This week on SCDigest:
2011 Supply Chain Guru Predictions
Supply Chain Graphic of the Week and Supply Chain by the Numbers
New Cartoon Caption Contest Begins This Week!!
New Expert Contributor: Get Your CFO On Board with Inventory Optimization
New Expert Contributor: Traceability: Why is the U.S. Out of the Loop?
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  Newsletter Archives                  Can't View In E-mail? January 13 , 2011 - Supply Chain Newsletter

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Videocast Series: Operations Rules - Delivering Customer Value Through Flexible Operations

Part 2: Achieving Lower Cost and Reducing Risk through Supply Chain Flexibility - Here are the Rules!

Featuring David Simchi-Levi, Professor of Engineering Systems at MIT

Wednesday, February 2, 2011


On-line Townhall Meeting

Understanding and Managing the 2011 UPS and FedEx Rate Hikes

Not to be Missed Event for Parcel Shippers!

Featuring Jerry Hempstead

National Retail Federation  (NRF) 2011 "Big Show" Video Review and Comment



From the Show Floor in New York City

What was that Kroger Scan Tunnel Anyways?

This Week's Supply Chain News Bites
- Only from SCDigest

Supply Chain Graphic of the Week: Trends in Ocean Shipping Capacity

This Week’s Supply Chain by the Numbers for January 13, 2010:

  • Trucking Numbers Down but not Out
  • Import and Export Prices Surge
  • Oil on March Again
  • Kroger has UPC Tunnel Vision




January 11 , 2011 Contest


See The Full-Sized Cartoon and

Send In Your Entry Today !


by Karin L. Bursa
VP of Marketing


Get Your CFO On Board

with Inventory Optimization


By by James Giermanski,


Powers International, LLC

Traceability: Why is the U.S. Out of the Loop?



Weekly On-Target Newsletter
January 13, 2010 Edition

New Cartoon, Kroger Scan Tunnel, XDock Part 2, Lots More


What did the IEEE standards organization do in 1997 that had a big impact on distribution center operations?

Click to find the answer below

Supply Chain Guru Predictions for 2011

Ok, it's time again, our annual sampling of predictions for the Supply Chain 2011 from a carefully selected panel of gurus and two of the supply chain industry's top analyst firms.

We've been doing this for a number of years now, and I will note that it is a lot harder to make such predictions than you might think. Each year, I ask a few of last year's participants back, add in some "new blood," and then we cajole and hector the group into finally sitting down and typing up their thoughts. We usually wind up with some true predictions, some thoughts on trends, some general ramblings... but it's all good.

As usual, in this column I am just picking out some of the highlights. The full text from each of the contributors will appear on our pages shortly.

Jim Barnes, president of consulting firm enVista, thinks on-demand or Software-as-a-Service (SaaS)-based solutions will continue to gain ground this year - and sees Microsoft as a growing force in supply chain software.


"As so many of our supply chain organizations have been "leaned out" - to put a nice term to it - during the recession that relooking at the skills we possess and require is more important than ever."


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"SaaS providers specifically in the area of TMS will continue to make traction in 2011. Companies are gaining confidence in their ability to utilize SaaS solutions to run mission critical business functionality," Barnes says. "We will continue to see evidence of this in 2011 for ERP, WMS and Labor Management Solutions. Supply Chain-centric, even Fortune 500 companies are effectively utilizing SaaS solutions that are hosted in the cloud… Look for major shifts in supply chain software company strategies. Case in point Microsoft is making major moves to move a number of solutions to a SaaS model. Microsoft will more than move the needle - it will shake up the space."

He also predicts companies will start to invest some of all that cash many of them have been building up in the past year.

"Supply Chain-centric organizations will increase their spending in 2011 and I predict supply chain software sales to be on par with 2007," Barness adds. " Many companies are coming to end of term or maintenance contracts with their software licenses. End of term (life cycle) and maintenance contracts plus renewed faith in the economy will motivate companies to replace legacy POS, ERP, WMS and TMS solutions."

My good friend Gene Tyndall took a more trend-like approach to his predictions, after first wondering if "we ready to accept that we really have no idea about a year ahead, and thus we should expect the unexpected, prepare for surprises, and try to somehow balance degrees of optimism and pessimism."

With that in mind, Tyndall mostly focused on key supply, chain trends, noting for example that companies are increasingly recognizing how the structure of a company's supply chain organization can have a huge impact on its effectiveness.

"More and more leaders have come to recognize that despite impressive strategies, clear processes, and powerful technologies, unless the organization, people, skill sets, and culture are all world-class, supply chain performance will be mediocre," Tyndall says. "Organizational alignment and excellence, and change leadership, are taking front seats now."

Clearly related to that, Tyndall believes companies are increasingly concerned about the skills their teams have and a "talent gap":

"Engineers, analytics, and software savvy skills are very important, but so are the abilities to interact with peers, those in other processes, executive, suppliers, and customers, on a business level," Tyndall says. "Watch how the Supply Chain universities and recruiting firms deal with this trend, because every company is concerned about its talent gaps."

