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."
Economic activity in the logistics industry expanded in January, growing at its fastest clip in more than two years, according to the latest Logistics Managers’ Index (LMI) report, released this week.
The LMI jumped nearly five points from December to a reading of 62, reflecting continued steady growth in the U.S. economy along with faster-than-expected inventory growth across the sector as retailers, wholesalers, and manufacturers attempted to manage the uncertainty of tariffs and a changing regulatory environment. The January reading represented the fastest rate of expansion since June 2022, the LMI researchers said.
An LMI reading above 50 indicates growth across warehousing and transportation markets, and a reading below 50 indicates contraction. The LMI has remained in the mid- to high 50s range for most of the past year, indicating moderate, consistent growth in logistics markets.
Inventory levels rose 8.5 points from December, driven by downstream retailers stocking up ahead of the Trump administration’s potential tariffs on imports from Mexico, Canada, and China. Those increases led to higher costs throughout the industry: inventory costs, warehousing prices, and transportation prices all expanded to readings above 70, indicating strong growth. This occurred alongside slowing growth in warehousing and transportation capacity, suggesting that prices are up due to demand rather than other factors, such as inflation, according to the LMI researchers.
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
As commodities go, furniture presents its share of manufacturing and distribution challenges. For one thing, it's bulky. Second, its main components—wood and cloth—are easily damaged in transit. Third, much of it is manufactured overseas, making for some very long supply chains with all the associated risks. And finally, completed pieces can sit on the showroom floor for weeks or months, tying up inventory dollars and valuable retail space.
In other words, the furniture market is ripe for disruption. And John "Jay" Rogers wants to be the catalyst. In 2022, he cofounded a company that takes a whole new approach to furniture manufacturing—one that leverages the power of 3D printing and robotics. Rogers serves as CEO of that company, Haddy, which essentially aims to transform how furniture—and all elements of the "built environment"—are designed, manufactured, distributed, and, ultimately, recycled.
Rogers graduated from Princeton University and went to work for a medical device startup in China before moving to a hedge fund company, where he became a Chartered Financial Analyst (CFA). After that, he joined the U.S. Marine Corps, serving eight years in the infantry. Following two combat tours, he earned an MBA from the Harvard Business School and became a consultant for McKinsey & Co.
During this time, he founded Local Motors, a next-generation vehicle manufacturer that launched the world's first 3D-printed car, the Strati, in 2014. In 2021, he brought the technology to the furniture industry to launch Haddy. The father of four boys, Rogers is also a director of the RBR Foundation, a philanthropic organization focused on education and health care.
Rogers spoke recently with DC Velocity Group Editorial Director David Maloney on an episode of the "Logistics Matters" podcast.
Q: Could you tell us about Haddy and how this unique company came to be?
A: Absolutely. We have believed in the future of distributed digital manufacturing for a long time. The world has gone from being heavily globalized to one where lengthy supply chains are a liability—thanks to factors like the growing risk of terrorist attacks and the threat of tariffs. At the same time, there are more capabilities to produce things locally. Haddy is an outgrowth of those general trends.
Adoption of the technologies used in 3D printing has been decidedly uneven, although we do hear about applications like tissue bioprinting and food printing as well as the printing of trays for dental aligners. At Haddy, we saw an opportunity to take advantage of large-scale structural printing to approach the furniture and furnishings industry. The technology and software that make this possible are already here.
Q: Furniture is a very mature market. Why did you see this as a market that was ripe for disruption?
A:The furniture market has actually been disrupted many times in the last 200 years. The manufacturing of furniture for U.S. consumption originally took place in England. It then moved to Boston and from there to New Amsterdam, the Midwest, and North Carolina. Eventually, it went to Taiwan, then China, and now Vietnam, Indonesia, and Thailand. And each of those moves brought some type of disruption.
Other disruptions have been based on design. You can look at things like the advent of glue-laminated wood with Herman Miller, MillerKnoll, and the Eames [furniture design and manufacturing] movement. And you can look at changes in the way manufacturing is powered—the move from manual operations to machine-driven operations powered by steam and electricity. So the furniture industry has been continuously disrupted, sometimes by labor markets and sometimes by machines and methods.
What's happening now is that we're seeing changes in the way that labor is applied in furniture manufacturing. Furniture has traditionally been put together by human hands. But today, we have an opportunity to reassign those hands to processes that take place around the edges of furniture production. The hands are now directing robotics through programming and design; they're not actually making the furniture.
And so, we see this mature market as being one that's been continuously disrupted during the last 200 years. And this disruption now has a lot to do with changing the way that labor interacts with the making of furniture.
Q: How do your 3D printers actually create the furniture?
A:All 3D printing is not the same. The 3D printers we use are so-called "hybrid" systems. When we say hybrid, what we mean is that they're not just printers—they are holders, printers, polishers, and cutters, and they also do milling and things like that. We measure things and then print things, which is the additive portion. Then we can do subtractive and polishing work—re-measuring, moving, and printing parts again. And so, these hybrid systems are the actual makers of the furniture.
