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Jan. 25 , 2007 - Supply Chain Digest Newsletter
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Featured Report

Sponsored by: HighJump Software, a 3M Company

Special Report: Cut Transportation Costs for 2007

Shippers face challenges such as rising fuel costs, service shortages, regulation changes, and new customer requirements. This report will help you discover five key ways transportation management systems (TMS) automate processes and reduce costs associated with getting products to their destination on time.


Download your FREE Copy at:


First Thoughts by Dan Gilmore, Editor

The Top 10 Supply Chain Technologies and Strategies for 2007

I get asked a fairly simple question by supply chain and logistics professionals all the time: what's are other companies doing to improve their operations? Where is the lowest hanging fruit?

The answer to that question depends on many factors, or course, and of course a company's own current situation and strategies, but nonetheless the questions have prompted us to develop our first annual list of the top 10 supply chain and logistics technologies and strategies for 2007.

The list is based primarily on an assessment of the relative “pain to gain” ratios that most companies seem to experience when pursuing each category.


We tried to focus as well on areas that still have a relatively low level of adoption. So, for example, while companies with no demand planning/forecasting tools can benefit greatly from new technology support, we deemed this category too mature for inclusion in our list.

You can find a more comprehensive report on this list here, which includes a list of resources available from SCDigest for most of the 10 categories - we are confident you will find it useful.

But here is our list in somewhat summary form:

1. E-Auctions: Use of technology tools to drive on-line contract bidding for a growing array of both indirect and indirect materials. Pain: one band-aid. Gain: five dollar signs (both out of five - see the full report). As we write in the report, why wouldn't this work? It sure does for companies like Rubbermaid and Hallmark.

2. Labor Management Systems in Distribution: A combination of software, engineering and mindset change to improve logistics productivity. Labor management systems are typically built on discrete, engineered standards for specific tasks in a distribution center, plus detailed reporting at the individual operator level against the resulting dynamic goal time calculations for the day’s work. Pain: two band-aids. Gain: four dollar signs. One of the first things we'd do in any decent size DC operation.

3. Spend Management Visibility: Software that provides greatly improved visibility to what a company actually spends, where, and with what vendors. Pain: three band-aids. Gain: five dollar signs. It works at home, why not in companies?

4. Demand Management/S&OP: A process, generally supported by some level of technology tools, of aligning the sell side and the supply side of the company around a unified financial and operations plan. While many companies have nominal sales and operations planning processes in place, the consistent feedback is that most are far from optimally effective. In parallel with the growth of S&OP is the concept of demand management, in which sales, marketing, finance and the supply chain work together to drive demand and sales that maximize profitability, rather than simply reacting to forecast demand. Pain: four band-aids. Gain: five dollar signs. Faster reaction to opportunities and organizational alignment are essential today.

5. Supplier Portals: The technology has existed for some time now to relatively easily integrate suppliers through increasingly functional web portals. The scope of activities is very broad, from purchase order management, to providing demand visibility, to advance ship notice and bar code label generation, to generating dynamic inbound shipment requirements. Pain: two band-aids. Gain: three dollar signs. We see know reason for companies not to be doing this.

6. Network Optimization: Use of network optimization software to find the optimal balance between costs and service in the configuration of a company’s supply chain network. Increasingly, these tools are being used more tactically than in the past, supporting global sourcing strategies, more short term inventory planning decisions, new product introductions, and even sales and operations planning. Pain: four band-aids. Gain: five dollar signs. A variety of factors is making this a hot category right now, and the use cases are changing.

7. Transportation Management Systems (TMS):

Software systems that enable shippers to automate planning and execution, connect electronically with carriers, and reduce freight costs though optimal mode selection, optimal carrier assignment, shipment consolidation, and use of continuous moves. Pain: two band-aids. Gain: three dollar signs, but can be larger for companies with big freight spend.


8. Strategic/Global Sourcing: Use of a more integrated, consolidated approach to supplier selection and procurement, including evaluating total supply chain costs, and consolidating purchasing power. Rapidly, strategic sourcing is also tightly tied to offshoring and global sourcing strategies. We probably could have moved this up on the list, but the opportunities vary dramatically company to company. Pain: three band-aids. Gain: four dollar signs. Obviously a hot strategy now, though many having early trouble getting the results they expect.

9. Wireless in the Warehouse: While use of radio frequency/wireless terminals in distribution centers is at one level a highly penetrated and mature market, we continue to be amazed at the number of even fairly large companies that are still using paper-based systems in their DCs. Pain: one band-aid. Gain: two dollar signs. This is becoming very easy to implement.

10. Yard Management Systems (YMS) and Dock Door Scheduling:  Software tools, implemented either stand-alone or in conjunction with a WMS or TMS, that provide visibility into yard inventory and optimize appointment scheduling and execution on inbound and outbound dock doors. The category has enjoyed substantial growth in the past two years. Pain: one band-aid. Gain: two dollar signs. Environmental changes making these systems increasingly easy to justify.

So that's our list. We strongly considered a few other areas that just didn’t make this year’s list. These include:

  • Voice picking in the warehouse
  • Carrier bid optimization
  • Technology that helps optimize trailer loading to decrease total transportation costs (see on-demand supply chain videocast “Optimizing Transportation and Distribution Performance” )
  • Analyzing distribution data to better tune DC layout and performance
  • Supply chain visibility
  • Global trade/commerce management

As always, we'd welcome your thoughts.

