When it's time for a career change, lots of logistics and IT executives go over to the consulting side. Bob Silverman is one of a select few who did it the other way around.
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.
Logistics professionals have proved remarkably adept at parlaying their work experience into consulting careers. But it's not often that you see someone do it the other way around, going from consultant to practitioner. Bob Silverman has done just that. After spending 23 years as a logistics consultant, he migrated over to the practitioner side, becoming vice president of IT business systems for designer apparel company Tommy Hilfiger.
Silverman started his logistics career in 1983 at the consulting firm Gross & Associates and eventually worked his way up to president. While there, he had wide-ranging general management responsibilities, including oversight of strategic direction, marketing, sales, training/continuing education, and personnel. Silverman also managed over a hundred productivity improvement, operations design, and logistics optimization projects around the world for the firm's customers, which included BMW, Turtle Wax, Becton Dickinson, Borden Foods, Sterling Electronics, and Verizon.
But in 2006, he received an intriguing offer from one of his clients, Tommy Hilfiger. The apparel company was looking for someone to oversee the U.S. implementation of its SAP enterprise resource planning application and wondered if Silverman would be interested. Silverman decided the project was too interesting to pass up and accepted the offer. Today, he manages a staff of 15 IT professionals, supporting the company's warehouse management, transportation management, product design, merchandising, and allocation systems. He also oversees new application development.
Silverman holds a B.A. in mathematics and physics from the Thomas Edison State College in Trenton, N.J. He has served as president of the Warehousing Education and Research Council (WERC) and recently became chair-elect of the board of directors for the Council of Supply Chain Management Professionals (CSCMP).
Q: You have an extensive background as a consultant helping folks with their logistics network strategies and so forth. Yet now you are in, by title, an IT role. What's up with that?
A: Well, you're right. I spent 20 years in consulting, designing and implementing distribution centers and generally managing logistics-related projects for our clients at Gross & Associates. Two years ago, I joined Tommy Hilfiger in the role of vice president of IT systems, overseeing our systems development and support staff, and co-projectmanaging the company's SAP implementation. I'm now in a cross-functional role, managing IT projects, helping start up a distribution center for a new product line, and working with the retail team to assist in bringing online the company's new flagship store on Fifth Avenue in New York City.
Q: What prompted the move from a job that focused primarily on traditional logistics activities to an IT role that supports logistics as well as a lot of other functions?
A: There were actually several dynamics that all came together to make that happen. Number one is I had been in consulting for over 20 years and I was interested in trying something else. Tommy Hilfiger was a client of ours. They were already using SAP in their European operations, but they wanted to roll it out worldwide. They were looking for somebody to project-manage the U.S. side of this initiative. I had some experience with implementing WMS systems in DCs, so the concept of implementing technology wasn't foreign to me, although I had never been in charge of the programming team. But still, what Tommy was looking for was someone to head up that group who had more understanding from the business side as to what the requirements were, as opposed to someone with strong technical skills. I was not the person with the strong IT technical skills.
We agreed that I would come on board and take on that role. I report to our CIO and until very recently was heading up the Applications Development and Support Group here, working on the SAP project until we went live with Phase 1 of the project. Since then, the more technical people have picked it up and are running with the subsequent rollouts.
Q: Were there other factors that drew you to the job?
A: The opportunity was also intriguing to me in that it involved working with Tommy Hilfiger, which is something of an iconic brand in the United States. They were doing some very exciting things at the time, really trying to make some major changes to the company. I saw it as a potential to have a good upside. It was a bit of a risk, but I felt I could go back to consulting if I needed to.
Q: You were able to migrate directly from a logistics job to a broader IT job, albeit one related to logistics. Do you think that speaks to the kind of general business education logistics professionals are bound to get simply by working in the field for a number of years?
A: The ability to have your feet in multiple areas simultaneously certainly helps, whether it's looking at things strategically and tactically at the same time or seeing things from both the end user's and the supplier's perspective. I think that is one of the things that I am able to do, and I think that was certainly helpful in this transition as well.
Q: Which of the skills in your personal skill set have served you best throughout your career?
A: First, I think, is a willingness to be flexible and adaptable. I guess a part of that, as well, is the willingness to learn something new every day. There's always a lot to learn. You need to listen, not assume you know how to handle an issue because you dealt with a similar one some time back. That background can provide a good context and starting point, but you need to pay attention to the nuances of the current project. You always want to bring what you learned on previous projects to the table, but you also have to be willing and able to recognize what is different for each given project and adjust your approach accordingly. I think trying to avoid any stubbornness or arrogance about what you already know is immensely helpful.
