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January 20, 2017 - Supply Chain Flagship Newsletter
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This Week in SCDigest

bullet Trip Report - NRF 2017 bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Holste's Blog/Distribution Digest
bullet New Cartoon Caption Contest Begins bullet Trivia      bullet Feedback
bullet New Expert Column bullet Videocast and On Demand Videocasts
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The Executive Guide to High Value, Low TCO WMS on the Fast-track  

 
 


 
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SUPPLY CHAIN NEWS BITES


Supply Chain Graphic of the Week
Mapping Customers Flows - and Where Customers are Lost


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The Amazon Fulfillment Centers Keep Coming and Coming

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New DOT Report Finds $37 Billion Annual Infrastructure Spending Shortfall
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CSX Better Start Learning How to Run a Better Railroad
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NJ Trucking Firm Owner in Jail over E-Z Pass Fraud
   

NEW 10th ANNUAL GARTNER SURVEY

As Always, Survey Respondents Receive Complimentary Gartner Research - a $300-500 Value







NEW CARTOON CAPTION CONTEST BEGINS

January 17, 2017 Contest


See The Full-Sized Cartoon and Send In Your Entry Today!


NRF 2017 VIDEO REVIEW AND COMMENT - DAY 1 AND DAY 2



Day 1

Day 2

   
Holste's Blog: The Challenge of Incorporating a Business Within a Business


ONTARGET e-MAGAZINE
Weekly On-Target Newsletter:
January 19, 2017 Edition

New Cartoon, Top Retail Supply Chains, NRF Day 2, Cool New Product and more


NEW EXPERT INSIGHT
e-Commerce is Just Commerce
by Gary M. Barraco
Director,
Global Product Marketing
Amber Road

EXPERT INSIGHT
WMS in the Cloud will Go Mainstream in 2017
by Dinesh Dongre
Vice President of Product Strategy
Softeon

SUPPLY CHAIN TRIVIA

He was known for first identifying what became known as the Bullwhip Effect and inventing the famous beer game – who is he?

Answer Found at the
Bottom of the Page


Trip Report - NRF 2017

I am back from two very hectic days at the National Retail Federation's “Big Show” conference and trade show, as usual at the Javits Center in New York City.

Thousands of you have viewed our NRF Day 1 and Day 2 video reviews - thank you. 

As I noted in my Day 1 review, I cover this show, which includes many in-store technologies a bit far afield from supply chain, because: (1) in the end, almost all businesses, most notably of course consumer goods manufacturers, are connected to what happens in retail; and (2) there are usually interesting developments of general interest to all of us as consumers.

GILMORE SAYS:


We are on the verge of solving much of the store out-of-stock problem.

WHAT DO YOU SAY?

Send us your
Feedback here

These are dynamic times (to put it mildly) for retailers. Ecommerce sales grow about 15% year over year every quarter. Amazon grows at about twice that rate. There are major opportunities for retailers in terms of "omnichannel," though few make ecommerce profits, while there are big pressures on the store, with a wave of closings announced last year and a few more already in 2017.

With that said, there were a bit more than 30,000 attendees at the show, up slightlyl from 2016, and there is no question the show felt crowded.

I struggled after Day 1 to identify an overall theme to what I was seeing at the show. A continuing sub-theme in recent years is that virtually all software development is going to smart phones and tablets. That goes well beyond POS-type systems - a robot designed to travel store aisles and find out-of-stocks was being controlled by a smart phone app too.
This is where software is heading - plan and invest accordingly.

But on Day 2, the real theme finally hit me, when I spent some time in the IBM booth. And that theme is a product: IBM's Watson supercomputer. You probably know Watson for beating Jeopardy champions or before that world champion chess player Gary Kasparov, but here at NRF virtually all IBM's large booth was devoted to applications running on Watson across almost every area of software.

The key is Watson's massive computing power combined with a powerful artificial intelligence capability, allowing Watson to consider huge amounts of structured and unstructured data in making decisions, learn as it goes, and think like a human - in many cases better than a human.

IBM was demonstrating two very real supply chain applications, one on supplier chain risk management, the other on optimizing parcel shipping for ecommerce, which IBM says is in use at one large etailer. 

