The dry spell's over and there's money in the IT budget once again. You could blow it on software. Or you could integrate all of your systems and transform your business.
The economy's humming, and there's money in your it budget for the first time in years. But if you're tempted to go out and blow a bundle on software, hold that thought. Chances are, you already have all the apps you need. What you might not have—and what you will most assuredly need—is an information technology platform that ties together all the programs, big and small, running in different sections of your supply chain. That way, you have more hope of getting data to flow from suppliers, distributors, wholesalers and retailers and back again without constant human prompting.
But where do you start? How do you go about weaving together the tangled strands of your information sources? For many companies, the answer lies with their existing software vendors. As unlikely a proposition as it may seem, these vendors often prove willing to help integrate their own systems with those from other vendors.
Consider, for example, the experience of Family Dollar Stores Inc., the second largest dollar store chain in the United States, which turned to one of its software vendors, G-Log, when it needed help with integration. Family Dollar Stores wanted to feed information from its order management and transportation appointment systems into G-Log's GC3 logistics planning and management system. Even though the first was from another vendor, Retek Logistics Solutions, and the second a homegrown mainframe affair, G-Log was more than happy to oblige.
G-Log's director of product marketing, John Murphy, says this is just a reflection of a general market trend—part of G-Log's job these days is dealing with other people's software. "There's more strategic integration. It's an overall market indicator," says Murphy. "There's more IT money, and organizations are looking at their overall IT infrastructure and design and asking for systems integration help."
With data about the movement of goods pouring in faster and in greater detail than ever before, companies will scurry to build and maintain infrastructures that support the smooth exchange of information between software systems not only inside a company but outside as well. All players in the supply chain game will need greater integration of systems to make the most of all that real-time data.
"If you take the average IT budget and look at the proportion spent on applications versus infrastructure, in the next few years, the portion spent on infrastructure will go up in inverse proportion to that spent on applications," says Eric Austvold, research director focused on enterprise applications and technology strategies at AMR Research Inc. in Boston. "The applications people have are probably enough for now. But in order to coordinate the relationships between all the trading partners, you need a level of technology that sits on top of that that helps [create] a symbiotic working together of all the technologies."
Family Dollar's transportation project manager, Helen Crotty, certainly sees benefits from weaving together the different supply chain software systems her company uses. The company generates appointments for warehouse delivery in the mainframe, which—thanks to integration—are now sent back over into the G-Log system, where the software automatically sends out a tender to a selected carrier. "That has really streamlined our process nicely," Crotty says.
The G-Log system now also corrals cargo receiving information from the mainframe, making for accurate estimates of when an empty trailer needs to be picked up and again sending notice to the carrier. On the imports side, Crotty has overseen a tie-in between one of the company's freight forwarders, Globe Express, and the GC3 system, enabling her to track how vendors are delivering against purchase orders and deadlines. The freight forwarder generates information about milestones—departure from a foreign port, Customs clearance and so on—which give the GC3 system more data to crunch in planning and managing the logistics network.
Is it difficult to get systems to talk? "It can be," says Crotty, explaining that it's tough to get the right data flowing from the right sources into the right places in order to mimic the actual flow of goods. "The main thing I find is that you've got to be able to do a lot of testing. You've got to think through every scenario and even replicate those scenarios. It can be difficult to go in and manipulate data to get it to represent the scenario we want."
Crotty believes using an outsider to help with integration was the right short-term solution for Family Dollar, but for deeper integration, she plans to use her in-house IT capabilities. "We couldn't have gone this far in this timeframe without G-Log. They've written 90 percent of our integration," Crotty says. "But our plans going forward are to build the skill set internally. We think it's important to be able to support that internally. Especially in transportation, the environment is ever-evolving. You want to be flexible, upgrade systems and make changes. In the long term we feel it's better to own that skill set."
Ins and outs
Gough Grubbs, head of logistics at Stage Stores Inc., a Houston-based department store owner, has also taken the hybrid approach, tackling much of his systems integration work in-house but also outsourcing where expedient. For example, Grubbs relied solely on in-house resources when it came to tying his RedPrairie transportation management system (TMS) to his warehouse management system (WMS) in order to generate an appointment schedule for pickups from the warehouse dock. "You're just making sure that the data can be handed off from one process to the next, making sure you match all the fields," he says. Grubbs said he felt confident about tying those systems together because he'd built schedules manually for years, so he understood the business processes involved and how information should flow from one system into another. "Now you let systems talk to systems, and they do the same thing, where before a person had to take data from separate sources and compile it all manually," Grubbs says.