Q: So you would advise others to try to avoid coming in with a "been there; done that" attitude?
A: There's no question about it. You have to be willing to listen and avoid that tone of being the expert. I think a lot of time as a consultant, there is a feeling that you need to come in and demonstrate that you are the expert in the area to justify the fact that you were hired. You can't come in acting ignorant about the situation, but at the same time, you also have to be willing to listen and not necessarily jump in and try to be the smart guy in the room. That will backfire on you.
Q: Your job now at Tommy goes well beyond a traditional logistics role. What does the core team responsible for logistics operations seek from you? What do you need to do for them?
A: My job is to bring them the technology and the information they need to address the company's logistics challenges, whether it is information about the goods being manufactured or availability of items or customer sales information. It is really a support role on that side.
Q: What other "internal customers" do you serve at Tommy?
A: It varies, but, as an example, take one of the projects I'm managing right now, which involves the opening of a new distribution center for our footwear business. In that role, I am certainly supporting the logistics team, but I'm also interfacing closely with the finance and production teams as well as, in particular instances, the marketing and visual creative teams.
Q: It's clear that there's a growing awareness among top management that the logistics function is more than just a cost center—it can actually be a source of competitive advantage. What's causing that shift in attitude?
A: I view logistics as the delivery mechanism for an organization's supply chain—the piece that brings it to life. Efficient supply chains have become a key differentiator in a number of industries, a competitive edge, and logistics excellence has been the tool to create that competitive edge—whether by reducing the cost or increasing the speed of bringing goods from the point of design through where they're ultimately acquired by the end user.
This challenge has been exacerbated in the last few years by the run-up in energy costs and the issue of logistics constraints— that the pipeline simply isn't wide enough in certain areas at particular times to handle the flow of goods through the supply chain. In the United States, we've seen this manifested in port congestion, the shortage of truck drivers, and a scarcity of rail capacity. Maybe we'll see it again during the pending Panama Canal expansion project.
Q: What do you see as the "next big thing" in the supply chain profession?
A: I think we could see a quantum leap in intercompany supply chain integration, which will allow companies to gain many of the advantages of being vertically integrated without having to venture far from their core competency area. Before this can happen, however, we need to come up with better methods of sharing data. I see two challenges here: the easier one to solve will be to develop a set of standards for the data and communication protocols; the more difficult one will be scrubbing the data. In many companies, this will require a Herculean effort— in some instances akin to Y2K. But the payoff could be tremendous, and if enough companies participate, it may develop into a situation where companies have no choice but to join in if they want to remain viable.
I know that to some degree, that sounds like it was a previous big thing and we have already moved on to other big things, but I really think we're going to come back to collaboration. A lot was done around the year 2000—between, let's say, 1998 and 2001 or so—but I think there is still a whole untapped area there that really could provide some quantum leaps in terms of bringing product to market faster and, perhaps, more cost effectively. What it would require is far better collaboration and information sharing between companies.
Q: I know you've been involved with WERC and the Material Handling Industry of America (MHIA). Last month, you became chair-elect of CSCMP's board of directors. Can you talk a little bit about the value of getting involved in industry and professional associations?
A: Number one is clearly the ability through networking to see what other people are doing, to get out and listen to conference speakers or go out touring other operations and getting ideas from them. You can learn a lot that way.
Second is if you get involved with the organization in a leadership role, you can benefit greatly just from being around people who are dynamic leaders— people like Elijah Ray, Rick Blasgen, or Tom Speh—and learning from them, just seeing how they run meetings and observing their leadership ability and skills. In a nutshell, I guess, it's the opportunity to be hanging out with the best of the best. If even just a little bit of that rubs off on you, it can be a tremendous asset.
This story first appeared in the September/October issue of Supply Chain Xchange, a journal of thought leadership for the supply chain management profession and a sister publication to AGiLE Business Media & Events’' DC Velocity.
For the trucking industry, operational costs have become the most urgent issue of 2024, even more so than issues around driver shortages and driver retention. That’s because while demand has dropped and rates have plummeted, costs have risen significantly since 2022.
As reported by the American Transportation Research Institute (ATRI), every cost element has increased over the past two years, including diesel prices, insurance premiums, driver rates, and trailer and truck payments. Operating costs increased beyond $2.00 per mile for the first time ever in 2022. This trend continued in 2023, with the total marginal cost of operating a truck rising to $2.27 per mile, marking a new record-high cost. At the same time, the average spot rate for a dry van was $2.02 per mile, meaning that trucking companies would lose $0.25 per mile to haul a dry van load at spot rates.
