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.
So what if your supply chain organization doesn't include everything that some others do? Is that such a big deal? Haven't your intrepid authors often said that the supply chain organizational structure is a flexible concept, dependent on many variables?
Guilty as charged, with an explanation. When it comes to traditional lines and boxes on an org chart, much does depend on culture, global footprint, divisional P&L accountability, and other non-trivial factors. When it comes to functional inclusion, that's a different story—particularly as our vision of scope, scale, and inclusion in the supply chain continues to evolve.
THOSE WHO CANNOT REMEMBER HISTORY ...
Back in the day (when so many of our respected pioneers started), traffic management and transportation were everything. Warehousing (in today's parlance, distribution) was something different, involving somnolent managers and associates with strong backs and weak minds. If traffic managers were nobility, purchasing agents were princes, neither to be trifled with nor disrespected in any way. They received far more swag at holiday time than anyone in the evolving logistics universe.
Logistics elevated traffic and transportation into a comprehensive view of how boxes would get from Point A to Point B, and the burgeoning field deigned to encompass storage (warehousing) and some level of filling orders as part of the new world order. Meanwhile, the purchasing agents were evolving from Four Roses to Jack Daniel's as a minimum expectation.
The emerging supply chain point of view began to integrate the independent functions we had traditionally dealt with, and introduced disciplines and internal relationships that developed holistic plans and collaborative accountabilities for continually improving execution in storage, movement, and customer satisfaction.
THE REBELS
So far, so good. But a handful of freaks wanted to go further. They, correctly as it turned out, thought that manufacturing ought to learn how to dance to the same beat as everyone else involved in the process of getting goods to customers. Guess what? Wherever the goofy notion was seriously tested, it worked.
The really aggressive pioneers began to insert, include, and integrate purchasing functions into the end-to-end supply chain. That was an enlightened first step. But there were complications.While all this was going on, and actually earlier, the buyers and purchasing agents had been elevating their game. They had seen the strategic implications of changing models. The idea that the "finding" of materials and sources, and of building relationships with suppliers was even more important than the "getting" of goods at whatever price a supplier was grudgingly willing to sell for, gained traction. The profession became significantly more professional.
But, regrettably, they also began to see themselves as the drivers of the supply chain, value chain, demand chain—whatever you want to call it—bus. Their world view had the supply chain beginning with them. They offered certification and spoke of supply management.
In our view, sourcing and procurement are vital—and integrated—components of a real supply chain, and the chain begins with customers and demand. And we see no benefit to having procurement as another oar in the water that needs independent communications and collaboration, when it ought to be part and parcel of one corporate entity that already speaks with one voice.
This thinking was mysterious in days of old. But a few brave souls tried to put procurement and the supply chain together, too often by making supply chain functions report to the procurement vice president. This move baffled nearly everyone, most seriously the VP who suddenly owned the distribution network. We remember with great fondness the $25 billion client that decided to fold a supply chain project into its strategic sourcing initiative. There were consultants hanging from every tree until the program's champion realized that they had, in his words, put the horse behind the cart and then expected the horse to do all the pushing.
As time passed, though, more and more procurement structures got, correctly, folded into supply chain groups. So much so that we were recently taken aback by an article in one of the other trade publications that suggested that supply chain and procurement needed to really work on improved communications and elevated collaboration, as if they lived in separate regions of Middle Earth.
So, for those who have not yet put a tentative toe in the waters of the 21st century, let's simplify. It borders on lunacy to keep these natural colleagues separated. Face it. You can't hope to manage inventories effectively without daily interaction with procurement. You'll never have what you need when and where you need it (and not before) without teaming up with procurement. Independent planning and execution will nearly guarantee dissatisfied internal customers and disappointed external customers. You won't be able to please sales and marketing, and meet marketplace demands unless you are all together in the bass boat.
NEARING THE END OF THE TRAIL
As much as we favor full inclusion and integration of sourcing and procurement activities in the holistic supply chain organization, we're beginning to wonder if there is more here than simply getting all the right players into the tent. Once everyone has found the secret of meshing product and materials acquisition into end-to-end planning and execution, what will be left?
Is this merely a matter of fulfilling an advanced vision of the role of supply chain management in the enterprise? Or do we stand before the open door of a new structural paradigm to carry us through this century? Is supply chain management slowly and certainly replacing operations management in the corporate pantheon?
HOW CAN YOU BE SERIOUS?!?!
We might be premature in advancing this concept. We could be wrong. But the trend is difficult to ignore, the logic is straightforward, and positive evidence is emerging. Not to mention that the manufacturing and operations-dominated model: 1) has served well, but for a very long time, and 2) tends to contain concepts and philosophies that don't square well with new century practices, especially in employee and business relationships.
We have seen the concept in operation—and succeeding—as early as 20 years ago. And there seems to be overwhelming consensus that supply chain management is the natural facilitator of corporate sales and operations planning efforts, with enormous impacts on manufacturing, sourcing and procurement, financial performance, and all of the traditional supply chain, logistics, and distribution functions.
Some might see this as a power grab by a newly energized and empowered supply chain community. It would not be the first such accusation.
But the argument is compelling. Last-generation operations management was a command-and-control structure (or derived from one). It was a collection of functions, each with challenging performance targets and function-centric metrics. From an integrated supply chain perspective, the individual functions could each be successful by their own lights, with performance bonuses all 'round, while overall enterprise performance was sub-par.
In an advanced supply chain organization, the leader is a coach, facilitator, and talent developer. Metrics are aligned around corporatewide objectives. Functions collaborate, and diverse teams work on projects with sustainable continuous improvement. Activities throughout the supply chain are: 1) planned, 2) integrated, 3) synchronized, and 4) externally focused. It doesn't seem to us that the new model leaves any room for internal strife or disconnected initiatives. Nor can it tolerate extensive interfacing among disparate functions; the pieces must be components of a seamless operating structure.
Maybe, just maybe, the time for widespread adoption of the holistic supply chain model for all operational functions, including manufacturing, has come.
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.