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January 31, 2008 - Supply Chain Digest Newsletter
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First Thoughts by Dan Gilmore, Editor

Best New Supply Chain Products of 2007

What were some of the most interesting new products in supply chain and logistics in 2007?

Gilmore Says:

" I just liked the idea that consumers, including you and me, should have the ability to “opt out” by whatever means to being tracked."

What do you say?

Send us your comments here

This is the first open editorial spotwe’ve had this month to do a review of some of the tools and technologies that caught my eye over the past year, and I am pleased to offer my thoughts on that topic this week.

In no particular order, here are the new product releases that intrigued me in 2007:

Aria” from LXE. Aria isn’t really a product, it’s more of a concept that was unveiled in the first part of the year. The idea is consistent with the growing focus on “multi-modal” devices in the distribution center, combining some mix of traditional RF, RFID, and voice.

Aria demonstrations featured an order picker receiving case pick instructions via a Voice headset; cases with RFID tags were then placed on a pallet jack that included an RFID reader that validated the SKU and quantity.

I think this integrated combination of technologies makes sense, and admit to some bias because I proposed such an idea in about 2001 to an unnamed analyst from a major research firm who thought I was crazy (“No reason to mix those technologies.”). Voice and RFID (and bar code) together have the opportunity to really take some costs out of order picking. Other vendors, such as Vocollect, now share similar visions and product development paths.

I was also very impressed with “the Virtual Warehouse” from Softeon. It’s hard to quickly describe this product, but can be thought of as filling a void between traditional forecasting and DRP systems and WMS. The product, part of Softeon’s broader supply chain execution suite, combines network-wide inventory visibility with an integrated view of demand, and helps companies make better inventory deployment, allocation and shipping decisions. Very cool.

I also liked a new truck loading automated guided vehicle (AGV) from Egemin, which expands on the traditional AGV solution and moves pallets right onto a trailer without an operator. It’s similar to a product released previously by Jervis B Webb, but I liked Egemin’s open technology approach to the controls. As more and more companies embrace visions of a future nearly “lights out” distribution center, technologies such as this will clearly be of interest to many logistics professionals.

It’s not totally new, but SCDigest Technology editor Mark Fralick and I also liked the most recent release of i2’s Business Content Libraries.” As we noted in our review, the product is still understandably something of a work in process, but it delivers now and holds even more promise for realizing the potential of Service Oriented Architecture (SOA). How? By enabling companies to craft processes (workflows) from a library of templatized processes ranging from sales and operations planning to transportation management, and then customizing those workflows to individual company requirements or new market dynamics. The framework enables users to link the data, functionality and user interface components required for the process. One of the first examples I’ve seen of where this is all going in terms of supply chain technology.

I only partially understand it, but I liked what I’ve seen from a new company named Extol that last year released a product designed to enable improved supply chain integration, especially for medium and small businesses. It is one of many companies that are trying to better leverage Excel or other spreadsheet data into business processes. Extol provides a platform to take Excel-based data, from a sales forecast to an advanced ship notice, and improve visibility and control of this often difficult to manage data, and to integrate the information into existing business systems. Have an offshore supplier that can generate spreadsheets but not much else? This could be your answer.

It’s silly in a sense and easily duplicated, but I actually was glad to see the $4.00 RFID shield for credit cards from Smart Tools. The idea: as credit cards, such as those envisioned by American Express, begin to use RFID chips which could track consumer behavior in-store, this shield blocks the tags from being read in your wallet. I just liked the idea that consumers, including you and me, should have the ability to “opt out” by whatever means to being tracked. We’re early in this showdown over RFID and privacy, I am sure.

LogicTools released a new solution that combines traditional network planning with the newer category of inventory optimization. Surprising to many, network planning/optimization tools have until recently not really handled multi-echelon inventory planning, leading perhaps to sub-optimal total supply chain decisions. In some cases, consulting companies such as Chainalytics have crafted some work-around tools to bridge the gap. The LogicTools solution released in Q2 2007 starts to solve the issue, an approach others such as i2, Llamasoft, and others are taking as well.