These high costs have placed a significant burden on the operations of trucking companies, challenging their financial sustainability over the last two years. As a result, 2023 saw approximately 8,000 brokers and 88,000 trucking companies cease operations, including some marquee names, such as Yellow Corp. and Convoy, and decades-long businesses, such as Matheson Trucking and Arnold Transportation Services.
More so than ever before, trucking companies need to get better at efficiently using their assets and reducing operational costs. So, what is a trucking company to do? Technology is the answer! Given the nature of the problem, technology-led innovation will be critical to ensure companies can balance rising costs through efficient operations.
One technology that could be the answer to many of the trucking industry’s issues is the concept of digital twins. A digital twin is a virtual model of a real system and simulates the physical state and behavior of the real system. As the physical system changes state, the digital twin keeps up with the real-world changes and provides predictive and decision-making capabilities built on top of the digital model.
DHL, in a 2023 white paper, suggests that—due to the maturation of technologies such as the internet of things (IoT), cloud computing, artificial intelligence (AI), advanced software engineering paradigms, and virtual reality—digital twins have “come of age” and are now viable across multiple sectors, including transportation. We agree with this assessment and believe that digital twins are essential to radically improving the processes of fleet planning and dispatch.
THE NEED TO AUTOMATE
Outside of attaining procurement efficiencies, trucking companies can achieve lower costs by focusing on critical operational levers such as minimizing deadheads, reducing driver dwell time, and maximizing driver and asset utilization.
However, manual methods of planning and dispatch cannot optimally balance these levers to achieve efficiency and cost control. Even when planners work very hard and owners strive to improve processes, optimizing fleet planning is not a problem humans can solve routinely. Planning is a computationally intensive activity. To achieve fleet-level efficiencies, the planner has to consider all possible truck-to-load combinations in real time and solve for many operational constraints such as drivers’ hours of service, customer windows, and driver home time, to name just a few. These computations become even more complex when you add in the dynamic nature of real-world conditions such as trucks getting stuck in traffic or breaking down or orders getting delayed. This is not a task humans do best! For these sorts of tasks, technology has the upper hand.
When a company creates a digital twin of its trucking network, it has a real-time model that factors in truck locations, drivers’ hours of service, and loads being executed and planned. Planners can then use this digital model to assess possible decisions and select ones that increase asset utilization, improve customer and driver satisfaction, and lower costs.
For example, a digital twin of the network can offer significant insights and analysis on the state of the network, including exceptions such as delayed pickups and deliveries, unassigned loads, and trucks needing assignments. Backed by AI that takes business rules into account, digital twins can allow companies to optimize their fleet performance by finding the most efficient load assignments and dynamically adjusting in real time to changes in traffic patterns and weather, customer delays, truck issues, and so on.
With a digital twin, carriers can optimize the matching of assets, drivers, and freight. Typically, an investment in this innovative technology results in a 20%+ increase in productive miles per truck, while also improving driver pay and significantly decreasing driver churn. Drivers get paid by the miles they run, so when they run more, they are able to make more money, resulting in less need to chase the next job in search of better pay.
ADDITIONAL BENEFITS
Digital twins also combat deadheading, another source of driver dissatisfaction and cost inefficiencies. On average, over-the-road drivers spend 17%–20% of road miles driving empty. Using a digital twin, a company can search across several freight sources to find a load that perfectly matches the deadhead leg without impacting downstream commitments. These additional revenue miles will help drivers to maximize their earnings on the road and carriers to maximize their asset utilization and profitability.
The traditional manual dispatch planning model is becoming increasingly outdated—each planner and fleet manager tasked with overseeing 30 to 40 vehicles. Carriers try to manage this problem by dividing the fleet into manageable chunks, which results in cross-fleet inefficiencies. Such a system isn’t scalable. A digital twin acts as an equalizer for small and mid-sized fleets. It enables carriers to expand by venturing beyond the fixed routes and network they were forced to run out of fear of additional logistical complexity.
A digital twin can also give an organization the transparency and visibility it needs to find and fix inefficiencies. A successful carrier will leverage the technology to learn from the hitches in its operations. While this visibility is beneficial in its own right, it also provides the first step toward a seamless, digitized operation. “Digital revolution” is a buzzword frequently heard at transportation conferences. Yet not too many organizations are dedicated to digitizing their operations past the visibility stage. The end goal should be using decision-support systems to automate key elements of the system, thus freeing up planners from their daily rote tasks to focus on problems that only humans can solve.
