Skip to content
Search AI Powered

Latest Stories

leadership

that visibility thing

To be a supply chain leader, regardless of your role, you must focus on two key areas: end-to-end visibility and a standardized way to implement solutions for customers.

There was a time when companies that outsourced activities to a third-party logistics provider (3PL) just wanted the basics: inbound and outbound transportation and warehousing. But as a recent survey indicates, that is no longer enough. In a study of outsourcing patterns conducted by Georgia Tech, Cap Gemini Ernst & Young, and Ryder, more than one-third of the North American respondents and more than 40 percent of the Western European respondents identified supply chain planning systems, electronic markets and supplier management systems as requirements for the future. The common denominator? The need to increase visibility into the supply chain.

We believe the mandate is clear. To be a supply chain leader, regardless of your role, you must focus on two key areas. First, you must look at ways to increase end-to-end visibility. And second, in a global economy with global customers, you must find ways to standardize the way you implement solutions for customers.


Visibility 2.0
As the 3PL industry took off,many 3PLs found they had to expand their service offerings. Faced with a choice of expanding internally or taking the acquisition route, most opted for the latter. From a customer's perspective this "one-stop-shop" approach should have increased supply chain visibility. But it quickly became clear that the 3PLs faced the same integration problems their customers did, hampering our ability to provide true visibility across the various parts of the supply chain we were providing to our customers.

That's a problem. A global business that draws components from a variety of sources, uses multiple modes of transport, holds inventory and delivers a finished product to an international customer base requires predictability and visibility across the order cycle. Tracking at the shipment level alone is no longer sufficient. Recognizing this, we set out to invest in tools to provide real-time inventory visibility throughout the supply chain.

As Exel began sizing up this end-to-end visibility challenge, we also realized that we needed a way to hook into systems used by other players in the supply chain, including our clien ts' and our suppliers' ERP systems and even systems operated by competitors, some of whom were also involved in our clients' supply chains. Yet nothing on the market addressed this need: We would have to create our own system.

Exel developed its first-generation visibility tool in-house. But when it began work on the second version, Exel called in G-Log, a leading logistics software provider. The result of that collaboration, our Supply Chain Integrator system, is an end-to-end supply chain visibility tool that not only aggregates inventory quantities by location but extends to all the links in the supp ly chain, whether they're still a work in progress, in the final assembly stages or in transit. With this tool, we can track all the way to the product serial number level.

In effect, we have replaced inventory with information. We have found that in complex global supply chains, effective management of information is as important as management of the physical flow of materials and goods. For one customer, data-storage device manufacturer Maxtor, improvements in visibility provided the following benefits:

  • A 30-percent reduction in regional transportation costs.
  • An increase in inventory turns to 23.3 percent.
  • A reduction of inventory levels by over 16 percent.
  • Tighter control over in-transit product flows.
  • A reduction in total end-customer cycle time to 48 hours from 72.
  • A significant reduction of product loss and damage levels by ongoing product flow checks.

A sustainable advantage?
Impressive as these results may be, there will always be skeptics who ask: Is it repeatable? Anyone can achieve great one-time results; it's the ability to continually achieve excellent results that will lead to a sustainable competitive advantage.

We knew we had to create a global, repeatable approach to developing customer solutions and implementing them. This would require us to come up with both designs and project management/implementation methodologies that would ensure that we could deliver what we were selling. But we also realized that our solutions would not achieve the same level of results in all industries.Given that limitation, we chose to target specific vertical markets.

This point bears further discussion. Sometimes suppliers are so focused on the size of the contract or the name of the potential customer that they forget to consider the fit with their processes and capabilities. Though suppliers must certainly be responsive to their customers' changing needs, adding unique capabilities for a new market segment has both real and hidden costs. Though no one wants to turn down business, leadership requires a long-term view of where each company's headed.

With the methodologies in place, our employees developed a four-step process for designing and implementing solutions for our customers. Referred to as the "Exel Way," that process is based on the four Ds: Define, Design, Detail and Deliver, which can be summarized as follows:

Define. The design team identifies opportunities for improving the supply chain, including the identification of new routes to market.

Design. Managers work to create the optimum solution to meet customer needs and exploit market opportunities. We then test solutions using simulation and modeling techniques to optimize cost and test for risk from external factors.

Detail. Detailed operational plans are produced and validated, and a start -up plan created.

Deliver. Successful implementation is ensured through careful resource planning and extensive operations experience.

To assure successful implementation, we apply the core project management methodologies - planning, monitoring, controlling and reporting - to each job. This process culminates in an engineered solution that extends all the way down to the shop floor with standard operating procedures and work instructions. From there, an ongoing continuous improvement effort enables us to keep the cost reductions and efficiency improvements coming.

The Latest

Artificial Intelligence

AI: Is it the real deal?

More Stories

Logistics economy picked up speed in January

Logistics Managers' Index

Logistics economy picked up speed in January

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.

Keep ReadingShow less

Featured

Disrupting the furniture supply chain: An interview with Jay Rogers

Disrupting the furniture supply chain: An interview with Jay Rogers

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.

Keep ReadingShow less
chart of GenAI effect on workforce

Gartner: GenAI tools create anxiety among employees

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.

Keep ReadingShow less
warehouse worker driving forklift between racks

German 3PL Arvato acquires two U.S. logistics firms

The German third party logistics provider (3PL) Arvato this week acquired the U.S.-headquartered companies Carbel LLC and United Customs Services, saying the move would grow its client base, particularly in the fashion, beauty, and lifestyle segments.

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.

Keep ReadingShow less
photo collage of warehouse tech

Supply chain pros are wary of inflation and labor woes

The top worries that supply chain leaders hope to address with new innovations this year include inflationary concerns (68%) and labor shortages (50%), according to a survey on innovation from the third-party logistics provider (3PL) Kenco.

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.

Keep ReadingShow less