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.
This is not about—surprise, surprise—a one-horse open sleigh. It is about being able to show how good, or not-so-good, you have been in your supply chain operations. Dashboarding, it seems, has become a four-season adventure.
Many, many organizations use "dashboards" to show how they are doing. Publication might be daily, week-ly, or monthly, with monthly being the most frequently used at high levels, and daily being used to give rapid feedback on high-velocity volume movement, among other applications. Sometimes, daily visuals are posted as indicators of performance of lower-volume, but higher-cost-impact operations, and/or to provide recurring stimuli for performance motivation.
In theory, dashboards provide mission-critical information about factors that are core drivers of organiza-tional performance. In practice, they are overloaded with trivia, abused in their motivational role, and simply too much for anyone—CEOs or order pickers—to process and internalize.
THE USUAL SUSPECTS
Who has led us to a state in which a perfectly good idea has been rendered less-than-useful, and even mis-leading? We nominate an unholy alliance between accountants and engineers. It's not because they are bad people; they are often just wired differently from doers and decision-makers. They can get a little compulsive about filling in all the blanks or every cell in a logical matrix, no matter the relevance or the potential usefulness.
It is far better, for example, to know at a glance that inventory turns are approximately "x" than it is to be overwhelmed with half a dozen different turn performance indicators for six categories of inventory. It is useful to see that a weighted average productivity value is "y" instead of having to sort out individual productivity numbers for a couple dozen specific tasks.
We will grant that being able to examine the next level of detail can be important when the singular metric begins to get out of whack, but it is the clarity and simplicity of the singular measure that triggers an investiga-tion into specific problem (or success) categories. And scanning a laundry list of lower-level "dashboard" data is likely to receive less attention than a highly visible single indicator of a key driver of business success.
TO ILLUSTRATE THE CASE
The classic, even trite, analogy is comparing performance dashboards with automobile dashboards. Think about it. There are only a few things you really need to know about how the car is doing. And these are even fewer today than they were two or three decades ago. So, the speedometer, the gas gauge, and tire pressure indi-cators are vital. Warnings about engine temperature, oil pressure, and diverse on-board computer problems show up when a "check engine" light goes on.
The tachometer is only important if you are driving your Chevy Aveo four-banger around the track at Dayto-na, but the marketing team loves the concept. Still, there is no reason on earth to make the auto dashboard as complex as a 747's cockpit.
Yet we try, and the information available in contemporary information systems gives us plenty of trivia to drool over. Our Dutch colleague once developed a warehouse performance reporting system that presented pages of "dashboard" dials. The idea was attractive, in that the icons were all little dials with red, yellow, and green segments based on performance history, targets, or imperatives, as the case might be. Each of the dozens of "key" indicators could be clicked on to reveal another level of detail. An analyst's dream, as in this case, can become a manager's nightmare.
So, developers of effective dashboards need to spend a lot of front-end time in deciding which are the right balls to be watching and which need to be let go for another day.
WATCHING THE BALLS THE RIGHT WAY
Some analysts, less inclined to focus on every little nit, maintain that longer-term and aggregate metrics are more indicative of what is really going on over time. We will cheerfully admit that it is easier to look at a chart of rolling 12-month trailing data to get a clear picture of the aggregate effects of past events. Certainly, it's much easier than trying to interpret a chart of specific data points over time, with wild fluctuations and unex-plained dips, and snuffles and sneezes.
But the argument misses the point. Dashboards are not intended to be examined in their totality over numerous discrete time periods. They are designed to illustrate what's happening now and to stimulate improvement, corrective action, and deeper probes into those performance elements that are deviating from expectation (in any direction).
Looking at the easy-on-the-eyes 12-month aggregation chart may allow a smashing post mortem of a specific issue. It was, for example, relatively easy to reconstruct what happened with the Titanic once it had sunk to the ocean floor.
So, no matter what format a time-series analysis might take, the intervention of response to a timely dash-board reading is critical to remedying situations before the ship goes down.
WHAT SHOULD BE ON A DASHBOARD?
The consulting answer—it depends. It depends on whether you are in transportation or distribution. It de-pends on your organization's mission—and what factors define success. It depends on what your customers value. And the style and preferences of your top management.
That will almost surely mean that there are different dashboards for different areas, and that's OK. For example, in a distribution center, you might be tempted to make on-time shipments a metric. But your customers probably don't care. They are only concerned about on-time arrivals, and that might be a better dash-board element for the transportation (or 3PL) function.
Then, there is the issue of how to integrate dashboards into a cohesive enterprisewide view, and these are tricky waters. The next greatest failing after providing too many dashboards is hammering people for improve-ment in metrics that they cannot directly affect.
But it is fair to do two things: show all associates the dashboards that indicate how the company is perform-ing—as informational items only, and teach all associates how their local dashboards contribute to the enter-prise whole.
