This Week in SCDigest:
Best 10 Quotes of CSCMP 2008
Supply Chain Graphic of the Week, plus more Supply Chain News Bites
SCDigest On Target e-Magazine
New Blog - Gilmore's Daily Jabs
From RetailWire: Grocery Wholesalers and Retailers Cutting Transportation Costs
Expert Insight - Managing SCM Performance by Kate Vitasek - What's in a Word? It Matters if it's 3PL
SCDigest Introduces "Distribution Digest"
Your Supply Chain Questions Answered! This Week's Question - Task Interleaving in WMS
Trivia, Supply Chain Stock Index
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October 23, 2008 - Supply Chain Digest Newsletter

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Best 10 Quotes of CSCMP 2008

After our CSCMP 2008 show review and comment a couple of weeks ago, this week I thought it would be fun to pick out some of the most interesting quotes I heard coming out of the sessions.

(1) Let’s start with one from Ralph Drayer, former chief logistics officer at Procter & Gamble, during a panel discussion on technology: “At P&G, we decided to stop being so company-centric, and start being customer-centric and demand-driven. We found when you do that, some amazing things happen.”

I bet lots of companies would experience the similar revelations if they really started to build their supply chains and programs from a customer-centric point of view. Traditional ways of doing business are very hard to break – but look how P&G has prospered from changing its “belief window.”

(2) From Bill Copacino, formerly head of Accenture’s consulting practice and now CEO of technology company Oco, on the same panel: “Who really has the fundamental information they need to manage their supply chain effectively? Take cost-to-serve, for example. Most companies don’t have good information there. That goes for product profitability, customer profitability, etc. Most companies don’t have that.”

I agree that few if any companies really have such data. Is that level of information and more really essential to managing supply chains effectively? Yes and no. Most of us might say we are awash in data. Yet, most companies are also working to improve supply chain visibility. What I agree with is that almost everyone lacks information that can really show how the supply chain is performing – and what it can be doing to better meet customer or company needs – from a 10,000 foot view, looking holistically at all the inter-connected parts. Our supply chain information views are mostly narrow in scope - more trees than forest.

(3) One more from this panel, from Joe Andraski, formerly a supply chain executive in the consumer goods industry and now CEO of VICS:  “So often we bring in a new person into a supply chain job with little or no training and expect they can just do the job to the same level the prior person did.”

Contrast that approach, for example, with the story I heard this week during one of our Videocasts from Ron Berg, Sr. VP of Inventory Management at United Stationers. Berg described a detailed, 6-month training program that all new inventory planners go through after they take the post. In my experience, most companies are closer to the approach Andraski calls out. His point is that if that’s your way, you shouldn’t be surprised at a decline in performance.

Gilmore Says:  
"With all the current concern about risk mitigation, it is critical to start “looking around corners” and trying to foresee problems before they fully emerge. "

What do you say?
Send us your Feedback here

(4) From James Morton of CapGemini, during the annual 3PL study presentation: “Reducing carbon emissions always results in lower operating costs” in manufacturing and logistics.

Is this really true? If yes, it is a very interesting proposition. The point was made that lower operating costs don’t always translate into ROI from the Green investments, which might be too high for the benefit, but I still wonder if this is really accurate, or even most always accurate. I will do some follow-up.

(5) From Tom Covelli, Sr. Director of Supply Chain Management at McDonald’s, on their decision to take control of inbound freight: “A lot of transportation decisions were being made, and they weren’t always in the best interests of McDonald’s.”

The basic message whenever you are relying on partners: “trust, but verify.” It also points out that if there is no real incentive for someone to make the optimal supply chain decision, then the chances of them doing so consistently are small.

(6) From Eric Pettersen of Continental Mills, on one of the key strategies the company used when it also decided to take control of inbound transportation for the first time: “Look at others who have done this and steal shamelessly,”

The point is simple and obvious, yet one we so often forget. Why re-invent the wheel? Whatever you are trying to accomplish, other companies and maybe lots of them, have done it before you. Most will be glad to share what they have learned. For whatever reason, there is often a personal reluctance to take this route in favor of a “we’ll figure it out ourselves” approach. This is generally foolish. Pettersen is right on.