How would you improve or change our top 10 list? What we we missing? Do you think we are off the mark on any of our pain to gain ratings? Let us know your thoughts.

Let us know your thoughts.


Dan Gilmore


Supply Chain 

Videocast Series

Building an ROI

for Reverse Logistics

The focus on "reverse logistics" has been building for several years.

In this excellent Videocast presentation, you'll learn how improving reverse logistics process can provide a high ROI, while enabling your company to meet regulations and contribute to sustainability strategies.

It's an outstanding, highly educational presentation.

More information and to register.

On-Demand Videocast

Optimizing Transportation and Distribution Performance: You Really Can Get More Product on Each Truck

View this excellent broadcast on your schedule

SCM Stock Report


It was another fairly quiet week for our supply chain and logistics stock index.

On the software side, Descartes continued its recent climb, up 4.6% for the week, while most rail carriers were also up big.

See stock report.


Didn't Get to Chicago? See our top hardware and software picks.




The EQ Factor: Navigating through the Emotions around LEAN Changes Part 3: LEAN Leadership

by Scott Barrella (MS CPIM), Supply Chain Manager, Nestle USA

How you manage the change is critical to both the project's success and your career, and its often more "EQ" than "IQ" that matters.

Jan. 25 , 2007

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

Shanghai poised to pass Hong Kong as world's second busiest port

Is Saudi Arabia keeping oil prices low to thwart Iran?

Oil price drop shows dangers of hedging for carriers, shippers

Texas Instruments says outsourcing, and resulting variable cost structure, helps it weather softening demand for chips

Entenmann's Bakery in Long island is ramping down production due to energy and transportation costs

Ralph Drayer, former chief logistics officer at Procter & Gamble, joins board of DSC Logistics

Jan. 25 , 2007

Crossing the Marketing and Logistics Divide

Overcoming the barriers to improved internal collaboration

Jan. 25 , 2007

From the Retail Wire: Is the ASP Software Model Inevitable?

Expert panel debates how far, how fast the on-demand model will grow


Q. What leading wholesale drug company went bankrupt in the 1990s over a failed warehouse automation and ERP project?

A. Click to find the answer below


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Feedback is coming in at a rate greater than we can publish it - thanks for your response.

We're still behind - be patient if your letter has not yet been published

We're catching up on a few more miscellaneous letters this week. Our feedback of the week is from Martin Kelly of iWheels International , writing on our piece on "Made in America - or Made for me?," who says we need to think more about the opportunities across the North American continent.

We have a few more short in sweet letters on topics such as the likely direction of crude oil prices, our video reviews, our annual "No blah, blah, blah" column, and more.


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

Feedback of the Week – On Made in USA


Trying to remain a fairly unbiased Canadian –I would suggest that greater synergies would come about through improved synergies in the overall North American markets. There is great reason and logic as to why Canada has been the USA’s number one trading partner -- and why Mexico is not far behind.

Obviously, world economic dynamics have changed and accordingly things swing and change—but if we in NA look at the logic of discovering the ways to bring about overall continental efficiencies and making our own changes then I for one feel confident that much of the off shoring would in fact simply not prove to be the way to go.

One other thing –we lag on the issue of thinking “green” and the potential disastrous legacy we leave for our children –--our markets need to take a lead and shareholders must devise a new measuring stick to insure the right long term investments are made –not just the short term monetary gains. Our borders are not solid barriers immune to all the various pollutants and unfriendly alien foreign animals/insects etc etc. The point –companies and governments need to work towards the greater moral good of this great continent! 


Martin Kelly

Director, Carrier Development & Compliance

iWheels International


On No Blah, Blah, Blah

Excellent article.


If I can add, I was at CSCMP San Antonio, disappointed that whilst I successfully selected say 10 presentations (plus 1 tour visit) to sit through without hopping around, & thought them all valuable, the downloadable versions of the other 240 or so are few & far between. In fact where I chucked in my business card at the ones I attended, I’ve had zero response. I find this inferior to APICS, although their content is way below CSCMP standards.


Should not a CD/downloadable copy of all presentations be the expected reward for a $1000 conference delegate fee?


Dave Tootill

ESCM Technology

On Direction of Diesel Prices:

What do I think will happen to fuel prices in 2007?  

The one thing I can be sure of is that whatever I guess, the opposite will actually occur.

Tom Carpenter
Director - Transportation
International Paper

On Opportunities for Technology Upgrades

I wanted to let you know how much I enjoy your column.  It is the only SC column that I’ll take time to read every time.


I spend a fair amount of time with solution providers trying to get them to leverage what today’s hardware can do.


There’s a huge disconnect between what the mobile devices can do off the shelf and how they’re being used in the warehouse. 


Most customers take a device with (500Mhz processor, color touch screen, Bluetooth, Voice over IP capability, etc) and run the same terminal emulation character screen they’ve been running for the last 5-10 years. There’s a lot of operational value to be unlocked in today’s hardware devices.


Keep it up.


Mark Wheeler

Principal, Warehouse Mobility Solutions

Symbol Technologies

On Our Video Reviews

Your video and summaries of the CSCMP conference are excellent.

I attended the conference and this is helping me share information internally.


Ken Weber

Georgia Pacific


Q. What leading wholesale drug company went bankrupt in the 1990s over a failed warehouse automation and ERP project?

A. Foxmeyer. It was the top pick on our list of the top supply chain disasters of all time.

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