This Week in SCDigest:
Xbox Live is the Supply Chain of the Future
Supply Chain Graphic of the Week, plus more Supply Chain News Bites
SCDigest On Target e-Magazine
Expert Insight - Thinking Outside the Box by David Schneider
Guest Expert Insight - Evelyn Hum and Ray Marciano - Kurt Salmon Associates
SCDigest Introduces "Distribution Digest"
Your Supply Chain Questions Answered! This Week's Question - What are the Pros and Cons of Using Vending Machines for MRO Items?
Trivia, Supply Chain Stock Index
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February 26, 2009 - Supply Chain Digest Newsletter



Xbox Live is the Supply Chain of the Future

Xbox Live is the supply chain of the future. I’m not kidding.

Not that Microsoft itself runs the next generation supply chain for Xbox. It might, but I sort of doubt it, given the continued issues with the “red rings of death,” a condition well known by hundreds of thousands of Xbox users (including our household). I am talking about the game system itself.

Just to make sure everyone is up to speed, Xbox of course is a home gaming system that competes with Sony’s Playstation series and Nintendo’s Wei. I am not much into games, though our sales VP Jason Stegent is; he is literally a world class NCAA football competitor – on Xbox Live.

Gilmore Says:  

“You would simply click on a button on your PC and you could both start talking or chatting about a problem or issue."

What do you say?

Send us your Feedback here


There is Xbox, which uses a traditional game approach where you buy a game on CD/DVD and play it at home with family and friends. Then there is Xbox Live, and this, I am quite convinced, is in some fashion where we are headed.

I made this connection in part from the thinking I have done since we ran our review of the book “Start Pulling Your Chain,” by Nick LaHowchic and Dr. Don Bowersox last year. (See Time to Start Pulling Your Supply Chain?)

Those two laid out a vision for a supply chain that was increasingly real-time, with multi-level visibility tied directly to demand and supply. Such a world would have dramatic impacts on the supply chain processes and even how we organized companies themselves, they said.

I wrote at the time that I knew they were right, yet at the same time, I couldn’t quite grasp where things were really headed.

I have a bit more clarity now, thanks to Xbox Live.

Here is how Xbox Live works:

It is by definition a networked game. Plug an Ethernet cable in, and you are ready to go, connected to a vast community.

Create a “profile” – you can share a lot or a little information. The choice is yours.

You have rights to play different games. Some games are available just from being a subscriber. Others must be purchased.

Players can literally “see” everyone around the globe who is on the network or in a particular game.

Some players are selected as “friends.” At the start, they are likely only people you know now. You can add friends over time, many of whom may start out as strangers, but whom you get to know from playing the games.

You can see at any time who is on-line. You can filter that in various ways (e.g., friends, local, global). You can also see how good they are at different games based on scoring systems for each game (the results of your play over time), as well as their profiles.

You can invite people anywhere across the globe to join you in a game. Some games are meant to be one-on-one (e.g., football or basketball). Others are played as teams games. The team leader can ask players to join their team. Or players can ask to join a game.

There is incredible real time communication. Players wear headsets, and are linked to what amounts to a global telephone network. Everyone playing the game can talk to each other instantly, if they want. You can also have “private chat” one-on-one if you want. In other words, as the game is proceeding, you can talk with team members individually or collectively about what is transpiring. The “game” and the communication are tightly linked.

Players who demonstrate unacceptable behavior can be booted from the game.

There is more, and I may not even have all of this exactly right, but close enough. All I know is that when we added the Xbox Live subscription and my kids showed me how it worked, the supply chain potential for the basic concept hit me like the proverbial ton of bricks.

Imagine a supply chain with that level of real time visibility. The “game” of course would be supply chain execution. It could be a long-term game – general supply chain operations in a given area. It could also be a short-term game – expediting a part from China to the US, for example.

You would have your “friends” of course – your existing supply chain partners. In some cases, it would be a team game. In other cases, it would be a one-on-one process.

Based on special needs, you might decide to invite others to play. You would use various filters to find what you need based on geography, capabilities as found in a company’s profile, and the company’s score – how well they have performed in the “game” over time. Real-time “capacities” of your “team” would also be visible.

In some ways, what the score is in any particular supply chain “game” would be visible too, as measured by things like in-stock and overall inventory levels, costs, on-time delivery, and other metrics.

Perhaps the most exciting possibility to me is the real-time communications. Yes, we have email, phone, EDI, etc., now, but are you really connected to your supply chain? At an individual level, the people who make the supply chain work?

Imagine, for the supply chain processes you manage, if you could see which peers within your own company and in key trading partners were on-line – and most of them were usually on-line. And that you would simply click on a button on your PC and you could both start talking or chatting about a problem or issue. Or a supplier, carrier and customer could all quickly start talking about a given problem – the people who can actually make decisions?

We all complain that we can never seem to get to a meaningful level of collaboration in the supply chain. Just think what that type of real-time connectivity and communication would do to collaboration – especially if there was a real-time scorecard that showed how the supply chain was performing. The “plan” and execution realities could also be instantly visible.

There are challenges of course, beyond just the technology to do this. One that occurs to me is that a inventory planner at a given supplier, for example, may be part of numerous customer supply chains. He or she may have several of those trading partners that want to talk at any given time.

But I think that could be worked out.

As for the technology, many of the pieces in fact are already here. Microsoft has shown how you can add other capabilities that would turbocharge the existing visibility and other supply chain applications that we already have.

I doubt Microsoft is interested in using the Xbox Live platform to build a supply chain community, and things are going pretty well for us here at SCDigest, but if Steve Ballmer wants to give it a sho, I might just be interested.

