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June 19, 2015 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet John Hill "Unplugged" Part 2 - 12 Years Later bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Holste's Blog/Distribution Digest
bullet Cartoon Caption Contest Contest Continues bullet Trivia      bullet Feedback
bullet New Supply Chain by Design and Expert Insight bullet Videocast/On Demand Videocasts

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Supply Chain Graphic of the Week
A Historical View of Oil Prices from BP

Amazon Pleads for Drone Reg Relief
Global Water Supplies Shrinking Fast, New Research Says
US Manufacturing Growth Stalling
Boeing Suppliers Struggling to Keep Up


May 27, 2015 Contest

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

Holste's Blog: Extending The Serviceable Life Of A Typical DC Conveying System



Weekly On-Target Newsletter:
June 17, 2015 Edition

Cartoon, Amazon Box Ads, RFID Robot, DC Volatility, BP Energy Review and more

Top Four Best Practices for Multi-Objective Optimization

by Dr. Michael Watson

The State of Global Sourcing and Trade Management

Please Take the Brief Survey Now.

Get Copy of Report

Developing an Effective Export Compliance Audit Process

by Suzanne Richer
Director, Trade Advisory Practice
Amber Road


In combination, Ford Whitman Harris and RH Wilson are responsible for inventing and popularizing what core supply chain/procurement concept??

Answer Found at the
Bottom of the Page

John Hill "Unplugged" Part 2 - 12 Years Later

I have known John Hill, one of the most well-recognized and influential figures in the areas of Warehouse Management Systems, automatic data collection, and supply chain execution, for about than 20 years - though I have no memory of when and where we first met.

But I do know he did me a favor early on in SCDigest's history by participating in the very first "unplugged" interview we ever ran, just weeks after our first issue ran in late September, 2003. You can find that here: John Hill "Unplugged" 2003


"Does Hill have any regrets? Not many, but one was related to an idea he and Dave Scott had for a new kind of WMS that never made it to market."


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So I thought it might be fun to do it again here in 2015, and both Hill and I enjoyed the effort. For those that don't know, Hill is currently a consultant at St Onge, and has had a great career, perhaps most notably as CEO of a company called Logisticon, which was one of the earliest WMS companies and which ultimately produced many people who played prominent roles in WMS after Logisticon closed under some very unusual conditions (more on that someday) that had nothing to do with Hill.

He and a small group of folks - notably the late Dave Scott - ran a small consulting firm called Cyprus for many years through and beyond the 1990s that had influence in the market well beyond its size. He was a fixture giving conference presentations for years, to the point many assumed he was running a very large consulting firm. He has been highly involved and influential in the MHI organization (the former Material Handling Institute) and automatic identification group AIM, and indeed is a chart member of a group called the AIDC 100

There is quite a bit more, but hopefully that gives enough of a flavor. So here today are some highlights of our recent interview, this time a much longer one than in 2003. You will find the full transcript in next week's OnTarget newsletter.

I started by asking Hill what has really changed in the WMS/SCE market since our first interview in 2003.

"You know, it's hard for me to say "back in 2003." But you look and say it's been 12 years," he said. Noticeable then, he said, were the early signs of significant WMS sector market consolidation. 

"As you know, that consolidation has continued on for the last 12 years. In fact, only one tier 1 provider [Manhattan Associates] from the old days really remains today," Hill noted. "Remember when we used to talk about there being more than 100 WMS providers, maybe even over 200 at one point? Some of them are still out there somewhere today, but the ranks have been thinned remarkably."

I noted that back in the heyday of a trade show called Distribution/Computer Expo, there would just be aisle after aisle of WMS vendors, and remember talking to some attendees back then in the 1990s that told me that after visiting about 10 or 12 booths, their heads would start to spin and they would just turn around and go home.

We naturally discussed how most WMS vendors have long ago moved outside the four walls of the DC, and now beyond even applications like TMS and yard management to Distributed Order Management, supply chain visibility, even supply chain planning.

So how do we categorize these types of vendors now? Hill says he has coined a new term and acronym: Enterprise Supply Chain Management, or ESCM, to provide a new category for these hybrid vendors.

Alas, the term not surprisingly has been used already, at minimum by the old Peoplesoft before it was acquired by Oracle, so his idea of copyrighting it and making a living off the royalties seems unlikely. But ESCM is certainly not in common parlance. I like it, and may just start using it - royalty free - here on SCDigest.

One thing I definitely want to cover is why WMS implementations today often remain difficult and painful - much more so than I think either of us would have predicted back in 2003.

Why is this so? Hill says changes in WMS vendor practices are a key factor.

"As the WMS market has grown and matured, I think frankly that the level of talent on the WMS vendors' front lines has diminished," Hill said. "And a number of them are subcontracting implementation to third parties. There are some good third parties out there, but some of them don't know a warehouse from an outhouse."

He believes WMS vendors need to up their games in terms of who they hire and how they train them for these deployments.

"You need people who understand distribution, not just how to configure the WMS product. And that includes the front end, the sales force, who I think need to have stronger knowledge of both distribution and the product they are selling." He added. "I've received some sale pitches over the past few years where you wonder if they've ever even walked a warehouse."

But WMS customers often don't help themselves either, Hill believes.

"In my experience, supply chain projects failed when users didn't fully do their homework, or skipped important steps in the process, whether its failing to well define workflows and processes, performance goals, all the needed capabilities, etc.," he says. "But even when they've done all that, some companies still don't well connect all those requirement to what's in the different WMS packages they are evaluating. It's hard work, but it has to be done correctly, and if it's not it can lead to the kind of deployment pain you referenced."