What IBM is bringing to the table with Watson is a level of smarts and optimization we haven't seen before. I am sure it all costs lots of money, but this may be the real herald of where software in the supply chain and far beyond is headed. Of course, you can ask Watson pretty sophisticated questions, as I saw in the demo, and get very good answers. 

I also learned at the show that in 2016 IBM acquired all the data assets of weather.com, which retained its television channel and website. Why would IBM do this? To have a rich database of previous and upcoming weather to feed to Watson for many applications, including supply chain. IBM also now has weather data back to the 1970s, which can allow a company, for example, to learn how weather really has historically impacted sales of specific products in specific locations. 

In my opinion what IBM is up to is a threat to any software vendor that provides decision support tools, and a look into a very brave new software world - more on this soon.

I am only going to have room below for a portion of the solutions I reviewed in the videos - go to the videos for more.


I'll begin by noting that I stopped by the Datalogic booth, and spoke with someone about their so-called wide area reading system for RFID. These things look like an extra large pizza box, mounted on the ceiling. The systems read individual RFID tags on items, and can identify when an item has been moved, etc.

Each reader can cover about 1500 square feet, and they can be ganged together for larger areas. I asked about the feasibility of using this technology in a distribution center, enabling continuous monitoring of inventory of say RFID-tagged cases.

Alas, the answer is this isn't going to happen any time soon. You would need too many of these readers, and the metal in the DC racking plays havoc with RFID signals. Sounds like it is going to be quite awhile before we can bring this technology into distribution.

Which leads me to the next coolest new thing I saw at the show, which was a new - and expanded - wide area reading system from Zebra, called smartsense for retail. 

What makes this different from other systems is that RFID reading is just one of its capabilities. It can also capture video with embedded cameras, use some ultrasonic technology to track smart phones, and has one other data feed that is escaping me.


This, Zebra says, can enable richer applications, such as tracking a given specific shopper through his or her smart phone combined with what RFID tagged items he or she has in a shopping cart. This is innovation for sure, and a very new type of more total system solution from Zebra.

I will note as an aside, we will soon all be tracked continuously as we move through a retail store, though you can opt out of some tracking on the Zebra system.

JDA introduced a new system called "Store Optimizer," in partnership with Intel (which continues to up its retail sector ante) so that the software receives data from Intel's own RFID gateway product that can also deliver video and other data feeds.

Greatly summarizing, the JDA solution will marry that data with its in-store workforce management solution, and in the process at last turn task management in-store from basically an electronic checklist into more like how task management works in a WMS in the DC. In WMS, work is queued up and assigned via mobile device based on priority, permission and proximity - a this change in retail I have actually been recommending for several years (see my 2009 column Warehouse Management to the Rescue for Retail Out-of-Stocks?).


As a simple example, the priority of getting a sweater left in a dressing back on the floor highly depends on whether there are more of that color and size on the rack or it is the only one in the store.

Running low on room and thus forced into extreme summary mode:

Softeon's Distributed Order Management System (DOM) not only supports decisions for optimal order fulfillment across various sourcing points, as is the core of DOM functionality, but at omnichannel leader Duluth Trading Co. and others uses the same DOM platform to optimize the inbound flow of goods, determining where to optimally send receipts from offshore suppliers across the distribution and store network to balance inventory on an almost daily basis.

I very much liked the system from Apex Supply Chain Technologies that controls access to mobile devices like RF or voice terminals, in a highly secure mode. These automatic dispensing units can be placed in a DC or retail backroom, and the system secures the assets, eliminates the need for a human to manage giving the devices to workers and their return, and can be modularized around a facility to get rid of the long lines that often result from a central asset management location. The Day 2 video shows how this works - it's worth a look.


There is obviously much interest in using smart phones as data collection terminals in supply chain applications, but how do you get the bar code scanning capabilities? There are free apps for reading bar codes for sure, but the performance of those apps in supply chain applications is likely to disappoint.

Swiss company SCANDIT has created a software development kit or SDK that software vendors or companies themselves can use to add scanning capabilities using the phone's camera across almost every symbology, and the performance is incredible. The booth featured an iPhone reading bar codes on a spinning wheel at amazingly fast speeds, and a phone reading nine bar codes on a shelf of inventory simultaneously. Data collection hardware manufacturers generally want to sell a scanner module to add to the phone.