Do you play Xbox Live? Regardless, do you see how this type of networked community model could be applied to the supply chain? Do you think it will really be possible to get there? Or is this not a good paradigm? 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: Graphical Timeline of Wal-Mart's RFID Program

This Week's Supply Chain by the Numbers - IBM Study, Teamster's Pay Reduction, Wal-Mart Miles, New Nike DC


How many ways can you say that “the news isn’t good” and “there’s little hope on the horizon?” We're running out of ideas, but here it goes.

In the software group, Descartes fell 16.3%, followed by i2 (down 10.1%).  In the hardware group, Intermec fell 6.4%, while Zebra was down a mere 0.9%.  In the transportation and logistics group, Yellow Roadway lost nearly all of last week’s gains (down 32.7%) ahead of the announcement that the company has finalized yet another sale and financing leaseback agreement with investors. (See YRC Worldwide Continues to Struggle, but Keeps Finding Ways to Cut Costs and Raise Cash.)

See full stock report.

Each Week:

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

Weekly On-Target Newsletter
February 24, 2009 Edition

Thinking Outside the Box

by David Schneider
Founder & President,
David K. Schneider & Company

Out of Stocks - You Can't Handle the Truth!

by Evelyn Hum and Ray Marciano
Kurt Salmon Associates

The Retail Supply Chain Network of the Future

Multi-Channel World Means Retail Supply Chains Must Rapidly Evolve to Optimize Inventories and Support Complex Logistics Flows

THIS WEEK ON Distribution Digest


HolsteHolste's Blog: Now May be the Time to use Free Vendor Help to Plan Future Automation System

>> Top Story: As Price for Warehouse Space Continues to Fall, Now May be Time to Move or Renegotiate
>> Gilmore: Materials Handling Vendors Work, and Spend, more than you Know to Put on a Show
>> Vendor News: Ten Money Saving Ideas to Better Manage Your Fork Trucks

What percent of US fuel usage is consumed by truck transport?

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:

What are the Pros and Cons of Using Vending Machines for MRO Items?

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We received a good number of letters from our piece on Is the UAW Really at the Root of US Automakers Woes?, which summarized the views of an ex-auto industry legal executive who said that restrictive work rules are killing Detroit’s automakers in the US.

Our feedback of the week on this issue is from John W. Scherer, CEO & Founder, Video Professor, Inc., who uses the article to offer a solution to getting the auto industry back on track. We publish several other letters as well, including one from UAW member Wayne Skutt, who says blaming the union for what amounts to about 10% of total costs is crazy.

Feedback of the Week – On the Auto Industry and the UAW:

As a veteran CEO, I know today’s economy is impacting everyone.  You won’t see me in front of Congress asking for a bailout. Like the majority of American businesses, we here at Video Professor are on our own.

Last month, Congress voted $15 billion to provide a bailout to Chrysler, GM, and Ford to keep them afloat, or in this case, on the road.

Two weeks late,r all three reported huge drops in sales compared to a year ago. They’re stuck in neutral; Congress is stuck in reverse.

The Big 3 need to change the way they do business. So does Congress. It’s our money.

The problem is people aren’t buying cars. Bailouts won’t get customers into showrooms.

Here’s a solution:

Offer a $10,000 tax credit along with 0% financing to any American taxpayer who buys a GM, Ford, or Chrysler product by April 15th, 2009. 

A tax credit benefits everyone – manufacturers, their employees, suppliers, dealers, and oh yes, American taxpayers.  Sales create revenue, which reduces the amount of taxpayer money needed from the government.  Taxpayers benefit when they file their returns April 15th.

Detroit makes great cars. I own one myself. This isn’t about quality. It’s about solutions.

President Obama expects solutions from Congress. How about helping out business and taxpayers at the same time?

John W. Scherer
CEO & Founder
Video Professor, Inc.

More On the Auto Industry and the UAW:

Let us not forget who signed these "phone book" sized union agreements! Poor management practices have also contributed to the current free fall for US auto manufacturers.

Frank Hazeltine

Absolutely, it is a major factor.  The UAW has had a .45 to the head of the auto makers for years.  How can you pay someone when you close a plant because of activity?

Richard Milhollin
Integrated Logistics Management Solutions

The size of contract that relates to work rules is tiny and very flexible. We can agree to do anything that makes sense, particularly at the local level.

I have worked in production, skilled trade,s and on Supervision. Saying our contract is the size of a phone book just shows how stupid and uneducated the media is on this topic.

GM is the employer and they set the rules. The union is there to help maintain a safe and healthy work environment in a very dangerous workplace. The union also affords us some protection from a loss of retirement and benefits that have already been stolen from many American workers.

To think that our payroll, which is about 10 percent of the price of a car, while ignoring the 90 percent which is the real problem, is ludicrous.

All of us could work for nothing and not solve the problem. You must be outside your mind to write articles making the statements that you have made.

Wayne Skutt

Once again, UAW work rules and restrictions are a key factor in the troubles of Detroit’s Big Three. Simply reducing the hourly rate to the “bare bones” of the other auto manufacturers isn’t enough. As stated in the article, it remains to be seen if the incoming Obama administration will have the resolve necessary to “convince” the UAW to make further concessions.

Regarding the proposed “card check” legislation, I believe once again, it's a slippery slope. Our country was founded on the idea of a secret ballot, wherein a constituency can vote their conscience without undue coercion or retaliation if, in fact, their voting choice doesn’t adhere to the “party” line.

John Holland


Q. What percent of US fuel usage is consumed by truck transport?

A. Despite accounting for just about 3% of total vehicle miles driven, trucking uses about 20% of the fuel.

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