In October 2003, RFID was ready take off, with the EPCglobal organization just forming, the Walmart tagging mandate announcement, and RFID climbing to almost mania conditions. We discussed that back in that first interview. Then, the Walmart program imploded just a few years later, and the momentum for RFID in distribution collapsed with it, especially in the US.

What happened, and will that change someday soon?

"The Walmart announcement was a watershed event, and cost a number of companies a lot of money in terms of preparing for those mandates," Hill said. "What we wound up with unfortunately were cost and performance issues that I might compare to "square peg-round hole." The technology was not ready at a price point that could be cost justified for the applications Walmart was trying to pursue," leading to the program's demise.

But the Walmart mandate did lead to huge investments in RFID technology, even though many venture capital firms lost their shirts in the end, and the technology today is far superior to what it would have been otherwise, Hill said.

While he believes RFID likely will be used more extensively in distribution than is the case today, it will be used in combination with other related technologies, including bar coding, Voice, smart glasses and more, rarely as the only such technology in a DC.

Does Hill have any regrets? Not many, but one was related to an idea he and Dave Scott had for a new kind of WMS that never made it to market.

Hill said the concept was for a program into which "a user could input data on current and projected warehouse activity and product mix and volumes, equipment and human resources, and out of the program would pop out alternatives for changing the physical layout of the DC and how to deploy staff to optimize performance."

Next, he said, the program would automatically generate and configure a WMS to execute that plan and manage performance. It would do the same as activity profiles and business conditions changed over time - a sort of "magic WMS" you might call it.

"We got pretty far with that concept - but then we ran out of money," Hill said. "But someday, I think someone is going to do it, bring such a WMS to the market." 

There is one other problem - Hill has no idea where the source code or documentation is today. "Maybe in a safety deposit box in Jackson Hole," he says.

Then finally the most important question - is he ever going to retire?

"My golf game is no longer good enough to do that - and I'm still having too much fun in "our world" to leave it!" he said.

Good guy. Good stuff. Full transcript with much more next week in OnTarget.

Any reaction to John Hill's comments? Do you know John? Let us know your thoughts at the Feedback button or section below.

View Web/Printable Version of this Column

Tuesday's Videocast:

Expert Panel on Supply Chain Risk Management - Major Auto OEM, Palo Alto Networks, More

World Class Panel to Discuss on Leading Practices to Manage Supply Chain Risk

Register for this outstanding Videocast to hear the full story

Gary Lynch, CEO at The Risk Project, Brian Jenkins, Risk Financing Manager at General Motors, Vonnie French, VP Supply Chain Operations at Palo Alto Networks, Bindiya Vakil, CEO at Resilinc. and SCDigest's Dan Gilmore

Tuesday, June 23, 2015

On Demand Townhall:

Achieving Real-Time Visibility in an Outsourced Supply Chain - the AMD Story

How AMD Integrates Material, Information and Financial Flows

Register for this outstanding Videocast to hear the full AMD story

Katrin Schulenburg, Senior Director IT at AMD, shares the AMD journey and success in this outstanding Videocast. Also features Geoffrey Annesley of E2open and SCDigest's Dan Gilmore

Now Available On Demand

On Demand Videocast:

Dr. David Simchi-Levi's Risk Exposure Index 3.0

How Ford has Leverages the REI from Strategy through Execution

Details on how Ford has Adopted this Expanded Approach and now uses REI not Only for Strategic Risk Management but also for Tactical and Operational Risk Management

Dr. David Simchi-Levi of OPS Rules and MIT and SCDigest's Dan Gilmore

Now Available On Demand


We received some modest Feedback on our article on Kroger being the latest retailer to begin a program to hire disabled workers in a distribution center, but wondering why more retailers haven't initiated these programs after success at Walgreens and a few others. Some of the Feedback from our partners over a RetailWire.

Feedback on Disabled Worker Programs in Retail DCs:


There are more risks in the distribution center than in the stores. The key is that Kroger has been so aggressive in getting disabled workers into the stores.

I shop at Frys, a Kroger arm in Arizona, and have great relations with the many disabled employees at our favorite Frys store. It's great to see and they're dedicated workers who love what they do - and we all ignore their challenges.

Tom Redd
Vice President, Strategic Communications
SAP Global Retail Business Unit


The article does a good job of summing up most of the reasons but avoids the one key reason: discrimination. People feel uncomfortable around people who have disabilities.

As the article says, and research has shown, employees with disabilities if hired and trained properly can be real assets.

Mel Kleiman



At the risk of stating the obvious: because distribution center (warehouse) work is physically demanding, and often dangerous, and the list of disabilities which cannot be accommodated is long (visual impairment, paralysis, neuromuscular conditions, etc.).

Walgreens and Kroger are to be applauded - even if the modest claim of serving their self-interest is true - but I'd be cautious about stereotyping (even a seemingly positive one).

I suspect the (perceived) greater reliability is largely due to more rigorous screening.



I believe there is just a lot of mystery here to most distribution companies and retailers. You are afraid of what you don't know.

In addition, I think these initiatives are perhaps obviously best suited for DCs with a lot of piece picking, which is true in many/most retail DCs, but perhaps why the move has not spread to other sectors.

But in the end, these programs seem to be having success, so more companies should be looking at them.

Christian Wolfe

Long Island, NY




Q: In combination, Ford Whitman Harris and RH Wilson are responsible for inventing and popularizing what core supply chain/procurement concept?

A: Economic Order Quantity (EOQ).

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