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.
Who's ultimately responsible for your company's supply chain? If it's not your CEO or president, then you could be in trouble. For a decade now, the message has been hard to miss: Without support from the top—the very top—you may never be able to truly optimize your operations.
To find a success story that supports this claim, you need look no further than your friendly neighborhood Wal-Mart. The late Sam Walton, founder of Wal-Mart, saw the value of his retail stores' supply chain as a competitive force back when terms like "logistics" and "supply chain" either didn't exist or were limited to military usage. Shortly before his passing, Walton cited logistics excellence as the primary reason why his little variety store in Bentonville, Ark., had grown into one of the greatest business successes of the 20th century.
For every CEO who gets it, of course, there are dozens who don't. Yet Walton's pioneering vision for supply chain excellence has not been lost on academics and consultants. For more than 15 years, they've churned out research projects, white papers and dissertations on the topic, often accompanied by charts and graphs that would give Albert Einstein a headache. They've all drawn much the same conclusion: If your corporate-level executives aren't actively involved in driving supply chain optimization, your operation will fall short of its potential.
So why aren't we there yet? Perhaps it's the complexity of supply chain operations and the lack of a clear, simple, understandable definition of the supply chain itself. Harried CEOs often don't have the time to sit and listen to a 60-plus minute presentation. These folks need sound bites and bullet points.
That's why a comment made by Cliff Lynch, the subject of our May issue's Thought Leader Profile (see DC VELOCITY, May 2003), stopped me in my tracks. "Your supply chain is your company," he said. As soon as I heard it, I started to think about how beautiful that statement was in its simplicity. Great minds in this field have spent countless hours struggling to define a supply chain. The result has been widespread disagreement and confusion. With six simple words, Lynch cleared it all up.
His rationale is equally clear. Lynch maintains that supp ly chain operations are so complex and far-reaching that the only person who can truly manage all the moving parts is the person who manages the overall company. "You've got logistics, which includes your transportation, distribution center and warehouse activities. You've got manufacturing. You've got procurement, human resources, sales and finance." he says. "It encompasses everything, and then some."
Maybe , just maybe, Lynch's comment will prove to be the magic bullet: When presented with the simple notion that "the supply chain is the company," CEOs will take note and begin leading the charge.
If that happens, maybe we won't have to keep asking ourselves: "Are we there yet?"
While many companies are launching artificial intelligence (AI) products for use as generic “co-pilots” or consumer-focused gadgets, the Swedish enterprise resource planning (ERP) software vendor IFS says its “Industrial AI” version supports industry-specific processes in “hardcore” sectors based on assets such as power grids, cell phone networks, aircraft maintenance, elevator operation, and construction management.
“Industrial AI is at the very core the solutions we are powering for customers. They are pushing us for ready-to-use AI that they can adopt quickly to solve real industrial challenges like labor shortages, supply chain disruption, [and] stagnated productivity," IFS's Chief Customer Officer, Cathie Hall, said in a release.
In presentations at its user conference in Orlando today, known as "IFS Unleashed," the company said that its latest IFS Cloud 24R2 release supports more than 60 in-depth Industrial AI scenarios. They span generative AI examples like: content generation for training and reports; recommendations for sourcing and suppliers; and contextual knowledge for assembly instruction. The tools also include predictive AI applications like event forecasting; optimization of resources and capacity; and anomaly detection for proactive quality control.
In remarks from the keynote stage, new IFS CEO Mark Moffat—who was appointed to the top office in January—said the company may be less well known than ERP vendors such as SAP, IBM, Oracle, and Infor, but it benefits from a tighter focus on its core users. Instead of selling software across dozens of industries, IFS serves just six industries: aerospace and defense, construction and engineering, energy and utilities, manufacturing, service, and telecommunications.
Thanks to that tight approach, he said the company has earned top Gartner rankings for its software products in field service management (FSM), enterprise asset management (EAM), enterprise resource planning (ERP), and enterprise service management (ESM). And to compound that advantage, Moffat said IFS continues to grow swiftly through acquisition, having bought up a handful of companies in recent months: Assyst, Ultimo, Boka, empowermx, Bolo, Tobin, Merrick, and Copperleaf.
“You need an AI business plan” Moffat told the room. “If you have an AI business plan, that’s terrific, but you can improve it. This area is just moving so fast.”
The top three corporate development priorities in consulting firm PwC’s current strategy are climate, artificial intelligence (AI), and business model reinvention (BMR), the company said in remarks today at an Orlando user conference for IFS software.
That approach meshes well with IFS, the Swedish firm which has added dozens of AI applications to its cloud-based enterprise resource planning (ERP) tools in recent months, that firm said at its "IFS Unleashed" event in Orlando. And underlying the industry’s rush to AI is the growing availability of massive amounts of data, PwC analyst Matthew Duffy said in a session at the show.