Finally incorporating a digital twin can also help trucking companies work toward the broader trend of creating greener supply chains. Because they have lower deadhead and dwell times, trucking companies that have adopted a digital twin can be more attractive to shippers that are looking for more efficient operations that meet their environmental, social, and governance (ESG) goals.
THE FUTURE IS HERE
It is important to note that the benefits described here are not dreams for the future; digital twin technology is already here. In fact, choosing a digital twin can seem daunting because there are already a spectrum of options out there. First and foremost, an organization must ensure that the digital twin it selects aligns with both the goals and the scope of its operation.
Additionally, the ideal digital twin should:
Operate in near real time. A digital twin should be able to refresh as often as the network changes.
Be able to factor in specific customer delivery requirements as well as asset- and operator-specific constraints.
Be computationally efficient and comprehensive as it considers thousands of permutations in milliseconds. The digital twin should be able to reoptimize an entire fleet’s schedule of multi-day routes on the fly.
Before implementing a digital twin, carriers need to make sure that they have robust data management processes in place. Electronic logging devices (ELDs), customers’ tenders, billing, shipments, and so on are already inundating carriers with a glut of data. However, the manual nature of operations in many carriers leads to poor data quality. Carriers will need to invest in data management approaches to improve data quality to support the generation and use of high-fidelity digital twins. Otherwise, the digital twin will not be representative of reality and companies will run into an issue of “garbage in, garbage out.”
REINVENTION AND TRANSFORMATION
While data management is critical, change management through the ranks of dispatch operations is often a harder task. In fact, the largest roadblock carriers face when undergoing a digital transformation is the lack of willingness to change, not the technology itself. Many carriers cling to outmoded planning methods. Planners, used to operating based on well-worn business rules and tribal knowledge, could be wary of the technology and resistant to change. They may need to be assured that, while it is true that every trucking network is uniquely complex, digital twins can be set up to model the intricacies of their specific dispatch operations and drive value to the network. A significant amount of time and resources will need to be expended on change management. Otherwise even though trucking companies may invest in cutting-edge technology, they won't be able to fully capitalize on the added value it can provide.
As the truckload industry works through the current freight cycle, it is important to realize that change is inevitable. Carriers will need to reinvent their operations and invest in technologies to ride through the busts and booms of future freight cycles. Recent global events point to the many ways that wrenches can be thrown into global transportation networks, and the fact that such volatility is here to stay. Digital twins can provide companies with the visibility to navigate such changes. But above all, an operation that uses the digital twin to drive decisions can make customers and drivers happy, and help the carriers keep their heads above water during times such as now.
More than half of home deliveries to U.S. online shoppers arrive either late, damaged, or at the wrong address, totaling 53% of orders with one of those issues, according to a study from e-commerce software vendor HubBox.
Specifically, almost one in three (27%) home delivery packages are currently delivered late, while almost one in six (15%) online orders are delivered to the wrong address. The results come from Atlanta-based HubBox, which works with networks and carriers to provide retailers with pickup access to over 400,000 locations worldwide.
Furthermore, the survey of more than 1,000 U.S. shoppers revealed consumers’ top five home delivery pain-points: 1. Orders delivered to the wrong house or block (37%), 2. Packages left with neighbors they don’t like or don’t speak to (30%), 3. Item arriving damaged (28%), 4. Delivery is late (27%), and 5. Having to wait at home for deliveries (25%).
According to HubBox, those frustrations have pushed nearly half (49%) of shoppers to consider out-of-home delivery collection points to overcome poor delivery service.
“Shoppers expect seamless experiences throughout their buying journey – and nowhere more so than in delivery and the last mile where shoppers’ anticipation of receiving their order is highest,” HubBox CEO Sam Jarvis said in a release. “Retailers that offer flexible and convenient delivery experiences, such as pickup points or BOPIS, (Buy Online Pick Up in Store) stand a better chance, and, if they can’t meet these expectations, they risk significant lost sales and future loyalty.”
In addition, more shoppers now expect compensation for late deliveries; over half (53%) expect money off their next order if a delivery is delayed, while 63% expect delivery charges to be waived and another 54% expect a free delivery code for their next order.
