In our continuing series of discussions with top supply-chain company executives, JJ Phelan discusses the benefits of working with an integrator and management lessons he learned while serving his country.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
JJ Phelan is vice president system sales with S&H Systems, a material handling systems design and integration company.Phelan has been in the material handling industry for more than 17 years. Prior to joining S&H, he worked with Amazon’s North American Core Fulfillment team as a program/project manager and served as chief operating officer and president of material handling systems integrator TriFactor. He also spent nine years as an officer in the U.S. Navy.
Phelan is a graduate of the U.S. Naval Academy with a bachelor’s degree in systems engineering. He also holds a master’s degree in electrical engineering from the Naval Postgraduate School and an MBA from the University of South Florida.
Q: What do you see as the current state of the material handling industry?
A: The material handling industry is on the cusp of a significant breakthrough. Even today, we are witnessing creativity in combining fixed conveyance and sortation equipment with newer technologies—such as autonomous mobile robots (AMRs) and goods-to-person (GTP) solutions.
Investing in material handling systems has always been justified by the reduction of inefficiencies and waste within warehouses or fulfillment centers. Typically, that’s been non-value activities like associates traveling to or from storage locations to carry out their picking or replenishing tasks. Now that AMR and GTP technologies are becoming more mature and reliable, material handling engineers have options to develop unique solutions that reduce inefficiencies and increase throughput with minimal human interaction or wasted travel and search time. As an engineer, I’m excited to be a part of this evolution in technology, which should result in clients’ meeting growth and success goals sooner.
Q: What are the advantages of using a design and integration company to deploy new material handling systems?
A: Our primary advantage as an integrator—especially one that represents multiple solution providers—is that we can focus on the best technology for a given application instead of forcing a specific manufacturer’s equipment onto an operation where it might not be in the customer’s best interest. Having a broad spectrum of best-of-breed application choices also allows us to incorporate options that provide the most cost-effective solution and/or the shortest leadtimes. In every case, integrators offer customers flexibility and scalability—a competitive advantage in today’s consumer-driven environment.
Q: What did you learn as a Navy officer and an engineer that you apply to your current role in system sales?
A: My time in the Navy had a couple of phases. Initially upon commissioning from [the U.S. Naval Academy in] Annapolis, I was a surface warfare officer, served on a destroyer, and was deployed to the Persian Gulf. I was fortunate enough to be in the engineering plant and lead sailors who kept the ship running, which was right up my alley. After that, I was selected to join a very small all-officer community called “engineering duty officers.” I went to grad school and earned an MS in electrical engineering and then went back in the fleet as a project manager for ship overhauls and modernizations.
Having opportunities early in my professional career that included leadership, process management, and technical problem-solving helped groom me as an engineer in the material handling industry—dealing with multiple stakeholders, managing expectations, and creating value every day.
Q: What is the most significant change you have seen during your time in the industry?
A: I’ve been in the industry since 2004, and to me, the most significant change was when Amazon acquired [warehouse robot developer] Kiva Systems in 2012. Not many companies were willing to take that leap of faith. Yet Amazon made that solution successful and continues to use it at its Amazon Robotics Sortable Fulfillment Centers as well as other types of facilities in its network. As a result, there have been multiple companies that have developed their own version of an autonomous mobile robot, each with its own unique benefits and value proposition. Today, these solutions have been widely adopted by the industry.
Q: How has the growth of online shopping changed distribution?
A: The ability to “swipe and tap” on your phone and have a single item delivered tomorrow, or maybe even today, has caused our industry to go from boring to exciting almost overnight. Today, supply chain is being taught in business and engineering schools in most colleges and universities. Material handling used to be pallet racking and forklifts. Now, it is robotic piece picking, automated packing, hands-free labeling, high-speed sorting, and so many other technologies and applications. Our industry has moved to becoming both creative and technical—using multiple technical skills, such as data analysis, software engineering, electrical and controls engineering, mechanical engineering, and structural engineering.
Q: You give a lot back to your community through volunteer work. Why is this important to you?
A: Well, it’s a little selfish in a sense. Volunteering and sacrificing for others makes me feel good. I’m a happier human when I can use whatever gifts I have for the benefit of others.
Economic activity in the logistics industry continued its expansion streak in October, growing for the 11th straight month and reaching its highest level in two years, according to the most recent Logistics Managers’ Index report (LMI), released this week.
The LMI registered 58.9, up from 58.6 in September, and continued a run of moderate growth that began late in 2023. The LMI is a monthly measure of business activity across warehousing and transportation markets. A reading above 50 indicates expansion, and a reading below 50 indicates contraction.
October’s reading showed the fastest rate of expansion in the overall index since September of 2022, when the index hit 61.4. The results show that the industry is continuing its steady recovery from the volatility and sluggish freight market conditions that plagued the sector just after the Covid-19 pandemic, according to the LMI researchers.
“The big takeaway is that we’re continuing the slow, steady recovery,” said LMI researcher Zac Rogers, associate professor of supply chain management at Colorado State University. “I think, ultimately, it’s better to have the slow and steady recovery because it is more sustainable.”
