James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP?s Supply Chain Quarterly and a staff writer for DC Velocity.
When most folks think about warehouse management systems (WMS), they assume the software's job is keeping tabs on what goes on inside the warehouse's walls. But for companies running a high-velocity distribution system, it's just as important to have the WMS looking beyond those walls, and keeping track of what products will be arriving and when.
The Manchester, England-based grocer The Co-operative can attest to that. Up until a year and a half ago, it didn't have those capabilities, despite its stature as the largest grocer in the United Kingdom. With annual revenues exceeding 9 billion pounds (U.S. $17 billion), the Co-op also happens to be the world's largest consumer cooperative, a retailer that's owned by its members—in this case, some 4.5 million members.
But software was hardly the most pressing distribution challenge the Co-op was facing at the time. Founded in 1863, the Co-op had grown over the past century and a half through the merger of small cooperative groups. Trouble was, its distribution network had evolved without any planned national infrastructure, and about three years ago, the problems started coming to a head.
At that time, the Co-op was trying to serve the 3,300 stores in its network, many of which are neighborhood shops of less than 3,000 square feet, from 20 warehouses. Some of those warehouses were running short on space. On top of that, it was essentially operating three separate networks for the three types of products that move through its supply chain— ambient goods, which are dry groceries; chilled goods, essentially meats, produce, and dairy items; and frozen foods. The flows were further complicated by the Co-op's tendency to buy the majority of its chilled products in the region of the country where the stores were located.
Delivery zones overlapped and distribution routes weren't optimized, which meant trucks were logging unnecessary miles, reports Trevor Ashworth, the Co-op's director of food retail logistics. Stores were receiving frequent deliveries of ambient items but few of chilled goods. There were also mounting concerns about stock-outs, which can be disastrous for small stores that lack the shelf space to offer an array of brands. The Co-op's management realized it needed to streamline the delivery process to improve goods availability while, ideally, handling store replenishment through a single delivery by a multi-temperature truck. In short, it was time for a distribution network overhaul.
Faster food
In redesigning its network, the Co-op began by building a large national distribution center in Coventry, 95 miles northwest of London. The new facility would be used to store slowmoving products, particularly ambient goods, which would solve the immediate problem of inadequate capacity at some of the other sites.
Before it could move on to the next step in its redesign, however, the Co-op would need a more capable WMS—one that could manage the complex nationwide network. After evaluating several solutions, it chose Manhattan Associates' Warehouse Management solution.
For its WMS pilot, the Co-op selected a new regional distribution center located in Thurrock, just east of London. Built to serve 700 stores in southeastern England, the 325,000-square-foot facility was designed to handle 50 million cases a year and store 14,000 stock-keeping units (SKUs). "We didn't want to put the Manhattan WMS into legacy sites that would be retiring [as part of the DC network redesign]," explains Ashworth.
By building a regional DC in Thurrock, the Co-op hoped to address problems with stock-outs in its stores in the southeastern region, where deliveries are often hampered by congested roadways. Goals included increasing the frequency of store deliveries, improving order lead time, and loading trucks to expedite the unloading and shelf-replenishment processes. "We also wanted to reduce [shipping and order] errors," adds Ashworth.
The WMS went live as soon as the Thurrock facility opened in the first quarter of 2006. Initially, the application was used to assemble loads of ambient products for store deliveries. Later on, chilled and frozen items were added to the mix.
Looking beyond the DC's walls
Today, the WMS oversees the entire receiving process at the Thurrock DC. As suppliers deliver pallets of products, workers verify receipt of the goods by scanning the items' bar codes with radio-frequency terminals. The RF guns transmit information on inbound product to the WMS. The WMS, in turn, sends putaway instructions to forklift drivers, whose vehicles are equipped with RF terminals. The system also manages "let down," when the forklift drivers bring down pallets of product from the upper rack shelves to a low one for pallet or case picking.
In addition, the system oversees the complex order assembly process, which involves building store-replenishment shipments from an assortment of ambient, chilled, and even frozen products. "At any one point in time, the Manhattan WMS has to manage 11 to 13 product categories that have to come together at a single point in time to load the truck," says Ashworth. "It's merging all these types of streams of product together."