I will add that as so many of our supply chain organizations have been "leaned out" - to put a nice term to it - during the recession that relooking at the skills we possess and require is more important than ever.

My friend Dr. John Langley, just recently of Penn State as some of you may know, sees the deepening interference of government in business and supply chain as a key fact of life for 2011.

"I am tempted to be nice and refer to this as government "involvement," but the truth is that governmental organizations at all levels are finding ways to increasingly impose themselves on the functioning of the business world, and thus to "interfere" with the ways that companies and markets conduct themselves on a continuing basis," Dr. Langley says.

He adds: "The natural result of this is that companies have no choice at times but to be as conservative as necessary, so as to protect financial and other types of assets that are essential to the future of the businesses," implying this has been a factor in tepid economic recovery.

"Only when business and government have a mutual respect for each other, and recognize that neither can succeed without some meaningful level of cooperation and working together, will there be a significant movement for companies to give a bright "green light" to investment and innovation," he notes.

He also thinks supply chain executives and managers must continue to improve their true global capabilities.

"Essentially, the globalization of business has created significant, new opportunities on the demand and supply sides of many businesses, but this has also created an imminent need for planning and control capabilities that span the globe," Dr. Langley says. "So, we are seeing great interest in achieving shipment visibility throughout increasingly complex supply chains, and this visibility is necessary to be a legitimate and profitable player in the global marketplace. Also, considering the global threats and conflicts of which we already well-aware, and those that are yet to declare themselves, supply chains are faced with very significant pressure to be able to transform themselves in very short periods of time."

We also had the chance to review some of the predictions from Gartner, which offers five high level supply chain prognostications for the coming year:

  • Supply chain leaders will focus on redesigning their demand management processes and technology to help drive stronger market insights.

  • Determining how to manage supplier risk will become a key requirement for leading organizations.

  • Supply chain management (SCM) technologies based on software as a service (SaaS) and the cloud will continue to gain traction, but mainly in process areas, with strong alignment to the unique characteristics of these delivery models.

  • Although in the last couple years the pendulum has swung back to favoring best-of-breed (BOB) SCM applications over ERP, supply chain leaders have identified a successful hybrid model that leverages the power of both.

  • Supply chain segmentation is gaining traction in the business, and leading companies are figuring out how to formalize the process to make it consistent and repeatable.

That's all we have room for this week, so I am making this a two-parter. Next week, we'll have predictions from Mike Regan of TranzAct Technologies, Steve Murray of Supply Chain Visions, Marc Wulfraat of MWPVL International, a little more from Gartner, and some interesting predictions from the analysts at IDC.

In two weeks, the full text comments of all our prognosticators will be published in our On-Target e-magazine.

If you missed our 2010 Supply Chain Timeline earlier this week in On-Target, you will find it here: 2010 Supply Chain Timeline. It's a fast way to review the year that was month by month.

Any reactions to our contributors' supply chain predictions? What would you add? Please send us your predictions for 2011 at the Feedback button below.


Dan Gilmore


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While it's fresh, some of the many mostly brief letters we received thanking us for our piece on the "North Pole Supply Chain Case Study," which many of our readers seemed to enjoy.

Thanks so much for this.

I’ve put your link on my Linked In site to ensure everyone reads this entertaining and insightful message. There’s a lot of good stuff in here … but I’m not sure access to magic is in everyone’s Supply Chain grasp.

Have a very Merry Christmas and a wonderful New Year.

Rick Cleveland, P.Log

Director of Programs

The Logistics Institute

Great “case study” Dan, I love it.

I just wish I can develop some of the ideas an techniques you mention in my business.


José E. Rosado C.

Logistica, Merida

Great article on the North Pole Supply Chain. I have a feeling the proper names of Santa’s assistants have some deeper meaning. Can you help me crack the code?


Dan Altorfer

United Facilities Inc.

Editor's Note:

No significance to the names. We found a web site that actually lets you put in a first name and last name, and it somehow translates those into "eflin" names. We just put in anything, but the result was nice.

Simply Awesome.

Greg Holder


Compliance Networks

Quite the survey of concepts Dan!

Tolkienesque staff member names?


Tom Mirala

Distribution Technology


I have been reading your articles for some time now and truly enjoyed this one! 

Pamela J.  Wingren

SR. Director Distribution Operations


 I don't know how you keep doing it. Another tour de force! Congratulations.


Dave Bischoff

St. Louis


Q: What did the IEEE standards organization do in 1997 that had a big impact on distribution center operations?
A: Released the first of a number of 802.11 standards for wireless communications, greatly improving cost and performance over time of RF devices in the DC (and elsewhere of course). Though true inter-operability took awhile, 802.11 was the beginning of the end for the proprietary networks that had ruled the field until then.
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