Finally, another new product I have had only partial exposure to, but which looks (literally) very compelling, is the WMS and broader supply chain execution suite from NextView. It uses all the latest technologies, such as a true SOA foundation, but what really distinguishes the product is the focus on real-time visualization – a whole new way of thinking about supply chain applications, and another example I think of where we are clearly headed. As my friend Steve Banker of ARC Advisory Group wrote, the NextView WMS solution “allows you to point at a driver and get productivity statistics on that worker, point at a warehouse slot and get slotting metrics, point at a pallet and get a detailed history of who did what in building and moving that pallet.” Also very cool.

Finally, though it’s been around for awhile, I had my first exposure to the Auto Vehicle Load Builder from Warehouse Optimization LLC in 2007. The product drives strong savings in transportation costs by simply getting more product on each truck through software that builds better loads, looks for consolidation opportunities across customer orders or planned shipments from plants to DCs, and other techniques. In an era of high transport costs and the urgency to get more “green,” this product is worth a look (see more in our videocast on the subject, where I first learned about the solution).

I certainly didn’t see everything, and I am sure many vendors will take umbrage that their solutions weren’t mentioned. Let me know what we missed, and we’ll take a look. 

What new supply chain and logistics products impressed you in 2007? Where do you see opportunities for innovation and product development across hardware, software and services? Let us know your thoughts at the Feedback button below.

Let us know your thoughts.

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Dan Gilmore


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This Week’s Supply Chain News Bites – Only from SCDigest

January 31, 2008
Supply Chain Graphic of the Week - Green Supply Chain Index for 2008

January 31, 2008
Supply Chain by the Numbers: January 31, 2008


U.S. stocks finished the week stronger following the largest cut in the federal funds rate in more than twenty years.

Our Supply Chain and Logistics stock index appeared to benefit from the drop in rate.  The software group results were mixed. In the hardware group, both Intermec and Zebra were up, while in the transportation and logistics group, Yellow Roadway continued its recovery and soared 25.4%. Norfolk Southern and CSX also both saw double digit increases (14.9% and 10.4%, respectively).   

See stock report.

Discussion Question:

Out-of-Stocks Cost Retailers $93 Billion

Why Have Out-of-Stocks Remained Such a Big Issue in Retailing for So Many Years with So Little Apparent Progress? What Has to Happen to Finally Make this a Minor if not a Total Non-Issue?

Sorting it Out

by: Cliff Holste

My Lessons in Sortation Systems for Distribution

Batch Order Picking and Downstream Sortation Benefits are not Obvious at First


Each Week:

-Global Supply Chain
-Distribution/Material Handling
-Trends and Issues

Read it Now

Weekly On-Target Newsletter
January 29, 2008


Q. How many miles of conveyor are there in Wal-Mart's 1.2 million square foot DC number 6094 in Bentonville, Arkansas?

A. Click to find the answer below


Reader Question: Can Bucket Brigades Work with Mechanized Order Picking?

Reader Question: Is there a True Global RFID Standard?

See our expert answers at the links above. Share your knowledge or perspective.

Or, ask your question


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We're really behind again - bear with us. But keep the letters coming! In the next few weeks, we'll start adding feedback right on specific story pages, so you can see what others are saying.

Still catching up on letters sent in late 2007 this week.

Our feedback of the week is from Adam Fein, a well-known consultant and author in the wholesale distribution industry. He wishes we focused more on that sector, and says private label brands and supply chains are thriving there, not just in retail.

Tom Craig says companies with supply chain issues shouldn't be surprised - you get what you build. David MacLeod says sales and operations planning processes need to go below the formalities to be successful, Bill Cogdill says supply chain security is increasingly a Boardroom matter, while another reader wishes rail carriers would keep prices in line to help move more freight to rail.

All are good - take a look.