By the way, our preferred icon is a dial, rather than, for example, a thermometer. There does need to be room to show regression as well as progress. The use of color-coding to indicate success, failure, and a danger zone is usually very effective. Nearly everyone in this Western culture knows what a dial looks like and what it indi-cates, and relates to the usual left-to-right progression of improvement.
That gets us down to the question of how many. Again, it depends. A case **ital{might} be made for as many as six. No more. And a mission-critical three would be a worthwhile target. A major apparel retailer's Western distribution center had fabulous success with a three-dial dashboard that was the first thing every asso-ciate saw when arriving for work. It focused on volume productivity, quality (error rates), and the HR element of associate retention.
OUR TAKE
Find the balance, the critical few, the keys that relate directly to individual units and that people can interpret and relate to. Figure out how to integrate local dashboards and metrics into a more cosmic enterprise view. Use visible results to motivate continuous improvement. Keep it real. Find out who's been naughty or nice. And let it snow, rain, or whatever.
Jeremy Van Puffelen grew up in a family-owned contract warehousing business and is now president of that firm, Prism Logistics. As a third-party logistics service provider (3PL), Prism operates a network of more than 2 million square feet of warehouse space in Northern California, serving clients in the consumer packaged goods (CPG), food and beverage, retail, and manufacturing sectors.
During his 21 years working at the family firm, Van Puffelen has taken on many of the jobs that are part of running a warehousing business, including custodial functions, operations, facilities management, business development, customer service, executive leadership, and team building. Since 2021, he has also served on the board of directors of the International Warehouse Logistics Association (IWLA), a trade organization for contract warehousing and logistics service providers.
Q: How would you describe the current state of the contract warehouse industry?
A: I think the current state of the industry is strong. For those that have been focused on building good client relationships over the years, I think it’s a really exciting time. Coming out of all the challenges of the past few years, I think there’s a lot of opportunity for growth and deeper partnerships. It’s fun to see the automation and AI (artificial intelligence) integration starting to evolve [in a way that’s] similar to what we saw with WMS (warehouse management systems) in the early 2000s.
Q: You are now president of your family firm. Is it an advantage having grown up in the business as opposed to working elsewhere?
A: I definitely believe it was an advantage growing up in the business. Whether it’s working with family or someone else in the industry, there’s always an advantage when you have mentors[to guide] you. I’ve been blessed to have several mentors, some in the industry, others just in life, and I’m thankful that they were willing to mentor me and that I was willing to listen to them.
Q: What are the biggest challenges currently facing 3PLs, and how are you addressing them?
A: Labor and legislation are both tough right now. The two seem to have a lot to do with each other, and it can make it tough to find and retain people. So I think we’ll see more and more automation of processes industrywide.
Q: Third-party service providers often must handle a wide variety of products for a lot of different clients. Does this variety make it difficult to invest in automation and other new technologies?
A: It can make things more difficult when looking at certain automation, but it’s in the “difficult” that a lot of opportunities lie. It would be tough to find a single solution that fits every client’s needs, but there are always opportunities to improve in certain areas. It just takes a bit of vision and commitment, and a willingness to invest in your own long-term success.
Q: As a 3PL, what do you look for when selecting the clients you work with?
A: Quality relationships that will last a long time. When both parties are happy and working together in the same direction, everyone wins.
Q: You’ve been a board member of the International Warehouse Logistics Association since 2021. Why is your involvement with this organization important to you?
A: I think it’s important to understand what’s happening in the industry. IWLA is a great resource for staying up to date and getting a solid education when it comes to the latest logistics trends. I also think it’s important to give back and pass along what we’ve learned to those just getting started in the business. As important as it is to have a mentor, it’s just as important to mentor and help others.
“While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value,” NRF Chief Economist Jack Kleinhenz said in a release. “September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season.”
The Census Bureau said overall retail sales in September were up 0.4% seasonally adjusted month over month and up 1.7% unadjusted year over year. That compared with increases of 0.1% month over month and 2.2% year over year in August.
Likewise, September’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.7% seasonally adjusted month over month and up 2.4% unadjusted year over year. NRF is now forecasting that 2024 holiday sales will increase between 2.5% and 3.5% over the same time last year.
Despite those upward trends, consumer resilience isn’t a free pass for retailers to underinvest in their stores by overlooking labor, customer experience tech, or digital transformation, several analysts warned.
"The 2024 holiday season offers more ‘normalcy’ for retailers with inflation cooling. Still, there is no doubt that consumers continue to seek value. Promotions in general will play a larger role in the 2024 holiday season. Retailers are dealing with shrinking shopper loyalties, a larger number of competitors across more channels – and, of course, a more dynamic landscape where prices are shifting more frequently to win over consumers who are looking for great deals,” Matt Pavich, senior director of strategy & innovation at pricing optimization solutions provider Revionics, said in an email.