(7) From Robert Martichenko of LeanCor, on the type of questions he asked distribution associates when analyzing performance during a project for a Zeiss Optical DC:  “Why do you look tired and haggard at the end of a shift? “Because I walk 9 miles a day,” was the answer. But then you have to ask: Why do you walk nine miles a day?”

This thought process really just represents the basics of Lean and value stream mapping, but how many of us in any area of the supply chain really ask these most basic questions, especially of lower level associates, and keep asking the next one until we get to the root of the issue? If I were a DC manager, I would put that quote on a wall somewhere to remind me of the mindset needed for continuous improvement and concern for the workforce.

(8) From Fran Townsend, the keynote speaker on Day 1 and a former US government official in the area of national security: “Part of what you need to do in the supply chain is to help your company anticipate events, and understand the environment you operate in – physical, political, economic – around the globe.”

Like we need more work in the supply chain? But, her point was that with all the current concern about risk mitigation, it is critical to start “looking around corners” and trying to foresee problems before they fully emerge. The reality also is that in a global world, the supply chain often will have the front line antennas in terms of monitoring developments in areas where you source or sell products.

(9) From Day 3 keynote speaker and author Jack Uldrich: “Nano technology is going to change material science…It’s hard to think of an industry that won’t be dramatically impacted by nano technology.”

I will admit to being behind the curve here, but this was a wake-up call for all of us to understand this and other technology developments that will impact our companies and supply chains.

(10) Finally, from Art Mescher, currently CEO of Descartes Systems, during his comments after receiving the 2008 Distinguished Service Reward: “As supply chain professionals, we are now chartered with managing a global set of resources in motion. Our scope is expanding once again. People, resources, truck drivers, field services workers, merchandisers, warehouse workers. All resources in motion.”

I’ve had this conversation with Art in the past, and I think he is right – an evolving but seismic shift is occurring – we are increasingly operating in a world where the supply chain must manage goods (and services) not sitting in a distribution center but constantly in motion, requiring a whole new level of visibility systems, synchronization techniques, and (most importantly) management skill sets.

Wow. Long live the supply chain.

Which of our list of top CSCMP’s quotes caught your attention, and why? Are there any other quotes that struck you at the conference? Let us know your thoughts at the Feedback button below.


Let us know your thoughts.


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This Week's Supply Chain News Bites Only from SCDigest

Supply Chain Graphic of the Week - Value Drivers and Supply Chain Strategy

Supply Chain by the Numbers: October 22, 2008


Wall Street performed a dizzying act of extremes last week with virtually no ray of hope that stability is just around the corner.  Our Supply Chain and Logistics stock index results were all over map.

In the software group, Logility was up 10.2% from last week’s low of $5.20 a share.  In the hardware group, Intermec fell another 11.1% for the week and is now down an even 42% for the year.  In the transportation group, Yellow Roadway fell another 40% last week – now down 84.3% for the year. 

See stock report.

Each Week:

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

Weekly On-Target Newsletter
October 21, 2008 Edition

Gilmore's Daily Jabs

Are Bigger Supply Chains Better?

Report Says Bigger Companies Have Better Supply Chains; Is that Right? Is Technology Adoption the Difference?

Managing SCM Performance
by Kate Vitasek

Supply Chain Perspective: What's in a Word? It Matters if it's 3PL

BrainTrust Panel Discussion Question: Where Do You See the Greatest Opportunities for Grocery Distributors to Reduce Transportation Costs?

Grocery Whole-salers and Retailers Cutting Transportation Costs

THIS WEEK ON Distribution Digest
>> Holste In Tough Economic Times, Does it Make Sense to Hire a Materials Handling Consultant?
>> As New Data Collection Technology Emerges, Warehouse Management Systems Begin to Change
>> ToolsGroup Announces New Program that Promises Rapid Reduction in Inventory Level

Q. What are the "3 P's" of intelligent task assignment in a Warehouse Management System?

A. Click to find the answer below

Have supply chain or logistics-related questions you need answered?
Ask our panel of experts. Share your insight!