Honeywell, which acquired voice leader Vocollect a few years ago, released a new voice solution that can work on any device, and does not require the Vocollect terminal - that is a major change.

Out of room. Interesting two days. We are on the verge of solving much of the store out-of-stock problem.


Any reaction to Gilmore's NRF 2017 summary? Were you at the show? What caught your eye? Let us know your thought at the Feedback button below.



View Web/Printable Version of this Column
   

February Videocast:

Innovation in Shipper-3PL Relationships Benchmark Study Results




New Research will be Unveiled from SCDigest and JDA On This Increasingly Important Topic

In this outstanding broadcast, SCDigest and JDA recently completed new research study on innovation in shipper-3PL relationships, with the goal of obtaining the perspectives of both shippers and service providers on this increasingly important topic. All registrants will be sent a copy of the report will all the data shortly after the Videocast.


Featuring SCDigest editor Dan Gilmore and Danny Halim and Lori Harner of JDA.

Tuesday, February 7, 2017

On Demand Videocast:

New Cloud WMS Solution is Game Changer for Warehouse Management Deployment and Flexibility


New Technology and Deployment Approach Offer a Simply Better Way to WMS Implementations - Learn How


In this outstanding Videocast, we will cover the latest in each-picking robotics, co-bots, artificial intelligence, autonomous vehicles, sensors, drones and droids.



Featuring  Dan Gilmore, Editor, along with Mark Hawksley and Bruno Dubreuil of TECSYS, a leading provider of WMS solutions.



Available On Demand

On Demand Videocast:

Successful Supply Chain Vendor Compliance - for Retailers and Beyond

Author Norm Katz on Vendor Compliance "By the Book"

In this outstanding Videocast, Katz will summarize key elements of book, to include: Compliance program guiding principles; What is permissible under the law relative to vendor chargebacks; Common mistakes companies make in rolling out and maintaining vendor compliance programs; The many "E's" of successful vendor compliance, from "Envision" to "Ethics."

Featuring  Dan Gilmore, Editor, Norman Katz, consultant and author of "Successful Supply Chain Vendor Compliance," and Greg Holder, CEO, Compliance Networks

Available On Demand

YOUR FEEDBACK

More the great Feedback we received on from Dan Gilmore's First Thoughts column on The Trump Supply Chain?, with his analysis of what we can likely expect in terms of supply chain impact from the Trumpster. First Feedback below from Jon Kirkegaard of DCRA Inc. is outstanding.

Feedback on The Trump Supply Chain:

comma

Great job bringing this up. lets help the policy create real value from the talk!

Supply chain design and strategy should be used to enable business and government policy goals. As one who has volunteered significant time to use supply chain and advanced manufacturing to promote US jobs I have witnessed the dysfunction. We believed strongly in the concept of using supply chain to create jobs and donated nearly 3 years of time to Texas Governor's office to develop an Industry Cluster Initiative that justified the Texas Emerging Technology fund. Our efforts were key in raising a half billion dollars to fund Texas businesses that would use supply chain strategy and advanced manufacturing to promote jobs.

I considered it a huge win until I saw how the funds were allocated. They all got used to fund any old initiative. Last I checked they were mostly funding business largely importing goods or some politician's friend's supposed cure for cancer. You can only imagine my reaction . We developed a knowledge base as part of this effort and have kept it running since on own www.Texaslcc.org.

So I am obviously refreshed by Mr. Trump's instincts that something has been horribly wrong with our government policy goals and as it relates to cutting the right global deals that support our treasured manufacturing talent.

However, based on my experience, I am very supportive of what we see evolving but am skeptical that the execution can adroitly align with the goals. As has been said many times, the devil is in the details and to say it politely there are many devils in government.

Here are two concepts we believe hold up in the details and are quite simple to understand vs. global supply chain design is not "easy" to understand for the average business person as not very physical, tangible and to them appears far removed from quarterly profits.

First, Promote Postponed Manufacturing in US:


1. Government policy should support and help US companies create a postponed manufacturing or what we describe as an assembly coordination product supply chain. This means the planning bill of materials (components) could be made and purchased in any part of the world but the final assembly is done in US facilities with US personnel. Bottom line benefits it greatly reduces shipping costs, it protects intellectual capital as we are not shipping full designs off shore, it dramatically lowers working capital as the components can be used to make 1000s of times more product variety then just a single SKU wrapped in Styrofoam, stuffed in a shipping container essentially half full of air.