Nikki Baird, VP of strategy & product at retail technology company Aptos, likewise said that retailers need to keep their focus on improving their value proposition and customer experience. “Retailers aren’t just competing with other retailers when it comes to consumers’ discretionary spending. If consumers feel like the shopping experience isn’t worth their time and effort, they are going to spend their money elsewhere. A trip to Italy, a dinner out, catching the latest Blake Lively and Ryan Reynolds films — there is no shortage of ways that consumers can spend their discretionary dollars,” she said.
Editor's note:This article was revised on October 18 to correct the attribution for a quote to Matt Pavich instead of Nikki Baird.
The market for environmentally friendly logistics services is expected to grow by nearly 8% between now and 2033, reaching a value of $2.8 billion, according to research from Custom Market Insights (CMI), released earlier this year.
The “green logistics services market” encompasses environmentally sustainable logistics practices aimed at reducing carbon emissions, minimizing waste, and improving energy efficiency throughout the supply chain, according to CMI. The market involves the use of eco-friendly transportation methods—such as electric and hybrid vehicles—as well as renewable energy-powered warehouses, and advanced technologies such as the Internet of Things (IoT) and artificial intelligence (AI) for optimizing logistics operations.
“Key components include transportation, warehousing, freight management, and supply chain solutions designed to meet regulatory standards and consumer demand for sustainability,” according to the report. “The market is driven by corporate social responsibility, technological advancements, and the increasing emphasis on achieving carbon neutrality in logistics operations.”
Major industry players include DHL Supply Chain, UPS, FedEx Corp., CEVA Logistics, XPO Logistics, Inc., and others focused on developing more sustainable logistics operations, according to the report.
The research measures the current market value of green logistics services at $1.4 billion, which is projected to rise at a compound annual growth rate (CAGR) of 7.8% through 2033.
The report highlights six underlying factors driving growth:
Regulatory Compliance: Governments worldwide are enforcing stricter environmental regulations, compelling companies to adopt green logistics practices to reduce carbon emissions and meet legal requirements.
Technological Advancements: Innovations in technology, such as IoT, AI, and blockchain, enhance the efficiency and sustainability of logistics operations. These technologies enable better tracking, optimization, and reduced energy consumption.
Consumer Demand for Sustainability: Increasing consumer awareness and preference for eco-friendly products drive companies to implement green logistics to align with market expectations and enhance their brand image.
Corporate Social Responsibility (CSR): Companies are prioritizing sustainability in their CSR strategies, leading to investments in green logistics solutions to reduce environmental impact and fulfill stakeholder expectations.
Expansion into Emerging Markets: There is significant potential for growth in emerging markets where the adoption of green logistics practices is still developing. Companies can capitalize on this by introducing sustainable solutions and technologies.
Development of Renewable Energy Solutions: Investing in renewable energy sources, such as solar-powered warehouses and electric vehicle fleets, presents an opportunity for companies to reduce operational costs and enhance sustainability, driving further market growth.
A real-time business is one that uses trusted, real-time data to enable people and systems to make real-time decisions, Peter Weill, the chairman of MIT’s Center for Information Systems Research (CISR), said at the “IFS Unleashed” show in Orlando.
By adopting that strategy, they gain three major capabilities, he said in a session titled “Becoming a Real-Time Business: Unlocking the Transformative Power of Digital, Data, and AI.” They are:
business model agility without needing a change management program to implement it
seamless digital customer journeys via self-service, automated, or assisted multi-product, multichannel experiences
thoughtful employee experiences enabled by technology empowered teams
And according to Weill, MIT’s studies show that adopting that real-time data stance is not restricted just to digital or tech-native businesses. Rather, it can produce successful results for companies in any sector that are able to apply the approach better than their immediate competitors.
“ExxonMobil is uniquely placed to understand the biggest opportunities in improving energy supply chains, from more accurate sales and operations planning, increased agility in field operations, effective management of enormous transportation networks and adapting quickly to complex regulatory environments,” John Sicard, Kinaxis CEO, said in a release.
Specifically, Kinaxis and ExxonMobil said they will focus on a supply and demand planning solution for the complicated fuel commodities market which has no industry-wide standard and which relies heavily on spreadsheets and other manual methods. The solution will enable integrated refinery-to-customer planning with timely data for the most accurate supply/demand planning, balancing and signaling.
The benefits of that approach could include automated data visibility, improved inventory management and terminal replenishment, and enhanced supply scenario planning that are expected to enable arbitrage opportunities and decrease supply costs.
And in the chemicals and lubricants space, the companies are developing an advanced planning solution that provides manufacturing and logistics constraints management coupled with scenario modelling and evaluation.
“Last year, we brought together all ExxonMobil supply chain activities and expertise into one centralized organization, creating one of the largest supply chain operations in the world, and through this identified critical solution gaps to enable our businesses to capture additional value,” said Staale Gjervik, supply chain president, ExxonMobil Global Services Company. “Collaborating with Kinaxis, a leading supply chain technology provider, is instrumental in providing solutions for a large and complex business like ours.”