Featured Question and Answer:

Task Interleaving in WMS

Your article on task interleaving in a distribution center was excellent, but I have a follow up question. Which is mathematic algorithm that a WMS uses to do this optimization?

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Feedback continues to pour in each week – but we want more and, with this in mind, are pleased to announce our new “Fuel for Thought” program. If your response is selected as our Feedback of the Week, we’ll send you a $20 gas card. Must have complete name and company, and you can only win once every three months. Send in your Feedback regularly! Make it thoughtful if you would like to win.

A few more letters on our First Thoughts piece on “The End of a Supply Chain Software Era,which commented on the acquisition of i2 by JDA. As you will see from these letters, those go-go days of the late 1990s and early 2000s were really almost hard to imagine today. Larry Davis, who has our Feedback of the Week, is now at Yamaha but was in the thick of it back then as a consultant for IBM, he says.

You’ll find several other interesting letters on this topic below. We are almost ready to begin awarding our first Fuel for Thought gift card rewards – we are going to start giving this Feedback of the week prize for letters received after we announced the program on September 11.

Feedback of the Week - On The End of a Supply Chain Software Era:

Loved your article on the i2, Manu landscape from the late 1990s to early 2000s.

I was in the middle of that in 2000--2002 as a consultant for IBM Global Services. We backfilled the rationalization and implementation space for i2's products. The basic concept was to create a value proposition through an SOA (Strategic Operations/Opportunity Assessment), and design software on the fly to address achievement of that value prop.

Can't say I have ever seen a fever as it existed back then, unless it is the latest fad, Saas. Love the concept of Saas, but the first major hacking event that occurs, and it will, on a database being maintained by say, well...

Larry E. Davis
Supply Chain Manager
Yamaha of North America

More on End of a Supply Chain Software Era:

As a successful European retailer of fast fashion product, we have selected a 'small company' inventory optimization product (from Quantum Retail), which the big players came nowhere near in terms of matching the innovative science or fit to our business model.

This would appear to be a niche, albeit a sizeable one, which I'm not sure could not be filled through organic growth if the company is smart enough, with a strong enough vision of where they want to go to. These innovators can do this as they can be nimble, they don't have the baggage of legacy, and they can start from where the customer now wants them to be, not where the last release left them.

Chris Gates

Response from SCDigest Editor Dan Gilmore:

I did not mean to imply a small supply chain software company could not grow into larger one organically, but rather that if it started to, it would be viewed as enough of an opportunity/threat for one of the large companies that they would simply buy it rather than have it continue to grow independently.

Since most of these small firms have venture capital funding and investors who want to cash out, the chances of resisting such offers are almost nil. That is what will make it hard for a small software company to grow into a large one. There is a size they reach -- thinking as noted capping out at about $50 million, and often lower --where they become too attractive as a takeover candidate. That is a relatively new reality not true in the 1990s.

Dan Gilmore

I am going to miss i2 as it was the market maker, and had a great promise until it lost direction. I wonder what would have happened different had it stuck to its core ideas and driver-- SC optimization-- and not gotten greedy. Would it still have been acquired eventually?

I wonder what is in store for some of the smaller SC software companies.

Always great to hear your take.

Manish Dayal

It is indeed the end of an era and something of a sad day.

We are a customer of i2 and have been for some time. You are perfectly right that the ambitions and intentions of the company are very advanced - but have been sometimes ahead not only ahead of their ability to execute but often the ability of their customers to execute. That is why they tend to me most successful with the most advanced supply chain companies.

If you have been around the supply chain industry for awhile it is hard to imagine there not being an i2.

Director of Supply Chain Planning
Electronics Company
Name withheld by Request


Q. What are the "3 P's" of intelligent task assignment in a Warehouse Management System?

A. Permission (is the operator allowed to do the task and using the right equipment?), Proximity (how close are available tasks?) and Priority (what needs urgently done?).

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