Give us your thoughts on this week's Supply Chain topics. As always, we’ll keep your name anonymous if required.

Feedbacks of the Week - Private Label Programs by Wholesalers:

I enjoy your publication but feel you overemphasize retail at the expense of business-to-business supply chains.

Wholesaler-branded products are now expanding rapidly in B2B supply chains, creating new opportunities for savvy supply chain management and purchasing executives.

My new research study Lead the Way in the Supply Chain ( reviewed supply chain strategies in more than 70 different industries, and found that wholesale distribution vendors - particularly those that supply industrial and commercial customers - are driving private label growth. The lower costs and ready availability of overseas sourcing opportunities in Asia and South America are enabling distributors to get their own value-priced private label products manufactured.  About 57 percent of distributors with private labels currently source their private label product from an overseas plant. By 2012, 81 percent of these distribution companies expect to be sourcing overseas.

Since private label products are less expensive to purchase, a distributor can earn a higher margin even when the products are priced at a discount to national brand products.  However, these margin benefits come with additional supply chain costs. Sourcing from China or other countries offers lower product acquisition costs, but the length and complexity of these inbound supply chains can reduce or eliminate any potential margin improvement.

It would be interesting if you could profile the supply chain strategies of distributors that offer private labels.  I also expect that purchasing managers would welcome advice on how to adapt sourcing strategies that have been shaped by more familiar brands.

Adam J. Fein
Pembroke Consulting

On Supply Chain Design:

Supply chains are designed. They do not happen in a vacuum; they are not a result of the forces of nature. But they do reflect an organizational Darwinism. Supply chains often have one approach and are not modified to reflect differences in customers, inventory profitability/inventory,ROI or other metrics.With one "design" they struggle to dealwithmarket or management dynamics.

Firms build their supply chains, deliberately with care, with indifference or whatever approach, but it is what they designed. Most often cost is the key factor in the design. Service, inventory impact and other issues are often overlooked or "assumed". As a result, many supply chain do not operate well. Firms get the supply chains they built--and deserve.

Tom Craig
LTD Management
Logistics / Supply Chain Management Consulting

On Sales and Operations Planning:

Rather late in the day I have just been reading your piece on S&OP. Based on personal experience one of the greatest problems is the lack of honesty by participating managers, and a preparedness to find the root cause of failure. There is a collective rationale/feeling, rarely back by experience, “that it will be all right on the night”. The desire to do well is simply not enough – there needs to be a workable plan that will deliver the customer requirement.

David MacLeod
Learn Logistics Limited

On Supply Chain and the Boardroom:

I agree with Paul Matthews’ point of view, however I would categorize the Security topic (at the end of the article) as a Risk Management issue at the Boardroom level.

Risk Management also includes other such Supply Chain issues such as Free Trade Compliance; Cross Border movements, CT-PAT compliance, Sox and other such Government and Regulatory issues.

Increasingly M&A and Supply Chain are intermingled due to the distinct nature of integrating disparate Supply Chain systems (software) and technologies (hardware) into a uniform process, which is essential to any combined Supply Chain performance goal(s).

Many companies are looking beyond “controlling raw material costs” and looking at Total Integration Costs from a Product Lifecycle perspective of which Raw Material Costs are only a sub-segment. For example, a client of mine is buying raw materials from China, assembling it in the US only to have a growing portion of the total production exported back to China.

Bill Cogdill
Director, Supply Chain Practice Group
Cognizant Technology Solutions

On Rail Transport:

Rails are good for the United States they use less fuel than trucks and make the country less dependant on foreign oil.

The rail companies ought to keep the rate low so they do not loose the business to trucks. Why are rail companies raising the rates so much?

Ron Pilani


Q. How many miles of conveyor are there in Wal-Mart's 1.2 million square foot DC number 6094 in Bentonville, Arkansas?

A. About 19 miles. 15 miles or more of conveyor is typical for a Wal-Mart DC.

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