Grubbs says he was helped by knowing the processes controlled by warehouse and sorter management software from when they were tracked with Excel spreadsheets and Access databases. It also helps that computer programs simply talk to one another more easily these days, because of common languages like XML (eXtensible Markup Language). "Interfacing is becoming so common that everybody does it now and it's minimizing the differences in platforms," Grubbs says. "There was a time when you could only look at a product if it was on the same platform [as others in use]. That's no longer a critical factor."
His successes notwithstanding, Grubbs didn't hesitate to call in an outsider when it came to a knottier integration problem. Grubbs used an outside software vendor—Real Time Integration Inc. (RTI), based in Melbourne, Fla.—to weave together information from Stage Stores' merchandising system, which handles pricing and orders from suppliers, with a new warehouse management system. Both these systems are from Retek, but RTI provides the control for the automated sorters in the warehouse, a process that sits between the two. Stage Stores had been working with RTI sorters since 2000, so it was a natural step for Grubbs to ask RTI to help make everything fit together when he decided to install the new WMS earlier this year.
Grubbs says he went with RTI after seeing the company improve the sorter system over the preceding two years. "When we introduced the WMS system, we had to maintain the sorters but tell the WMS what we were doing, in order to gain many of the advantages of a WMS. This meant huge complexity for RTI," Grubbs says. "Now, we can do in-house audits, cycle counts—we can carve out designated stores and stop the flow of goods and dollars and do inventory for that one store without compromising the flow of inventory to anyone else. That's worth a lot."
The increased communication between Stage Stores and its upstream suppliers and downstream customers has helped Grubbs fine-tune some business processes, he says. "This is a very key point to the success that we've had with the WMS. We learned as we found out how it works that the buyers needed to know more about how the product was packaged and shipped than they had needed to know before. If you continue to process in the old way," Grubbs says, "you don't reap all the benefits."
Grubbs adds that the TMS system has opened up opportunities to collaborate with vendors, too. "These new [truck driver] hours of service rules make things like pickup a lot tighter. Now they're being forced to anticipate not only schedules, but the cube [volume] of a trailer. We're surprised how many vendors don't know how to calculate cube," Grubbs says.
Integrating WMS and TMS to give a full picture of the cargo—how much there is, when it's going to be ready for pickup and so on—makes working with suppliers and buyers much easier. "I know collaboration has been a buzzword for a while, but now it's being forced as an issue because of the cost implications of not having it," says Grubbs. "So those who don't have systems in-house for doing that are probably being driven to consider it if they want to compete in the big world."
Support systems
That notion is seconded by Austvold, who sees integration as a necessity for anyone who hopes to keep up with the sea changes taking place in supply chain management and logistics. "We're seeing a shift where manufacturers are looking to move away from an algorithm-based planning system into which you feed data and it comes up with a forecast," says Austvold. "They're looking to augment that with real-time data feeds—such as RFID tags that capture the selling of a product as it goes through, giving feedback to the manufacturer in real time. This will have a huge impact on manufacturing strategy, especially the international ones who have to decide whether to have goods finished in China or postpone final assembly to somewhere closer to where the end customers are," he says. "This is going to have a profound impact on logistics scenarios."
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.
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.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!
Toyota Material Handling and its nationwide network of dealers showcased their commitment to improving their local communities during the company’s annual “Lift the Community Day.” Since 2021, Toyota associates have participated in an annual day-long philanthropic event held near Toyota’s Columbus, Indiana, headquarters. This year, the initiative expanded to include participation from Toyota’s dealers, increasing the impact on communities throughout the U.S. A total of 324 Toyota associates completed 2,300 hours of community service during this year’s event.
The PMMI Foundation, the charitable arm of PMMI, The Association for Packaging and Processing Technologies, awarded nearly $200,000 in scholarships to students pursuing careers in the packaging and processing industry. Each year, the PMMI Foundation provides academic scholarships to students studying packaging, food processing, and engineering to underscore its commitment to the future of the packaging and processing industry.
Truck leasing and fleet management services provider Fleet Advantage hosted its “Kids Around the Corner Foundation” back-to-school backpack drive in July. During the event, company associates assembled 200 backpacks filled with essential school supplies for high school-age students. The backpacks were then delivered to Henderson Behavioral Health’s Youth & Family Services location in Tamarac, Florida.
For the past seven years, third-party logistics service specialist ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.