles within distribution centers, operations, transportation, and perhaps an engineering or planning role. I think that is the set of skills to develop.
Q: So get in on the ground floor, then?
A: I think so. Early on in their career, they should find an opportunity through either a job within the organization or through formal training to better understand the business of logistics and planning. You have to expand beyond just one side of an operation to truly succeed. You need to gain a broad view. A good logistics professional today has to have a sense of how the overall supply chain works, along with some solid grounding in the fundamental areas, like transportation, DC operations, and manufacturing.
Q: Any closing thoughts?
A: In the field of logistics today, the people who are going to be most successful are those who constantly develop an arsenal of new capabilities and who anticipate customer requirements. The basic activities—transportation, order fulfillment, packing—don't change much; it's the requirements of customers and consumers that change. The ability to develop new capabilities and anticipate changing demands, I think, is what distinguishes someone who is just doing a job from someone who really advances the profession.
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
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.
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.
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.