This Week on SCDigest:
Twas the Night before a Supply Chain Christmas 2009
Annual Supply Chain Research from Gartner and SCDigest
Supply Chain Graphic of the Week, plus more Supply Chain News Bites
New Cartoon Caption Contest Posted - Show Us Your Wit!
  SCDigest On-Target e-Magazine
Guest Expert Insight - Food Traceability: Supply Chain's Feast or Famine
Guest Expert Insight - Wright State University's Master of Science in Logistics and Supply Chain Management Delivers Direct and Relevant Business Value
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Supply Chain Graphic of the Week:The Lippitt Model for Change Management


This Week's Supply Chain by the Numbers - Nike's Lean Inventories, Sharp's Lower Costs, Copenhagen CO2 War Chest, Timberland Reduces SKU Count 



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Wall Street investors saw predominately downward movement in stock values last week and our Supply Chain and Logistics stock index followed the same trend.

In the software group, JDA fell 5.9%, followed by Ariba (off 5%).  In the hardware group, both Intermec and Zebra were down for the week (1.6% and 3.9%, respectively).  In the transportation and logistics group, Yellow Roadway fell another 24.6% (below $1.00 a share) as many analysts are predicting that bankruptcy for the trucking company is inevitable.  

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Global Supply Chain
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Guest Column

by Jim Burleigh, SmartTurn


Food Traceability: Supply Chain's Feast or Famine

Traceability Leads to Real-Time Visibility and Collaboration; Financial Benefits Quickly Follow


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by James Hamister. Ph.D.,
Wright State University


Wright State Univer-sity's Master of Science in Logistics and Supply Chain Management Delivers Direct and Relevant Business Value

Program Delivered in Blended Format Geared Towards Working Professionals


HolsteHolste's Blog: Warehouse or Distribution Center: What Is It – Really? 

Top Story : Selecting Labor Management Systems


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Why is "Black Friday" (the day after Thanksgiving) called that - and what is the alternative meaning for some consumer goods manufacturers?

Click to find the answer below
Twas the Night Before a Supply Chain Christmas 2009

As always, a little fun this year at the holiday season.

I first ran a "Twas the Night Before a Supply Chain Christmas" in 2006 (a knock off, of course, of the original classic verse by Clement Moore), and frankly thought I could simply re-use it this year almost as is.

After taking a look, I realized I was sure wrong.

2006, as it became clear, was a very different time. So, I offer a revised edition for the very strange year that was 2009. Some of the original was retained, but lots of new stuff reflective of the times has been added.

Hope you enjoy.

Twas the Night Before a
Supply Chain Christmas 2009

Twas the night before Christmas, and I was alone in the DC.
This was the strangest year in Supply Chain I ever hope to see.

Our performance reports were hung by the office with care,
But in this kind of year, it was more hope and a prayer.

As VP of Supply Chain, I must lead the ship,
But 2009 was sure a year I could skip.

Recession, depression, a “new normal,” they say,
I’d love to find someone confident they now know the way.

My focus this year was largely to cut, cut, cut, cut;
Did we take it too far? In truth I say Yes in my gut.

Demand volatility is a new fact of life;
While we chopped inventories with a rather blunt knife.

As we took a look at our network, we now all realize,
There is much opportunity to re-optimize.

“Less fixed cost, more variable,” our CEO insists.
But is an “accordion supply chain” not without risks?

As I sat and pondered this year and next, there quick arose such a clatter,
I thought a bay of reserve rack falling down was the matter.

I jumped into my personal Cushman, raced past each and every dock door,
Towards the back of the DC – what would I find on the floor?

But as I swung round bulk storage, I saw I had nothing to dread,
For there sat St. Nick, on a new Crown truck, green and red.


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The red matched his bright suit, which could not have been finer,
Though a small tag in the back did say “Made in China.”

He was hanging some stockings from the racking’s first beam,
And I could see on each one the names of my supply chain’s first team.

On a pallet sat a big bundle, which he grabbed with a laugh,
And I wondered what Santa could have in store for my staff.

He said, “I brought you the gifts that will help you to achieve,
Supply chain excellence and agility in 2010, I believe.

“For your head of global logistics, finally some real software has landed;
Today they fight global trade management challenges simply one handed!

“Your forecasting head will like “demand sensing” tools quite a lot;
No ones quite sure what they are...but they really seem hot!”

“For your director of transportation, a real-time load optimizer,
And carrier bid tools, so your freight contracts are wiser.

“For your inventory team, I can remove much of their pain,
With inventory optimization across every echelon in the chain.

“Your DC manager will like the voice pick system she’ll be receiving,
And an advanced WMS that supports task interleaving.