“Late deliveries don’t just erode hard-won customer loyalty. Increasingly, as retailers are having to compensate customers for delayed orders, they eat away at already slim margins – and this at a time when the cost of fulfilment is rising and some carriers are charging additional fees for home deliveries,” Jarvis said. “By diversifying fulfilment options, such as adding local pickup, retailers can ensure demand can be met across their network even during peak trading periods such as Black Friday and the Christmas holidays while ensuring consumer experience is maintained.”
Regular online readers of DC Velocity and Supply Chain Xchange have probably noticed something new during the past few weeks. Our team has been working for months to produce shiny new websites that allow you to find the supply chain news and stories you need more easily.
It is always good for a media brand to undergo a refresh every once in a while. We certainly are not alone in retooling our websites; most of you likely go through that rather complex process every few years. But this was more than just your average refresh. We did it to take advantage of the most recent developments in artificial intelligence (AI).
Most of the AI work will take place behind the scenes. We will not, for instance, use AI to generate our stories. Those will still be written by our award-winning editorial team (I realize I’m biased, but I believe them to be the best in the business). Instead, we will be applying AI to things like graphics, search functions, and prioritizing relevant stories to make it easier for you to find the information you need along with related content.
We have also redesigned the websites’ layouts to make it quick and easy to find articles on specific topics. For example, content on DC Velocity’s new site is divided into five categories: material handling, robotics, transportation, technology, and supply chain services. We also offer a robust video section, including case histories, webcasts, and executive interviews, plus our weekly podcasts.
Over on the Supply Chain Xchange site, we have organized articles into categories that align with the traditional five phases of supply chain management: plan, procure, produce, move, and store. Plus, we added a “tech” category just to round it off. You can also find links to our videos, newsletters, podcasts, webcasts, blogs, and much more on the site.
Our mobile-app users will also notice some enhancements. An increasing number of you are receiving your daily supply chain news on your phones and tablets, so we have revamped our sites for optimal performance on those devices. For instance, you’ll find that related stories will appear right after the article you’re reading in case you want to delve further into the topic.
However you view us, you will find snappier headlines, more graphics and illustrations, and sites that are easier to navigate.
I would personally like to thank our management, IT department, and editors for their work in making this transition a reality. In our more than 20 years as a media company, this is our largest expansion into digital yet.
We hope you enjoy the experience.
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In this chart, the red and green bars represent Trucking Conditions Index for 2024. The blue line represents the Trucking Conditions Index for 2023. The index shows that while business conditions for trucking companies improved in August of 2024 versus July of 2024, they are still overall negative.
FTR’s Trucking Conditions Index improved in August to -1.39 from the reading of -5.59 in July. The Bloomington, Indiana-based firm forecasts that its TCI readings will remain mostly negative-to-neutral through the beginning of 2025.
“Trucking is en route to more favorable conditions next year, but the road remains bumpy as both freight volume and capacity utilization are still soft, keeping rates weak. Our forecasts continue to show the truck freight market starting to favor carriers modestly before the second quarter of next year,” Avery Vise, FTR’s vice president of trucking, said in a release.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index, a positive score represents good, optimistic conditions, and a negative score shows the opposite.
A coalition of truckers is applauding the latest round of $30 million in federal funding to address what they call a “national truck parking crisis,” created when drivers face an imperative to pull over and stop when they cap out their hours of service, yet can seldom find a safe spot for their vehicle.
According to the White House, a total of 44 projects were selected in this round of funding, including projects that improve safety, mobility, and economic competitiveness, constructing major bridges, expanding port capacity, and redesigning interchanges. The money is the latest in a series of large infrastructure investments that have included nearly $12.8 billion in funding through the INFRA and Mega programs for 140 projects across 42 states, Washington D.C., and Puerto Rico. The money funds: 35 bridge projects, 18 port projects, 20 rail projects, and 85 highway improvement projects.
In a statement, the Owner-Operator Independent Drivers Association (OOIDA) said the federal funds would make a big difference in driver safety and transportation networks.
"Lack of safe truck parking has been a top concern of truckers for decades and as a truck driver, I can tell you firsthand that when truckers don’t have a safe place to park, we are put in a no-win situation. We must either continue to drive while fatigued or out of legal driving time, or park in an undesignated and unsafe location like the side of the road or abandoned lot,” OOIDA President Todd Spencer said in a release. “It forces truck drivers to make a choice between safety and following federal Hours-of-Service rules. OOIDA and the 150,000 small business truckers we represent thank Secretary Buttigieg and the Department for their increased focus on resolving an issue that has plagued our industry for decades.”