It also helps on US infrastructure side as logically if you are more efficient in shipping it cuts down on port congestion, transportation cube and even assists in clearance as products are simpler to examine.

Most importantly it creates JOBS and jobs if not into every piece of the engineering design they are at least heavily involved in the planning bill of materials of design. For you supply chain planning experts, you know the difference between a design bill of material and planning bill of material. It is this planning bill of material that essentially needs to become inculcated into government policy thus creating jobs. Once you involve personal at all levels more deeply into the product you create millions of paths for PEOPLE to expand career growth, education, innovation, engineering, and production skills. When you buy finished goods wrapped in Styrofoam and set them on a big warehouse shelf you only create jobs for material handlers of which most are being automated.

I have done this analysis for hundreds of US products and have rarely found that the costs are not less for a finished good when you consider customer choice, total supply chain holding and transport costs and in particular when you consider IP protection and balance sheet losses from IP theft.

We even created two businesses that we own and have operated over the past 10 years that use this postponed US assembly model that does create US jobs in manufacturing.

An example of what government could do to support is create a virtual transportation hub to allow the manufacturers to get transport costs down and precisely coordinate arrival based on lead time to their assembly centers. This is the type of 21st century INFRASTRUCTURE we need. A manufacturing nationwide "air traffic control of sorts."

2. Second Key Initiative  - Incent Promote Develop Manufacturing in the Inner City

There has been much talk of lack of opportunity in the inner city during this election cycle. Why not use our human resources in the inner city to be involved in the initiative described above (assembly) or in pure manufacturing? Of course this is not without effort - as we can all imagine - but the benefit and rewards could be staggering. If you take a top down initiative such as Mr. Trump has indicated he will do it can happen. Imagine what could happen with the right incentives from government to the private sector to "make things" in the inner city - you could provide the biggest opportunity ladder ever imagined.

Having created two businesses that use this model, I can safely say personnel is a challenge but maybe with the right top down perspective, cheer leading, support it can improve. Lets give fame to value creation in manufacturing vs. pure consumerism.

For those of you who have studied the Chinese model in essence by promoting manufacturing of good for foreign export it is what they have done. They have a coordinated effort including blasting US CFOs with information on cheap labor to the point CFOs don't look at total cost.

Bonus 3rd Initiative - Green “Supply Chain Coordination”:


Lastly, as an overriding theme and as what I personally see as the most GREEN initiative the world could take on is top down support for global supply chain coordination. The amount of resources saved, energy saved, unused product eliminated by even tiny percentage increases in coordination is insanely large then all the "green" initiatives ever proposed. In essence the first initiative above Assembly coordination / postponed manufacturing is just a tiny physical example of a larger scale effort to coordinate global supply chain coordination.

Average business reader is going to get this last topic but readers of your site I think do - and many I think would logically agree that government policy that would support supply chain coordination could really cut out immense pollution, waste and improve lives globally not just in US. It has to start somewhere but the strategy used can and will make a huge difference in realization of benefit.

 

Jon Kirkegaard
President
DCRA Inc.



comma


comma

Let's keep this simple.

Unemployment is at 4.9%.

The overall US trade deficit has been largely stable since 2008.

Coal is noncompetitive to gas which currently is plentiful.

For the first time in at least a decade, there is a small decrease in income inequality. (not so meaningful until one considers if tires made in the US that are more expensive, someone will need to be able to buy them.)

Advancement and innovation in supply chain principles made globalization a reality. So why do we want to return to high tariff and protectionism? Those Cuban cars are pretty special, I suppose.

Jerry Saltzman
Director, Global Supply Chain Processes
Pfizer

comma



comma

I remember a chart of the U.S. trade deficit with China, where the share of the deficit due to Walmart alone was clearly visible (somewhere in the single digit %). Consumers need to understand that the factories have left the U.S. because consumers want to buy T-shirts for $9 and DVD players for $39.

PATRICK LEMOINE
Vice President, Product Marketing

E2OPEN

comma



SUPPLY CHAIN TRIVIA ANSWER

Q: He was known for first identifying what became known as the Bullwhip Effect and inventing the famous beer game – who is he?

A: Jay Forrester of MIT, who died in December.

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