“For you, a new Supply Chain dashboard, with all the metrics you want,
So you can see by the second who’s performing, and who’s not!”

Then he paused for a second, and put a finger to his lips,
Reached in his bag, and pulled out a fistful of chips.

“And the greatest gift of all, as I’m sure you’ll agree,
Is for everyone, everywhere – lots of RFID!”

He dropped the tags in the stockings, turned round with some flair,
Pushed a button on the Crown, and it took off in the air!

“Thank you Santa,” I shouted, “These are really great tools!
But we’ll need help to deploy them, configure business rules!”

Santa yelled, “Yes, the value from tech is sometimes not resultant.
But my elves are just coders – better hire lots of consultants!”

And I heard him exclaim, as he floated high above,
“Yes supply chain’s sure hard, but it’s the business we love!”

Hope you enjoyed our little verse.

We will be mostly off until January, though will publish On-Target next week and certainly cover any breaking news.

We had a great 2009 at SCDigest, and have even more planned for 2010. Some new news early January.

Have a wonderful holiday. We'll keep working hard for you in 2010.

BTW, latest cartoon caption contest on right side of this newsletter! Send in your captions! First one was lots of fun. Pattern will be new cartoon, the winners the following week, new cartoon, etc. The cartoon will be posted first on our home page every other Monday, then in that week's main newsletter.

Did you like our Twas the Night Before Christmas 2010? Any recommendations for SCDigest? Let us know your thoughts at the Feedback button below?

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More of the many letters we received on our piece on Saving Western Manufacturing, Part 2, most (but not all) of which think Western manufacturing must be saved. That includes our Feedback of the Week from Arrow Plastics’ Victor Romano, who says its time for tariffs.


You'll find that and many other views below.


Feedback of the Week – On Saving Western Manufacturing, Part 2:


I don’t think we are losing the ability as much as we are the desire to do large-scale manufacturing in this country. It’s more about the bottom line than it is sustaining an economy.


It is extremely important that we retain this ability to be competitive in a global market place. How else will we feed people without sustainable jobs and that has always been mfg. We have always been on the leading edge of technology, why should that change.


Most may not want to hear this and all I can say is that we need to impose tariffs and duties on imports that level the playing field for American mfg. Do that and you’ll see what American ingenuity can do, just like in the past. We are still a nation that takes pride in its accomplishments and innovation. Where have most of the advancements in society come from over the past two hundred years? From light bulbs to medicine, refrigerators to air conditioners, television to computers. Sounds like America has helped make many people’s lives easier.

Who, but maybe Japan, has contributed as much? And we helped Japan become the leader they are in technology, we just weren’t smart enough to listen as intently as they were to the engineers in this country, so they took the knowledge to someone who was.


Victor R Romano

Warehouse Manager

Arrow Plastic/Illinois Bottle Manufacturing Co.

More on Saving Western Manufacturing, Part 2:


You inspired me to finally put fingers to keyboard and write about a topic that I’ve had on my whiteboard for quite some time: ‘Have We Mis-interpreted What it Means to be Green?  Globalization vs. Re-localization…The impacts to the Supply Chain Eco-System.’

Should U.S./Western Manufacturing be saved?…Yes.  Why?  National security, job protection and product traceability for all the obvious reasons, but I believe sustainability practices holds the key.  Is it going to take government policy (such as tariffs and/or carbon cap-and-trade policy) to compete with offshore labor costs? Quite possibly, but the true issue is product and supply chain design.  As much as we in the industry like to tout that supply chains are multi-directional (or dare I sa, an eco-system), a majority of the world’s supply chains remain linear.  Yes, returns are part of the reverse supply chain flow, but essentially raw materials are mined/created/refined, handed off to manufacturing to create finished goods, stored, sold, consumed and then off to its final resting place…the landfill.  All at a cost to the environment and enterprise.

I believe there’s a significant amount of savings on the table if supply chains and products are designed with reuse in mind.  Some industries are beginning to crack that nut.  Take, for instance, the carpet industry.  The trend is to move towards square-foot/square-yard pieces, which can be individually replaced when worn or damaged, sent back to manufacturing to be melted down and resold as new carpet, all while being cost effective.  Then, there’s HP’s refillable/reusable ink cartridges and returns process.  Finally, The Coca-Cola Company and Coca-Cola Enterprises are both investing heavily on recovering and recycling packaging materials.  For goodwill? Sure, but really for bottom-line savings.   