Q: What types of products are you making?
A: We've started with hardline or case goods, as they're sometimes known, for both residential and commercial use—cabinets, wall bookshelves, freestanding bookshelves, tables, rigid chairs, planters, and the like. Basically, we've been concentrating on products that don't have upholstery.
It's not that upholstery isn't necessary in furniture, as it is used in many pieces. But right now, we have found that digital furniture manufacturing becomes analog again when you have to factor in the sewing process. And so, to move quickly and fully leverage the advantages of digital manufacturing, we're sticking to the hardline groups, except for a couple of pieces that we have debuted that have 3D-printed cushions, which are super cool.
Q: Of course, 3D printers create objects in layers. What types of materials are you running through your 3D printers to create this furniture?
A: We use recycled materials, primarily polymer composites—a bio-compostable polymer or a synthetic polymer. We look for either recycled or bio-compostable [materials], which we then reinforce with fibers and fillers, and that's what makes them composites. To create the bio-compostables, we marry them with bio-fibers, such as hemp or bamboo. For synthetic materials, we marry them with things like glass or carbon fibers.
Q: Does producing goods via 3D printing allow you to customize products easily?
A: Absolutely. The real problem in the furniture and furnishings industries is that when you tool up to make something with a jig, a fixture, or a mold, you tend to be less creative because you now feel you have to make and sell a lot of that item to justify the investment.
One of the great promises of 3D printing is that it doesn't have a mold and doesn't require tooling. It exists in the digital realm before it becomes physical, and so customization is part and parcel of the process.
I would also add that people aren't necessarily looking for one-off furniture. Just because we can customize doesn't mean we're telling customers that once we've delivered a product, we break the digital mold, so to speak. We still feel that people like styles and trends created by designers, but the customization really allows enterprise clients—like businesses, retailers, and architects—to think more freely.
Customization is most useful in allowing people to "iterate" quickly. Our designers can do something digitally first without having to build a tool, which frees them to be more creative. Plus, because our material is fully recyclable, if we print something for the first time and find it doesn't work, we can just recycle it. So there's really no penalty for a failed first printing—in fact, those failures bring their own rewards in the form of lessons we can apply in future digital and physical iterations.
Q: You currently produce your furniture in an automated microfactory in Florida, with plans to set up several more. Could you talk a little about what your microfactory looks like and how you distribute the finished goods?
A: Our microfactory is a 30,000-square-foot box that mainly contains the robots that make our furniture along with shipping docks. But we don't intend for our microfactories to be storage warehouses and trans-shipment facilities like the kind you'd typically see in the furniture industry—all of the trappings of a global supply chain. Instead, a microfactory is meant to be a site where you print the product, put it on a dock, and then ship it out. So a microfactory is essentially an enabler of regional manufacturing and distribution.
Q: Do you manufacture your products on a print-to-order basis as opposed to a print-to-stock model?
A: No. We may someday get to the point where we receive an order digitally, print it, and then send it out on a truck the next day. But right now, we aren't set up to do a mini-delivery to one customer out of a microfactory.
We are an enterprise company that partners with architects, designers, builders, and retailers, who then distribute our furnishings to their customers. We are not trying to go direct-to-consumer at this stage. It's not the way a microfactory is set up to distribute goods.
Q: You've mentioned your company's use of recycled materials. Could you talk a little bit about other ways you're looking to reduce waste and help support a circular economy?
A: Yes. Sustainability and a circular economy are really something that you have to plan for. In our case, our plans call for moving toward a distributed digital manufacturing model, where we establish microfactories in various regions around the world to serve customers within a 10-hour driving radius of the factory. That is a pretty large area, so we could cover the United States with just four or five microfactories.
That also means that we can credibly build our recycling network as part of our microfactory setup. As I mentioned, we use recycled polymer stock in our production, so we're keeping that material out of a landfill. And then we tell our enterprise customers that while the furniture they're buying is extremely durable, when they're ready to run a special and offer customers a credit for turning in their used furniture, we'll buy back the material. Buying back that material actually reduces our costs because it's already been composited and created and recaptured. So our microfactory network is well designed for circularity in concert with our enterprise customers.
Generative AI (GenAI) is being deployed by 72% of supply chain organizations, but most are experiencing just middling results for productivity and ROI, according to a survey by Gartner, Inc.
That’s because productivity gains from the use of GenAI for individual, desk-based workers are not translating to greater team-level productivity. Additionally, the deployment of GenAI tools is increasing anxiety among many employees, providing a dampening effect on their productivity, Gartner found.
To solve those problems, chief supply chain officers (CSCOs) deploying GenAI need to shift from a sole focus on efficiency to a strategy that incorporates full organizational productivity. This strategy must better incorporate frontline workers, assuage growing employee anxieties from the use of GenAI tools, and focus on use-cases that promote creativity and innovation, rather than only on saving time.