The system must also take truck size into account. The Co-op uses a private fleet of 200 multi-temperature vehicles for store deliveries. The trucks range in size from 4.0 to 7.5 metric tons (approximately 8,818 to 16,535 pounds) and have varying load capacities, although the average vehicle can accommodate 26 roll cages. Commonly used in the United Kingdom, roll cages are wheeled containers used to move product off a truck and into a store.
Besides marshaling products and cases to fill a specificsize vehicle, the system has to keep tabs on the different types of products (ambient, chilled, and frozen)—both in storage and en route to the facility—that will be required for the daily fulfillment of store orders. Most stores receive replenishment shipments six days a week, while the largest stores get daily deliveries.
The Thurrock facility itself stocks only fast-moving dry grocery items. Slow-moving ambient items, frozen foods, and special seasonal items are shipped in from the national distribution center in Coventry for reloading onto local delivery trucks. In addition, local suppliers of meat, produce, and dairy items ship product to Thurrock on a justin- time basis for local store replenishment.
The WMS must match up items from all of the various categories that will be needed for a truck delivery to an individual store. Using voice technology from Vocollect, the warehousing application first directs the "assembly operatives" or order pickers to take the fast-movers out of storage and place them in the lane designated for a specific store's shipment. It then provides instructions on which items to pick from the temporary storage chamber where frozen foods are held. Finally, any roll cages or pallets of slowmoving or chilled products needed for the order are crossdocked for inclusion in the store's shipment. "The Manhattan system must control the product over a network rather than just a single DC," says Ashworth. "It has to know how to allocate the stock across our store base."
From worst to best
As for the WMS pilot's results, the Co-op can point to a number of benefits. Product on-shelf availability has improved at its outlets in southeastern England. And Ashworth reports that shipping errors have dropped from two to three parts per 10,000 orders to less than one part, transforming what had been the Co-op's worst-performing region into the best.
On top of that, the WMS, in conjunction with radio-frequency and voice technology, has improved worker productivity in Thurrock by 15 percent. Ashworth notes that the combined use of voice and RF technology has eliminated travel time as well as the need for warehouse workers to stop at the office to obtain paper picking instructions.
The technology has also enabled what Ashworth calls "hot-truck handling." In the past, there was a transition period at the beginning of each shift as incoming workers figured out what work had been done and what tasks remained. "When you have 120 people on a shift—with 120 people coming in and another 120 going out—you lose 10 minutes per person at change-over time; that adds up to a lot of minutes," says Ashworth. Nowadays, the WMS keeps track of what tasks have been completed, which means that as one worker steps off a forklift, the next one can climb right on and pick up where the last worker left off.
The WMS has worked out so well in the Thurrock facility that the Co-op has since deployed it in two other DCs: a new regional DC in Nottingham, England, in January 2007, and the national DC in Coventry in March 2007. The software will be expanded to other regional DCs as they are built up as part of the supply chain redesign, which is scheduled for completion in 2012.
Ashworth says the WMS provides the underpinning for the Co-op's shift in distribution strategy. "We couldn't do this with our old legacy system," he says. "The two go hand in glove—the change in the physical infrastructure with the new information systems."
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.
Businesses dependent on ocean freight are facing shipping delays due to volatile conditions, as the global average trip for ocean shipments climbed to 68 days in the fourth quarter compared to 60 days for that same quarter a year ago, counting time elapsed from initial booking to clearing the gate at the final port, according to E2open.
Those extended transit times and booking delays are the ripple effects of ongoing turmoil at key ports that is being caused by geopolitical tensions, labor shortages, and port congestion, Dallas-based E2open said in its quarterly “Ocean Shipping Index” report.
The most significant contributor to the year-over-year (YoY) increase is actual transit time, alongside extraordinary volatility that has created a complex landscape for businesses dependent on ocean freight, the report found.
"Economic headwinds, geopolitical turbulence and uncertain trade routes are creating unprecedented disruptions within the ocean shipping industry. From continued Red Sea diversions to port congestion and labor unrest, businesses face a complex landscape of obstacles, all while grappling with possibility of new U.S. tariffs," Pawan Joshi, chief strategy officer (CSO) at e2open, said in a release. "We can expect these ongoing issues will be exacerbated by the Lunar New Year holiday, as businesses relying on Asian suppliers often rush to place orders, adding strain to their supply chains.”
Lunar New Year this year runs from January 29 to February 8, and often leads to supply chain disruptions as massive worker travel patterns across Asia leads to closed factories and reduced port capacity.