All eight of the LMI’s indices grew during the month, with the Transportation Prices index showing the most growth, at nearly 6 points higher than September, reflecting increased activity across transportation markets. Transportation capacity expanded slightly during the month, remaining just above the 50-point threshold. Rogers said more capacity will enter the market if prices continue to rise, citing idle capacity across the market due to overbuilding during the pandemic years.
“Normally we don’t have this much slack in the market,” he said. “We overbuilt in 2021, so there’s more slack available to soak up this additional demand.”
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
The port worker strike that began yesterday on Canada’s west coast could cost that country $765 million a day in lost trade, according to the ALPS Marine analysis by Russell Group, a British data and analytics company.
Specifically, the labor strike at the ports of Vancouver, Prince Rupert, and Fraser-Surrey will hurt the commodities of furniture, metal products, meat products, aluminum, and clothing. But since the strike action is focused on stopping containers and general cargo, it will not slow operations in grain vessels or cruise ships, the firm said.
“The Canadian port strike is a microcosm of many of the issues that are impacting Western economies today; protection against automation, better work-life balance, and a cost-of-living crisis,” Russell Group Managing Director Suki Basi said in a release. “Taken together, these pressures are creating a cocktail of connected risk for countries, business, individuals and entire sectors such as marine insurance, which help to mitigate cargo exposures.”
The strike is also sending ripples through neighboring U.S. ports, which are hustling to absorb the diverted cargo, according to David Kamran, assistant vice president for Moody’s Ratings.
“The recurrence of strikes at Canadian seaports is positive for U.S. ports that may gain cargo throughput, depending on the strike duration,” Kamran said in a statement. “The current dispute at Vancouver is another example of the resistance of port unions to automation and the social risk involved with implementing these technologies. Persistent disruption in Canadian port access would strengthen the competitive position of US West Coast ports over the medium-term, as shippers seek to diversify cargo away from unreliable gateways.”
The strike is also affected rail movements, according to ocean cargo carrier Maersk. CN has stopped all international intermodal shipments bound for the west coast ports of Prince Rupert, Robbank, Centerm, Vanterm, and Fraser Surrey Docks. And CPKC has stopped acceptance of all export loads and pre-billed empties destined for Vancouver ports.
Connected with the turmoil, Maersk has suspended its import and export carrier demurrage and detention clock for most affected operations. The ultimate duration of the strike is unknown, but the situation is “rapidly evolving” as talks continue between the Longshore Workers Union (ILWU 514) and the British Columbia Maritime Employers Association (BCMEA), Maersk said.
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."
In addition to its flagship Clorox bleach product, Oakland, California-based Clorox manages a diverse catalog of brands including Hidden Valley Ranch, Glad, Pine-Sol, Burt’s Bees, Kingsford, Scoop Away, Fresh Step, 409, Brita, Liquid Plumr, and Tilex.
British carbon emissions reduction platform provider M2030 is designed to help suppliers measure, manage and reduce carbon emissions. The new partnership aims to advance decarbonization throughout Clorox's value chain through the collection of emissions data, jointly identified and defined actions for reduction and continuous upskilling.
The program, which will record key figures on energy, will be gradually rolled out to several suppliers of the company's strategic raw materials and packaging, which collectively represents more than half of Clorox's scope 3 emissions.
M2030 enables suppliers to regularly track and share their progress with other customers using the M2030 platform. Suppliers will also be able to export relevant compatible data for submission to the Carbon Disclosure Project (CDP), a global disclosure system to manage environmental data.
"As part of Clorox's efforts to foster a cleaner world, we have a responsibility to ensure our suppliers are equipped with the capabilities necessary for forging their own sustainability journeys," said Niki King, Chief Sustainability Officer at The Clorox Company. "Climate action is a complex endeavor that requires companies to engage all parts of their supply chain in order to meaningfully reduce their environmental impact."
Supply chain risk analytics company Everstream Analytics has launched a product that can quantify the impact of leading climate indicators and project how identified risk will impact customer supply chains.
Expanding upon the weather and climate intelligence Everstream already provides, the new “Climate Risk Scores” tool enables clients to apply eight climate indicator risk projection scores to their facilities and supplier locations to forecast future climate risk and support business continuity.
The tool leverages data from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) to project scores to varying locations using those eight category indicators: tropical cyclone, river flood, sea level rise, heat, fire weather, cold, drought and precipitation.
The Climate Risk Scores capability provides indicator risk projections for key natural disaster and weather risks into 2040, 2050 and 2100, offering several forecast scenarios at each juncture. The proactive planning tool can apply these insights to an organization’s systems via APIs, to directly incorporate climate projections and risk severity levels into your action systems for smarter decisions. Climate Risk scores offer insights into how these new operations may be affected, allowing organizations to make informed decisions and mitigate risks proactively.
“As temperatures and extreme weather events around the world continue to rise, businesses can no longer ignore the impact of climate change on their operations and suppliers,” Jon Davis, Chief Meteorologist at Everstream Analytics, said in a release. “We’ve consulted with the world’s largest brands on the top risk indicators impacting their operations, and we’re thrilled to bring this industry-first capability into Explore to automate access for all our clients. With pathways ranging from low to high impact, this capability further enables organizations to grasp the full spectrum of potential outcomes in real-time, make informed decisions and proactively mitigate risks.”