Is it more difficult to justify when fuel is cheap - yes, but that’s where a cap-and-trade system comes into play (which I think is inevitable policy to wean the U.S. off of foreign oil and to reduce carbon emissions).  Think of the emission offset of recycling 2 billion, 20-ounce coke bottles a year.  That’s a nice tax break, but the real shortcoming is comparing apples to apples.  What is the true cost of doing business/manufacturing overseas (management, materials, labor, traceability, transportation/port costs, lead-times, safety-stock, and tariffs) compared to doing business/manufacturing in the U.S. (materials - reused/recycled and related carbon credits, labor, traceability, lead times, safety-stock)?  Plus, with ongoing intelligent LEED facility design and development (manufacturing and distribution), these cost savings will further justify US manufacturing.  TI proved this point when it built its semiconductor facility in Texas.

I must say, a few recent readings have inspired me.  For a little bed-time reading, check out Natural Capitalism: Creating the Next Industrial Revolution.  Why not apply these concepts to supply chain design?  My $.02…


Jeff Gantt

Product Management
Manhattan Associates In

I’m a 20+ year manufacturing veteran with emphasis on supply chain. Due to the rise to power of the party that absorbed the Communist party in the US, and the apparent ineptitude or apathy of the opposition to stop the Socialist tide that began almost 80 years ago, I have found myself thinking what would have never crossed my mind 20 or even 10 years ago.

I’m thinking about what country might be a good one for a manufacturing/logistics professional to work in. In other words, I no longer see a compelling reason to stay in the USA! I feel almost like a microcosm of what manufacturing businesses have been facing during the past decade. The hand is writing on the wall, “Find work in a developing country where they value your skills."

It’s not that I do not love my country. I simply find it hard to seek the“American Dream” when so many slackers are designated a “protected class," and anyone who has the audacity of hoping to earn over $250K annually is demonized as an evil, rich capitalist.

Everyone knows the US has the 2nd highest corporate tax rate in the world. What most don’t know is that the highest is in Japan – and we’ve seen how their economy has done for the past two decades. This is the 1st time I’ve ever written you. The next time might just be from Panama. (My Spanish is much better than my Mandarin).

P.S. The opinion expressed herein is strictly my own, and should not be construed to reflect my employer’s position on the matter.

David J. Gaskill, CPIM, CIRM
Manager - Logistics Planning

Toto USA

I think the problem goes way beyond manufacturing.  You quote the BW article line “invented here, industrialized elsewhere."  Whether manufacturing in China to get lower costs or to address the potential Asian market, manufacturing is soon followed by engineering, which, in turn, is followed by inventiveness.

If we do nothing to address this loss, the USA will ultimately become a second or third-world nation of consumers.  I recently saw a quote that the U.S. is or has lost its global leadership role as a result of the financial crises.

Steve Murray

Principal Consultant and Chief Researcher

Supply Chain Visions

I don’t know why people are worried too much about manufacturing? Do you think only low cost works forever? If so, then people work in developing country, & after some time, retired & live in developing country where living cost is low & they are not doing so. So consumer is the same people who like quality of life & new era is to marketing of quality. Since from centuries, only quality producers survive & I am for sure they will survive in future too.

Now, there are other factors than low-cost labor in manufacturing, like minimizing waste, better planning to better utilization of resources & reducing inventory, collaboration & co-operation to work towards reducing cost of supply chain whole, starting from performance-based design to convenient moving & storage packaging.

Take an example of Walmart, how nicely they are leader in implementing & gaining fruits of supply chain management. They integrated & implemented together their supplier, information technology, reducing waste, use of local resources, etc. Like Japanese, we also can gain by lean manufacturing, which ultimately helps in low cost + surviving manufacturing industry.

Mehul S. Pandya
Award Windows

It is one thing this administration does not understand.  We cannot bring manufacturing (and service jobs for that matter) back here by repeating “I want a pony, I want a pony, …".  The US has the second highest corporate tax burden in the world.  Add that to onerous environmental restrictions, it is no wonder we have not added to our manufacturing capability in the USA. 

This must be fixed if we are to be competitive.

Having said this, remember that in the 80s and 90s, we thought everything would go to Japan, which it did not. Japanese salaries went up, tax burdens went up (they have the highest corporate tax burden in the world) and they shifted production offshore, even to the USA in the case of cars.

Steve Tremmel

Quality Assurance Manager

Cirrus Logic


Why is "Black Friday" (the day after Thanksgiving) called that - and what is the alternative meaning for some consumer goods manufacturers?


The term originated because "back in the day" it was only after the big shopping day on that Friday that some retailers become profitable ("in the Black") for the year. Some consumer goods manufacturers have referred to "Black Friday" as the day merchandise must be on its way to retail DCs, or the goods are unlikely to make it to the store shelf in time to be sold before Christmas.