When Grayling Industries needed a real-time view of inventory on both sides of the U.S.-Mexico border, it turned to rented software for help. Now, the mid-sized company knows exactly what's what?and where it's at.
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
There's something interesting about inventory visibility: Everybody wants it, many software vendors promise it, yet plenty of companies still don't have it. It isn't easy for any company to achieve, of course. But it's especially challenging for companies that have multiple suppliers, do business across borders, and cannot afford costly, time-consuming software implementations involving supply chain partners.
Grayling Industries fits all three of those categories, yet the manufacturer of asbestos-abatement supplies knows exactly what inventory is on hand at any given moment—not just in its own facilities but also in those of its top suppliers and its third-party logistics (3PL) partner. The mid-sized shipper was able to achieve this feat by getting its business partners to join it in using an on-demand inventory and warehouse management system (WMS) that makes it easy to share information across companies.
Cross-border confusion
Grayling Industries, headquartered in Alpharetta, Ga., sells protective liners for intermediate bulk containers (IBCs), bulk bags, and totes; disposal bags for asbestos; decontamination showers; and chemicals for asbestos and lead paint removal. About half of its $20 million in annual business involves custom orders, according to Carlos Rubio, Grayling's director of finance and operations.
The company serves customers from warehouses in Atlanta, Toronto, and Nijmegen, the Netherlands. Most of its products are assembled in a 60,000-square-foot, ISO-certified maquiladora in Juarez, Mexico, where more than 40 unique, custom-designed machines form polyethylene into liners, bags, and other items. About 5 percent of the polyethylene sheeting and other materials used in manufacturing comes from Asia and Europe, 15 percent is supplied from Mexico, and the balance comes from the United States, says Rubio. Materials for assembly are shipped in full trailers and ocean containers or by less-than-truckload transportation to Juarez. About 80 percent of the finished product is sold to customers in the United States, and on average, some 600 full trailer loads of finished goods cross the Rio Grande each year.
All of that back-and-forth across the border created some information gaps. One of those was a lack of real-time information on inbound shipments from suppliers. In the past, Grayling stored those shipments in its customs broker's warehouse, where shipment information was keyed in and updated only once a day. "If a truck came in later that night, we weren't aware of it until the end of the next day," Rubio says. "We were basing decisions on the inventory status at 5 p.m."
As a result, the plant sometimes did not know that material it urgently needed on the production lines was sitting in the broker's facility. Worse still, it sometimes ran out of inventory, forcing it to shut down a production line. That was bad news for a company that routinely has order backlogs and needs to keep its production lines humming. Making matters worse, purchase order and delivery information was slow to arrive, and more time was lost in rekeying and reconciling that information before Grayling's accounting system could pay suppliers.
The big switch
With responsibility for both operations and finance, Rubio understood the importance of keeping up with the pace of orders while optimizing the timing of supplier payments. To achieve both objectives, the company would need an up-to-the-minute view of inbound orders from suppliers and outbound shipments to Juarez. He decided to make two big changes in the way Grayling handled its cross-border business.
The first was to implement software that could handle several tasks, including informing suppliers of replenishment requirements; tracking inbound and outbound inventory; providing Grayling and its supply chain partners with real-time updates; and integrating with the shipper's enterprise resource planning (ERP) system. There were several software products that could fulfill Grayling's needs, but Rubio faced some constraints that narrowed the field of contenders. For one thing, the shipper could not afford a long, costly implementation. For another, the system would have to be affordable and easy for Grayling's supply chain partners—some of which were small, family-owned companies—to install and use.
The Inventory and Warehouse Management System from SmartTurn met all of Grayling's criteria. At a cost of just $500 per month and no limit on the number of users, the on-demand system was very affordable. As with other applications delivered over the Internet under the "software as a service" (SaaS) model, there would be no need for a long and costly installation, customization, or modifications to existing systems. Upgrades and maintenance would be handled at the source and become automatically available to all users at no extra cost. And because the license holder would be able to control what data external partners could access and modify, security would not be a concern.
