I am just back from Denver and the Council of Supply Chain Management Professionals (CSCMP) annual global conference. Thanks to the many of you who have written with kind words for the daily video summaries offered by myself and Gene Tyndall. If you would like to catch any of those three broadcasts, you can find them here: CSCMP Video Reviews
Overall, it was a good show, though it didn’t seem to have quite the usual energy. That may have been at least partly the result of news of the latest stock market stumble we kept hearing each day.
The weather in Denver was beautiful, and the building right-sized for the 3000 or so attendees, once you figured out the somewhat confusing convention center layout.
Descartes Systems CEO Art Mescher received the Distinguished Service Award for his many years of thought leadership in the industry. Perhaps most notably was his work in the 1990s at analyst firm Gartner, where Mescher developed the incredibly influential framework of the “3 V’s” of the supply chain (visibility, velocity, and variability), among many other contributions he has made to the SCM discipline.
Network equipment giant Cisco Systems, as the only Green entrant, won the Supply Chain Innovation award for a new process for return/retired products that has dramatically reduced solid waste. That the Green entrant would win was a near certainty, I predicted, but I pulled for Cisco this year as I did last year for Motorola for being the only nominees without one or more 3PL, consulting or software partners listed as nominees with the real company.
Not surprisingly, there was a lot of Green emphasis in Denver, with a Green Supply Chain track and the topic also covered in many other sessions. A little too much so for me - am I the only one that is finding Green presentations getting a bit redundant? There was no track this year on RFID, though there were a couple of sessions on it in other tracks, including one that I am told had some interesting stories about use of RFID in manufacturing.
|"Ulrich made a powerful case that exponential, game-changing improvements in technologies like computing power, nano technology, robotics and yes, RFID, will soon radically change our world and put many companies large and small out of business, while giving rise to new ones."
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From my own experience and talking with others, the Sales & Operations Planning track, run by Chris Moye of Alvarez & Marsal Consulting, was uniformly excellent. Transportation-related sessions in general seemed the best attended, as did sessions on study/survey results (people want to know what others are doing/what’s happening out there), and operationally focused presentations (people are always looking for the practical).
Below are some highlights from a few of the sessions I attended. We will detail these and several other presentations in more detail in our weekly On-Target newsletter over the next few weeks.
Christian Verstraete of HP gave a very interesting presentation on how HP’s Printer group in Europe uses the concept of different “supply chain pipes” linked with product lifecycles to optimize total supply chain costs.
A “pipe” is a different physical route, and for HP includes where the final postponement of the printers for specific country or customer requirements is performed. On a quarterly basis, HP looks at the respective costs of those “pipes” and where each product is in terms of its lifecycle and unit forecast. It then plans which pipe will be the most cost effective for each SKU for the next quarter. For example, at the peak of the lifecycle, postponement is actually often performed in Asia, because customers frequently order full container loads that make Asian shipping economical (versus doing postponement in Europe).
Sometimes, the determination of the pipe is actually made on an order-by-order basis. The cost analysis also includes a sophisticated consideration of inventory costs (“Inventory-Drive Costs”); that’s critical because the pipe with Asian postponement centers and ocean shipping direct to customers has the lowest labor and logistics costs but must be balanced against the need for the channel partner to hold more inventory as a result of longer order lead times.
Procter & Gamble’s David Mills gave a very good presentation on its use of new “demand sensing” technology. What is that, you may ask?
A “black box” of sorts (from Terra Technology) that takes a variety of daily inputs (not yet POS, but several other feeds of order and shipment data), and then performs a variety of calculations and “pattern recognition” techniques to create a detailed, daily forecast for the next 42 days. That updated forecast is used to drive production scheduling, short-term inventory planning, store replenishment, etc. With a reduction of safety stock levels of 10% and short-term forecast improvements of 30% in the pilot program, plus many other benefits, P&G is actually executing a “turbocharged roll-out” of the tool across the globe. (You can find a P&G case study on this technology at our Inventory Optimization Resources page).
I was struck at a session on taking control of inbound logistics in manufacturing at how uncommon this apparently still is in that sector (versus say retail). Logistics managers at John Deere, WMS (a gaming systems company) and baking products maker Continental Mills all described the early journey they were on to take control of inbound. In the case of WMS and Continental, nearly all the freight was simply bundled in the purchase price of the goods. In John Deere’s case, it picked up the freight bills, but it previously had little idea whether suppliers were really using its routing guides or not.
Key takeaways from that session: in addition to lower total supply chain costs, sell the benefits of greater visibility and early warning systems for potentially late supplier shipments to get support from manufacturing for the inbound strategy, and have your data ready to show suppliers the cost of non-compliance with routing guides.
Zeiss Vision used Lean techniques, including a whole new way to think about slotting (predictability of demand, not total volume, to drive ABC classification) to significantly improve results at a DC in Kentucky.
The Wednesday keynote by futurist James Ulrich was simply excellent. I know CSCMP wants attendees to stick around for day 3, but Ulrich should have been the day 1 main tent speaker.
We will provide additional details soon, but Ulrich made a powerful case that exponential, game-changing improvements in technologies like computing power, nano technology, robotics and yes, RFID, will soon radically change our world and put many companies, large and small, out of business, while giving rise to new ones.
For example, supercomputers are becoming so cheap that they will allow incredible new deployments of optimization software to make near real-time decisions much more frequently on the shop floor or distribution center. Ulrich cited an example of a retailer whose inventory deployment optimization run used to take 6+ hours. On a supercomputer, it now takes 17 seconds, and is run several times per day. RFID chips the size of dust particles are coming, as are a new generation of robots, etc.
The message – get on top of what is going to happen in these areas right now, or you may go the way of the dinosaur in just a few years.
As always, I have a few thoughts on how the conference could continue to improve.
- I don’t know if a real analysis would support me, but I sensed this year an overly strong “3PL-ization” of the conference. This is a condition that has actually been a problem for some local CSCMP roundtables over the years (too many 3PL members overwhelm the “user” participants), and could backfire if it gets worse for the global conference as well.
Just to make the point with an example, the three companies on the “Taking Control of Inbound” panel were all clients of the same 3PL, which also happened to have the chair of the track and the moderator of the session. The discussion, while good, would have been much better with a balance between those who took control of inbound themselves and companies that decided to outsource.
- Let’s shorten the speaker bios and company overviews in the presentations. I don’t know if some edict went out about bios this year, but they were way too long in general, especially on panels. Combined with too many slides on the profiles of their companies by most presenters, and it simply took way too long in many sessions to get to the meat of the matter. Brevity is a virtue.
- CSCMP should go back to the days in the 1990s when it made audio recordings of the presentations available (at a cost) right there on the show floor. I talked to many people frustrated that they couldn’t make one session of interest while attending another at the same time. While CSMPC sells a CD now with audio and slides of many presentations, it doesn’t come out for months. The interest in the material is highest at the conference – you lose interest in those sessions that you missed quickly after the event.
- I’d vote for more “half tracks;" trying to fill every session slot over three days leads to overlap and reduced quality
But, as always, I came away smarter and inspired, and look forward to seeing you in Chicago for CSCMP 2009.
Did you go to CSCMP 2008? What were your reactions? Any sessions seem especially good? How could CSCMP make the conference better? Let us know your thoughts at the Feedback button below.
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