"Early GenAI deployments within supply chain reveal a productivity paradox," Sam Berndt, Senior Director in Gartner’s Supply Chain practice, said in the report. "While its use has enhanced individual productivity for desk-based roles, these gains are not cascading through the rest of the function and are actually making the overall working environment worse for many employees. CSCOs need to retool their deployment strategies to address these negative outcomes.”
As part of the research, Gartner surveyed 265 global respondents in August 2024 to assess the impact of GenAI in supply chain organizations. In addition to the survey, Gartner conducted 75 qualitative interviews with supply chain leaders to gain deeper insights into the deployment and impact of GenAI on productivity, ROI, and employee experience, focusing on both desk-based and frontline workers.
Gartner’s data showed an increase in productivity from GenAI for desk-based workers, with GenAI tools saving 4.11 hours of time weekly for these employees. The time saved also correlated to increased output and higher quality work. However, these gains decreased when assessing team-level productivity. The amount of time saved declined to 1.5 hours per team member weekly, and there was no correlation to either improved output or higher quality of work.
Additional negative organizational impacts of GenAI deployments include:
Frontline workers have failed to make similar productivity gains as their desk-based counterparts, despite recording a similar amount of time savings from the use of GenAI tools.
Employees report higher levels of anxiety as they are exposed to a growing number of GenAI tools at work, with the average supply chain employee now utilizing 3.6 GenAI tools on average.
Higher anxiety among employees correlates to lower levels of overall productivity.
“In their pursuit of efficiency and time savings, CSCOs may be inadvertently creating a productivity ‘doom loop,’ whereby they continuously pilot new GenAI tools, increasing employee anxiety, which leads to lower levels of productivity,” said Berndt. “Rather than introducing even more GenAI tools into the work environment, CSCOs need to reexamine their overall strategy.”
According to Gartner, three ways to better boost organizational productivity through GenAI are: find creativity-based GenAI use cases to unlock benefits beyond mere time savings; train employees how to make use of the time they are saving from the use GenAI tools; and shift the focus from measuring automation to measuring innovation.
According to Arvato, it made the move in order to better serve the U.S. e-commerce sector, which has experienced high growth rates in recent years and is expected to grow year-on-year by 5% within the next five years.
The two acquisitions follow Arvato’s purchase three months ago of ATC Computer Transport & Logistics, an Irish firm that specializes in high-security transport and technical services in the data center industry. Following the latest deals, Arvato will have a total U.S. network of 16 warehouses with about seven million square feet of space.
Terms of the deal were not disclosed.
Carbel is a Florida-based 3PL with a strong focus on fashion and retail. It offers custom warehousing, distribution, storage, and transportation services, operating out of six facilities in the U.S., with a footprint of 1.6 million square feet of warehouse space in Florida (2), Pennsylvania (2), California, and New York.
Florida-based United Customs Services offers import and export solutions, specializing in remote location filing across the U.S., customs clearance, and trade compliance. CTPAT-certified since 2007, United Customs Services says it is known for simplifying global trade processes that help streamline operations for clients in international markets.
“With deep expertise in retail and apparel logistics services, Carbel and United Customs Services are the perfect partners to strengthen our ability to provide even more tailored solutions to our clients. Our combined knowledge and our joint commitment to excellence will drive our growth within the US and open new opportunities,” Arvato CEO Frank Schirrmeister said in a release.
And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.
One of the biggest targets for innovation spending will artificial intelligence, as supply chain leaders look to use AI to automate time-consuming tasks. The survey showed that 41% are making AI a key part of their innovation strategy, with a third already leveraging it for data visibility, 29% for quality control, and 26% for labor optimization.
Still, lingering concerns around how to effectively and securely implement AI are leading some companies to sidestep the technology altogether. More than a third – 35% – said they’re largely prevented from using AI because of company policy, leaving an opportunity to streamline operations on the table.
“Avoiding AI entirely is no longer an option. Implementing it strategically can give supply chain-focused companies a serious competitive advantage,” Kristi Montgomery, Vice President, Innovation, Research & Development at Kenco, said in a release. “Now’s the time for organizations to explore and experiment with the tech, especially for automating data-heavy operations such as demand planning, shipping, and receiving to optimize your operations and unlock true efficiency.”
Among the survey’s other top findings:
there was essentially three-way tie for which physical automation tools professionals are looking to adopt in the coming year: robotics (43%), sensors and automatic identification (40%), and 3D printing (40%).
professionals tend to select a proven developer for providing supply chain innovation, but many also pick start-ups. Forty-five percent said they work with a mix of new and established developers, compared to 39% who work with established technologies only.
there’s room to grow in partnering with 3PLs for innovation: only 13% said their 3PL identified a need for innovation, and just 8% partnered with a 3PL to bring a technology to life.