The second big change was to shift responsibility for the storage and handling of inbound and outbound shipments to a 3PL that could be more flexible and responsive than the customs broker. The manufacturer chose Prologistics, a small 3PL in El Paso, Texas, that specializes in U.S.-Mexico trade. Prologistics had been handling some of Grayling's shipments, and Rubio was pleased with the 3PL's service quality and fees. The one drawback was that the small business had no WMS and relied on paper documents and physical inspections. But once Prologistics agreed to use SmartTurn's system (a condition of getting Grayling's business), the relationship took off.
On time, every time
Within a couple of weeks, SmartTurn had completed planning, configuration, and deployment of the inventory and WMS system for both Prologistics and Grayling. The partners then brought Grayling's two largest suppliers into the loop at no cost to them, other than the time required for training.
Now, those suppliers are responsible for managing inventory; they can log into the system and see purchase order requirements as well as inventory in Prologistics' warehouse. Based on that information, they plan their production to ensure that the warehouse always has 90 days' worth of inventory on hand (the facility holds the material on a consignment basis). When the suppliers ship the consignment orders, they enter complete details directly into the system. Once the shipments arrive at the warehouse, Prologistics updates SmartTurn and holds the material until the assembly plant just across the border needs it. "When they request it, we pull out the orders for them," explains Luis Gijón, an operations agent for Prologistics. The 3PL updates the inventory status as soon as a trailer leaves the warehouse, so that the maquiladora and Grayling's headquarters both know exactly which items are en route.
That real-time information on exactly what is in the pipeline—and exactly where it is—has improved the cost and service picture for shipper, supplier, and 3PL alike. For example, Prologistics now can immediately respond to unanticipated situations. "If something is hot and [Grayling] needs it urgently ... as soon as it arrives, we put it in the system and they know immediately how many pallets and boxes, so they can do the customs paperwork right away," Gijón says. And there's no more searching through piles of papers when the customer has questions: "We can give them an answer in a couple of seconds," he reports. Prologistics also has been able to attract several new customers because it can use the software to manage their inventory at no additional cost to them.
From Rubio's perspective, one of the most important benefits of the new system is that materials needed in Juarez now arrive on a just-intime basis, yet the assembly line is never caught short. "The information is so accurate, we've been able to completely eliminate line stoppages. We have not had one this year," he says.
Rubio also reports that Grayling has been able to improve its cash flow. With the new software, he now has an accurate, up-to-the-minute view of exactly what was pulled and when—information that lets accounting determine the optimum time to pay suppliers.
Before the inventory and warehouse system was in place,Grayling paid its suppliers after weekly or monthly reports wended their way to accounts payable and were verified. Under the consignment arrangement with its top suppliers, the company pays only for what it pulls from the warehouse. "Now I have 90 days' inventory that's not on my books, plus an additional 45 days after it's pulled to pay, so I get 135 days before I have to pay," Rubio explains. What's in it for the suppliers? They can run 90 days' worth of products they custom manufacture for Grayling, rather than changing over production lines on short notice. That cut production costs so much that Grayling asked for—and got—price discounts, he notes.
For other suppliers, Grayling can now reconcile purchase orders and shipment bills of lading promptly, which allows it to take full advantage of early-payment discounts. This is no small matter: Before the system was in place, Grayling was missing out on about $40,000 a month in trade discounts, Rubio says. The manufacturer has also used the SmartTurn system to improve the timeliness and accuracy of its customs documentation for imports from Asia and Europe. These temporary imports are stored in bond in El Paso, and Grayling pays duties on them only when they reenter the United States as part of finished products. U.S. regulations set a limit of 180 days for the round trip; importers that miss the cutoff pay double duties. That's no longer a worry for Grayling, and the manufacturer can quickly produce audit-ready data if questions should arise.
Rubio is more than happy with the improvements the real-time system has produced for Grayling Industries, but he's equally pleased that his company's smallbusiness partners are sharing in the benefits. "Times are so tough," he says. "We wanted to know that we could reduce costs and make it a win-win for everyone."
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.