Art van Bodegraven was, among other roles, chief design officer for the DES Leadership Academy. He passed away on June 18, 2017. He will be greatly missed.
For decades, a staple of cartoons has been a scraggly, bearded, besandaled zealot in shabby robes, bearing a placard proclaiming "The End Is Near!" But lately we've started to wonder if the bus backed up to the commune and emptied it of would–be Jeremiahs, given how often and how insistently The End has been announced as the wreckage of the global financial crisis is examined. We even briefly considered opening a sandal repair shop to help make ends meet.
We're here to make a proclamation of our own. The End Is, in fact, Near. But not the one the full-time alarmists would have you believe.
It's the end of the recession that's coming, and we need to figure out how to prepare for what our friend Rick Blasgen, CEO of the Council of Supply Chain Management Professionals, has called the "post-recession rally." We believe that what we do to gear up for the turnaround is far more important than what we've done to try to survive the recession. Truth be told, how we've handled the tough times sets the stage for how successful we'll be in the post-recession period.
Leadership in times of crisis
We are distressingly willing to indulge in knee-jerk reactions to challenging events, even to the detriment of future success. Maybe this is raw, fundamental human nature. Research has shown that human beings respond to acute stress in one of two ways: the first is to run like mad away from the stress; the second is to fight like crazy.
In business, these translate to: 1) hunkering down, hoarding cash, furloughing people, delaying or can-celing new projects, restricting travel, and cutting out training and other organizational development activities; and 2) seizing the opportunities others are afraid to go after, reinventing and repositioning organizations, and adapting to a new world view.
Curiously, the former approach seems to be favored by leaders with some financial background. You know, the ones who struggle to understand the difference between headcount and human beings.
As for how this typically plays out in the business world, the traditional mega-corporations are big on flight, particularly when the burden will fall largely on a put-upon workforce. It's the entrepreneurs who are more likely to respond with reinvention, risk-taking, and new approaches.
When to start?
When should you begin preparing for the rally? It depends a little on the shape of the recovery. Recoveries come in three types: One is V-shaped, the quick, steep rebound. Another is U-shaped, with a gradual bottoming, followed by a gradual rising, followed by a sharp upturn to previous highs. The third is pie pan or bathtub-shaped, with a long, long, flat bottom before the turnaround begins. Whether the new highs are as dazzling as those previously attained is a matter of considerable debate, and there is a wealth of uninformed speculation re-garding the "new normal."
If the recovery is V-shaped, you're too late to embark on a remedial course; you should have been doing the right things all along. If the recovery is U-shaped, you may or may not be too late, because the recovery will come fast when it hits. If it's pie pan-shaped, you might have a little time, but there's still no substitute for hav-ing chosen fight over flight at the outset. Your more inventive and nimble competitors may have made good use of the long flat spell to perfect their tactics.
Of course, if we hit a double-dip recession with another downturn, there'll be, unfortunately, ample time to get ready for the "real" uptick. That's no reason to wait and see; the time to do the right things is still now.
Will this cost money?
As for what steps companies should take to prepare for recovery, the magic word is investment. When others are pulling in their horns, tomorrow's winners are investing. Specifically, they're investing in the following three areas:
Infrastructure. This is the time to get equipment and technology that was too difficult to cost-justify when the financial buggy was careening out of control—particularly if you can get it for pennies on the dollar. Part of spending wisely is picking the right time and place, and a recession can be the right time.
People. This is the time to train—and cross-train—and educate, so that your people are better than their people when the crisis is over. Better in competitive situations and better at building a winning team. It's the time to recruit, to get some winners on the string while they're uncertain about their futures and their current employers are treating them like dirt. When the pressure is off, you'll have "A" players in your lineup, and the competition will be scrambling to rope in some of the leftovers.
Customers. Spend time—not necessarily dollars—educating your customers and helping them solve their operating problems. This isn't about making sales calls; it's about building stronger relationships for the long haul.
Bottom line(s)
It should be clear by now that when the rally strikes, those who haven't prepared are really going to be struggling, because they won't be ready. Not ready with infrastructure, not ready with people, and not ready with customer relationships. They will have found a way to do poorly in bad times and to do equally poorly in good times.
That's not to say companies shouldn't be prudent during difficult times—or at any time. But if all the management energy goes into destructive activities and none into building for the future, the cause is in jeopardy. We strongly urge that two-thirds of management attention be devoted to preparing for the future, and one-third to day-to-day business realities. And that balance needs to be struck at the very outset of tough times, not plugged in as an afterthought when a bright new business day is dawning.
These have been—and are—trying times. But they're also excellent times to be in business. We will learn more about ourselves and about the resilience of our associates than we might have imagined during the boom years. And we will prosper in the future because we have already stood up to the challenge, wrestled it to the ground, and replaced failed models with new products, new services, new structures, new customer relationships, and newly invigorated and committed associates. Our bold, decisive actions during the bad times will have defined the future in which we will succeed. Even if the mainstay of the new product/service line is the sale and repair of sandals.
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.