Visibility system does double duty as ISF compliance aid
A decade ago, apparel maker Jones Group installed a visibility system to keep tabs on shipments. No one ever imagined the system would also become its solution to regulatory compliance.
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 The Jones Group (formerly Jones Apparel Group) installed a visibility system a decade ago, it had just one goal in mind—to get a better handle on its sprawling international supply chain. With suppliers scattered across the world, tracking orders and goods in transit had become a task of monumental proportions. "We needed to know the whereabouts of all our shipments," says Jodie Mendoza, the company's senior vice president of corporate logistics, "and trying to keep up with it on a manual basis was just impossible."
What the company could not have foreseen was that the same visibility system would become the linchpin of its regulatory compliance program. Not long after Jones Group started rolling out the system, the nation was rocked by the 9/11 terrorist attacks. That led the U.S. government to step up its cargo screening efforts, with the result that importers today face a host of new data collection requirements. Although it had to make minor adjustments to its operations, Jones Group has found compliance to be a breeze. Its visibility system provides all the data it needs to meet the new requirements and keep its merchandise flowing smoothly through the supply chain.
Coming into the country
Headquartered in Bristol, Pa., The Jones Group is a designer, marketer, and wholesaler of branded clothing, shoes, and accessories for women, men, and children. Its well-known brands include Anne Klein, Jones New York, Nine West, and Easy Spirit. The company reported about $3.3 billion in total revenue for 2009 from sales through specialty retail stores, outlets, and e-commerce sites.
Most of the company's merchandise is made overseas by contract manufacturers in Asia, the Middle East, and Africa (Kenya), and shipped to the United States by ocean. (Although Jones Group does use air freight on occasion, close to 95 percent of its products move via steamship.) While ocean has the advantage over air when it comes to cost, it also has a downside: lengthy and unpredictable transit times. That makes it difficult for importers like Jones Group to keep tabs on merchandise while it's in transit from the factory to North America.
About 10 years ago, those visibility problems came to a head, prompting the apparel company to take the software route. "At that time, we were having so many shipments that could drop in a black hole," says Mendoza. "So it was a top priority for us, because we needed to know when the goods were going to hit [U.S. shores], so we could pull out the correct goods to ship to our stores."
Today, all of the Jones Group divisions as well as their vendors and trading partners are connected to an online pOréal that serves as a repository for both product and shipping information. When an overseas factory is ready to ship merchandise to the United States, it pulls up the purchase order electronically and enters the packing list data into an online database (including such details as the style and color of each item in a carton). The freight forwarder or NVOCC (non-vessel operating common carrier) that picks up the shipment then adds further details, like the name of the ocean carrier, to the database. The process continues all the way down the line.
All of the information provided by Jones Group's supply chain partners—vendors, ocean and air carriers, freight forwarders, NVOCCs, customs brokers, domestic consolidators, and so forth—is held in a common database. Although these partners all have rights to enter data into the system, Jones Group strictly controls who has access to what information. "We share this information with the different partners based on whether they have a need to know," says Mendoza. "For example, the freight forwarders will only see what they need to see."
All told, it took nearly a decade to get all of Jones Group's suppliers up and running on the visibility system. But the company considers it time well spent. Among other benefits, the system gives Jones Group and its partners visibility into the contents of incoming containers, which enables them to decide in advance how they'll route the products once they arrive in North America.
More importantly, the visibility system notifies Jones Group when things aren't going to plan. For example, if a factory runs late with production of an order and misses a scheduled ocean sailing, the system alerts Jones Group to the problem so it can find an alternate way to move the goods. "When things are not in the time frame they should be, we're not out chasing the information. We can concentrate on errors," says Mendoza. "When you're controlling so many partners, this happens."
Meeting the 10+2 challenge
Although it was originally implemented as a shipment tracking tool, the visibility system now plays a central role in Jones Group's regulatory compliance program as well. In January, U.S. Customs and Border Protection (CBP) began enforcing its Importer Security Filing (ISF) rule. The ISF rule is intended to help CBP learn more about imports and their origins, intermediate stops, and destinations in order to target high-risk shipments for further inspection; it is more popularly known as "10+2" (a name derived from the number of data elements importers and ocean carriers must provide to CBP).
In order to comply with the ISF rule, importers must submit 10 specific pieces of information to CBP before a container arrives at a U.S. port. The required information includes the names of the supplier, seller, and buyer; the container's stuffing location and country of origin; and the commodity's Harmonized Tariff Schedule number, among other things.
Since Jones Group brings in 18,000 to 20,000 shipments a year, of which 12,000 to 14,000 are ocean containers, this reporting requirement has the potential to be a headache and a half. But with the visibility system in place, filing is a snap, Mendoza says. "Now, because everything is sitting in one database, we have the opportunity to use this information to do all the security filings we need."
Mendoza says the visibility system has become "absolutely critical" to her company's 10+2 compliance efforts. And it's not just because the system allows the company to process huge volumes of information swiftly, she says. It's also because the setup assures data accuracy.
"If you control the base of information, like the purchase order, the style numbers [you eliminate the risk of] misspellings and other inaccuracies in the security filings submitted to Customs," she explains. That helps assure the quick acceptance of a filing, which allows imports to be cleared in a timely fashion, she adds.
Mendoza is as surprised as anyone about the way things have worked out. The company's sole purpose in implementing the visibility system was to keep tabs on shipments, she says. The discovery that the system could also streamline ISF compliance was welcome—though wholly unexpected. "When we did this 10 years ago," she says, "nobody had this in mind."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
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.