According to Duffy, data drives all the major technology changes that PwC advises businesses to examine: subscription or as-a-service models, connected devices and sensors, and conversions between business to business (B2B0 and business to consumer (B2C) approaches.
“Data availability now is greater than it’s ever been, and that’s where AI comes into play,” Duffy said. “It’s not just about driving cost efficiencies in an existing business model, but understanding your customer and your customer’s customer, so you can create a whole new value proposition.”
In fact, he said that PwC is not just giving that advice to its clients but applying it to the firm’s own strategy as well. That can be seen in the firm’s move in recent years to build its “Connected Solutions” business unit.
However, that trend is counterbalanced by economic uncertainty driven by geopolitics, which is prompting many companies to diversity their supply chains, Dun & Bradstreet said in its “Q4 2024 Global Business Optimism Insights” report, which was based on research conducted during the third quarter.
“While overall global business optimism has increased and inflation has abated, it’s important to recognize that geopolitics contribute to economic uncertainty,” Neeraj Sahai, president of Dun & Bradstreet International, said in a release. “Industry-specific regulatory risks and more stringent data requirements have emerged as the top concerns among a third of respondents. To mitigate these risks, businesses are considering diversifying their supply chains and markets to manage regulatory risk.”
According to the report, nearly four in five businesses are expressing increased optimism in domestic and export orders, capital expenditures, and financial risk due to a combination of easing financial pressures, shifts in monetary policies, robust regulatory frameworks, and higher participation in sustainability initiatives.
U.S. businesses recorded a nearly 9% rise in optimism, aided by falling inflation and expectations of further rate cuts. Similarly, business optimism in the U.K. and Spain showed notable recoveries as their respective central banks initiated monetary easing, rising by 13% and 9%, respectively. Emerging economies, such as Argentina and India, saw jumps in optimism levels due to declining inflation and increased domestic demand respectively.
"Businesses are increasingly confident as borrowing costs decline, boosting optimism for higher sales, stronger exports, and reduced financial risks," Arun Singh, Global Chief Economist at Dun & Bradstreet, said. "This confidence is driving capital investments, with easing supply chain pressures supporting growth in the year's final quarter."
The firms’ “GEP Global Supply Chain Volatility Index” tracks demand conditions, shortages, transportation costs, inventories, and backlogs based on a monthly survey of 27,000 businesses.
The rise in underutilized vendor capacity was driven by a deterioration in global demand. Factory purchasing activity was at its weakest in the year-to-date, with procurement trends in all major continents worsening in September and signaling gloomier prospects for economies heading into Q4, the report said.
According to the report, the slowing economy was seen across the major regions:
North America factory purchasing activity deteriorates more quickly in September, with demand at its weakest year-to-date, signaling a quickly slowing U.S. economy
Factory procurement activity in China fell for a third straight month, and devastation from Typhoon Yagi hit vendors feeding Southeast Asian markets like Vietnam
Europe's industrial recession deepens, leading to an even larger increase in supplier spare capacity
"September is the fourth straight month of declining demand and the third month running that the world's supply chains have spare capacity, as manufacturing becomes an increasing drag on the major economies," Jagadish Turimella, president of GEP, said in a release. "With the potential of a widening war in the Middle East impacting oil, and the possibility of more tariffs and trade barriers in the new year, manufacturers should prioritize agility and resilience in their procurement and supply chains."
The third-party logistics service provider (3PL) Total Distribution Inc. (TDI) is continuing to grow through acquisitions, announcing today that it has bought REO Processing & REO Logistics.
Terms of the deal were not disclosed, but REO Processing & REO Logistics is headquartered in West Virginia with 10 facilities across West Virginia in Parkersburg, Vienna, Huntington, Kenova, and Nitro as well as in Atlanta, GA.
Headquartered in Canton, Ohio, TDI is a wholly owned subsidiary of Peoples Services Inc. (PSI). The combined TDI and PSI businesses operate over 12 million square feet of contract and public warehouse space located in 65 facilities in eight states including Michigan, Ohio, West Virginia, New Jersey, Virginia, North Carolina, South Carolina, and Florida.
As an asset-based 3PL, the PSI network offers a range of specialized material handling and storage services including many value-added activities such as drumming, milling, tolling, packaging, kitting, inventory management, transloading, cross docking, transportation, and brokerage services.
This latest move follows a series of other acquisitions, as TDI bought D+S Distribution, Inc. and Integrated Logistics Services Inc. in May, and Swafford Trucking, Inc., Swafford Warehousing, Inc., and Swafford Transportation, Inc. in February. The company also bought Presidential Express Trucking, Inc. and Presidential Express Warehousing & Distribution, Inc. in 2023.