Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
Is it possible to help the environment just by watching television?
Maybe, if it's a set that's gained a new lease on life through the efforts of ModusLink PTS Aftermarket. The company, a subsidiary of Waltham, Mass.-based global supply chain management firm ModusLink Global Solutions Inc., takes ownership of television sets whose screens are so badly damaged that repairing them would be cost-prohibitive. The company removes circuit boards and other usable parts and transplants them into other defective sets that have intact screens. The rest of the original set is then broken down into glass, plastic, and metal and sent to recycling plants that meet the ISO 14001 international standards for environmental management.
The process not only extends the service life of hundreds of TVs, but also reduces the number of defective sets that end up being shipped to landfills, says Joe King, ModusLink's vice president, sales and marketing.
The ModusLink program is just a small part of a sea change taking place in the supply chain management world. For the first time, companies are getting serious about the environmental implications of their recycling efforts—and with good reason. The right program can yield greater efficiencies, improved profitability, and the goodwill that comes with being seen as a good corporate citizen. The wrong approach can lead to higher costs, reduced productivity, increased legal exposure, and a tarnished image that takes years to overcome.
There could be a significant payoff for doing recycling right. According to ABI Research, more than 100 million older phone handsets worldwide will be recycled for reuse by 2012, generating about $3 billion in revenue. In the United States, only 18 percent of the estimated 2.25 million tons of old electronic products—cell phones, TVs, and computer equipment—were recycled in 2007, the latest year for which data were available from the Environmental Protection Agency. The rest were disposed of, mostly in landfills, the EPA says.
By moving reusable parts into the recycling process at the proper time, companies can reclaim base metals and other components that can then be used for repair and refurbishment. This saves on the cost of buying new parts and is also good environmental practice, experts say. "Overall lower inventories decrease the impact of warehouse energy use and emissions, and bring back some value through reclamation of usable materials," consultants Kevin Steele and Emily Rodriguez wrote in an article that appeared in Reverse Logistics magazine in the summer of 2008.
ModusLink says it maintains a parts bank that customers can access to procure electronically refurbished boards. The idea, according to King, is to create an economic incentive to repair and refurbish rather than having to decide between buying new parts or disposing of the product altogether. King says the parts bank can help extend a product's service life by up to six months, which keeps product out of landfills during that period.
Stay in control
Many businesses are likely to find green recycling a foreign concept. In the past, companies often outsourced their recycling programs with little consideration of their environmental impact and with scant oversight of their vendors. However, as industry becomes more environmentally conscious, green considerations are moving front and center in recycling strategies. And while companies still rely heavily on third parties to manage their recycling, the global nature of inventory-reuse initiatives will likely mean the advent of tighter vendor controls.
Web networking giant Cisco Systems Inc. manages at least two tiers of audits, with Cisco auditing its suppliers, who, in turn, audit their vendors. In some instances, the audit is drilled down to a third level, with the supplier's supplier auditing its vendors. The increased vendor scrutiny is critical to ensuring Cisco's recycling procedures are being followed even when material ends up in emerging markets that may lack robust recycling solutions, says Bob Anderson, Cisco's global operations and value recovery manager, customer operations.
"Our largest challenge is closing the loop with second or third owners to help them take ownership of the process," Anderson says. To those who cannot, Cisco offers a "takeback" program, where it directly accepts returns and pays for their shipping. Anderson says the program has been successfully rolled out in Europe and is gaining popularity in the United States.
For Cisco and others, data control is paramount. "Our advice to companies is to outsource the process but keep control of the data," says Warren Sumner, general manager, enterprise software group for Take Supply Chain (formerly ClearOrbit Corp.), a company that develops software to optimize the handling of recyclables. "Your data are your eyes and ears. You can't outsource the process and the data."
Sumner says predicting product failures and forecasting parts needs can be difficult, as is determining whether products should be recycled for reuse or disposal. Many companies, by default, direct all products to a third-party service provider for handling. But that may not be the most cost-effective use of the inventory, says Sumner. Nor is it likely to be the greenest alternative, he says. As Sumner explains, the third-party route can lead to higher greenhouse gas emissions because it increases the potential for double handling of parts from the third party to a warehouse. Intuitive software programs can be invaluable in helping companies improve their forecasting and in painting an accurate picture of how goods should be disposed of, he adds.
Different strokes
Green recycling takes different forms. Furniture retailer Rooms To Go, whose recycling initiatives were reported in these pages late last year ("from trash to cash," November 2008), has expanded its program to cover most of its 100 stores as well as its distribution centers. John Zapata, the company's senior vice president of distribution, says employees at each store sort the recyclables and place them in an enclosed shed. There, they are picked up by one of the company's trucks and transported to the closest distribution center, where they are then added to the overall waste stream. As much as 98 percent of each store's refuse is recyclable, Zapata says.
Zapata says Rooms To Go has halved its stores' hauling expense by eliminating the need for trash containers and for once- or twice-weekly pickups by the municipal refuse companies in each city. In addition, Rooms To Go has cut by at least half the amount of trash its stores were dumping in landfills, and reduced carbon emissions by reducing unnecessary trash pickups, he says. The runs by Rooms To Go's own drivers are considered carbon-neutral, Zapata says, because the trucks have to make the trips between the stores and DCs anyway. The only capital expenditure was a $950 per-store cost for each metal shed, he says.
Then there's the tried-and-true strategy of appealing to the basic human desire for material possessions. Less-than-truckload carrier Averitt Express, which operates 100 terminals nationwide, held a three-month contest from November 2008 to January 2009 to reward employees whose terminals reduced their level of consumption of water, paper, motor fuel, and electricity over the same period a year ago. Employees from each terminal that met the objective were eligible to win a 2008 Mercedes-Benz hybrid vehicle, with the second prize being 10 gasoline gift cards each valued at $500.
And the results? Brad Brown, Averitt's marketing and communications leader, says, "Any investments we made in incentives were paid for many times over, not only in hard cost savings over the three-month program but also in increased awareness internally about the need to eliminate waste."
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!
Toyota Material Handling and its nationwide network of dealers showcased their commitment to improving their local communities during the company’s annual “Lift the Community Day.” Since 2021, Toyota associates have participated in an annual day-long philanthropic event held near Toyota’s Columbus, Indiana, headquarters. This year, the initiative expanded to include participation from Toyota’s dealers, increasing the impact on communities throughout the U.S. A total of 324 Toyota associates completed 2,300 hours of community service during this year’s event.
The PMMI Foundation, the charitable arm of PMMI, The Association for Packaging and Processing Technologies, awarded nearly $200,000 in scholarships to students pursuing careers in the packaging and processing industry. Each year, the PMMI Foundation provides academic scholarships to students studying packaging, food processing, and engineering to underscore its commitment to the future of the packaging and processing industry.
Truck leasing and fleet management services provider Fleet Advantage hosted its “Kids Around the Corner Foundation” back-to-school backpack drive in July. During the event, company associates assembled 200 backpacks filled with essential school supplies for high school-age students. The backpacks were then delivered to Henderson Behavioral Health’s Youth & Family Services location in Tamarac, Florida.
For the past seven years, third-party logistics service specialist ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.