This week on SCDigest:
2011 Supply Chain Guru Predictions Part 2
Supply Chain Graphic of the Week and Supply Chain by the Numbers
Cartoon Caption Contest Continues This Week!
New Expert Contributor: Industrial Trucks…. Driving Themselves…. in my Distribution Center, What?
SC Digest On-Target e-Magazine
This Week In "Distribution Digest"
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  Newsletter Archives                  Can't View In E-mail? January 20, 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: Global Energy Picture 2030

This Week's Supply Chain by the Numbers for January 20, 2010:

  • Shanghai Surrprise
  • No End to Energy Demand
  • Factory Jobs Actually Up
  • Boeing Really Means it This Time




January 11 , 2011 Contest


See The Full-Sized Cartoon and

Send In Your Entry Today !


By Scott Friedman

Seegrid Corporation

Industrial Trucks...Driving my Distribution Center, What?



Weekly On-Target Newsletter
January 19, 2010 Edition

New Parcel Rate Analyzer,
Fascinating Energy Outlook and more


What US school was the first university to offer a degree in Industrial Engineering?

Click to find the answer below

Supply Chain Guru Predictions for 2011 Part 2

I hope you enjoyed our supply chain guru predictions from last week, featuring thoughts on key trends in the supply chain for 2011 from the likes of Dr. John Langley of Penn State University, Gene Tyndall of Tompkins Associates, Jim Barnes of enVista and the analysts at Gartner. (See Supply Chain Guru Predictions for 2011).

We are back this week with another round of predictions from the other members of our virtual panel, who also offer some provocative thoughts. Again, I am just summarizing the highlights of each guru's predictions. The full text of each expert's comments will be featured in the Trends section of our On-Target newsletter early next week.

Mike Regan is the long-time transportation industry executive currently CEO of TranzAct Technologies, who always has some interesting things to say about the state and future of logistics.


" Regan believes very few shippers are actually budgeting for increases of this magnitude. Consequently, they will likely be shocked by the numbers they see in their financial statements. "


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Regan believes it will be a tough year for shippers.

"Shippers will see freight costs (rates and the fuel surcharge) rise over the course of the year by as much as 6% to 8% as they are reintroduced to the concept of a seller's market," Regan says. "The actual percentage of increase in costs will be determined by two variables: the desirability of the shippers’ freight and the extent to which there is an economic recovery. Coupled with the increase in fuel prices, which will mean higher fuel surcharges, it is entirely possible that shippers could experience a double digit increase (10% - 12%) in 2011."

He notes that "Very few shippers are actually budgeting for increases of this magnitude. Consequently, they will likely be shocked by the numbers they see in their financial statements, which will result in awful meetings in which they scramble to explain the 'unforeseen' variances/increases to management. Shippers who think this is an unlikely scenario are not paying attention to what has been happening in the fuel markets."

He also thinks shippers will find there are real consequences from increasing government regulations, especially CSA 2010.

"The CSA initiative, which had been talked about for two years, is now a reality," Regan says. "There is no shortage of information about the CSA program, yet it is surprising how few shippers are changing their processes to mitigate the risk associated with using a carrier with an unacceptable rating. Just one accident involving the wrong carrier will provide shippers with a very costly education."

Marc Wullfraat is a long-time consultant generally focused on distribution and materials handling areas, now running his own firm, MWPVL International.

Among other predictions, he thinks in 2011 we will see "increasing oil prices, with fuel settling between $4-5.00 per gallon by year-end, and continued deflation pressure on the value of the U.S. dollar," noting that "none of these economic signals are particularly optimistic and the question is whether or not companies will respond by continuing to batten down the hatches."

Despite those concerns, Wulfraat says that "there are clear signals that capital spending will increase in 2011. One of the key areas to watch for will be the market for automated material handling systems and particularly solutions that involve the semi-automation of full case and split case order picking," - a trend we of course have been noting on the pages of Supply Chain Digest and Distribution Digest as well.

He adds that "any distribution operation with 50 or more direct labor associates should be paying close attention to the advances being made in the automation/semi-automation of the case pick area because there are some real competitive advantages emerging in certain verticals such as the foodservice industry."

Wulfraat also notes the "emergence of industrial robots for high volume full case picking distribution operations and I think we will be seeing a lot more from companies like Seegrid and Kollmorgen."

Steve Murray is a principal at Supply Chain Visions, who I have found always has some interesting insights into the state of the supply chain.

"The US is at a "tipping point," Murray believes, that will require changes to maintain the country's economic and political leadership.

The US "must begin to in-source more manufacturing capability, focus on creating demand for that capacity internally and be more competitive with global providers. And we must absolutely hold onto engineering and product development as a core competency," Murray says.

In 2011, he thinks Washington will take some actions with the continued pressure on the jobs front that will impact the supply chain.

"There will be incentives to invest in building up US capacity in ways that put people to work. There is little interest from the general population in seeing profits being paid out to executives or distributed to stockholders," Murray says. "There is growing resistance to work being offshored. The President and Congress will peddle a buy American strategy and back it up with incentives."

He also thinks that for a variety of reasons, "empty manufacturing and warehousing space will begin to get utilized. Providers of manufacturing and warehousing equipment and automation should see a direct benefit from the growth and from tax incentives for new equipment."

He adds that we will see a " capacity crunch in transportation. Truck /trailer manufactures will see demand for their products, with an emphasis on clean, fuel efficient trucks and lightweight trailers to replace older equipment."

Rich Sherman, long-time supply chain industry analyst and consultant and now at the Supply Chain Council, thinks 2011 "will be the year of the emerging 'Smart Supply Network' that converges cloud computing, mobility, GPS, telematics, and Auto ID into a paperless supply network utilizing smart transactions to convey information across the network to the appropriate parties for global flow control in real time."

This will empower "real-time analytics for integration of planning and execution to respond to demand variability at the point of consumption. Supply Chain professionals will have end to end visibility with decision support to adjust the flow of good in response to demand variation," Sherman says, noting such platforms are already emerging.

We offered some thoughts from Gartner on supply chain for 2011 last week, but the analysts there offered a separate set of predictions for global logistics from our analyst friends Dwight Klappich and Greg Aimi, among others.

Those prognostications included these two very interesting items:

  • Supply chain security has taken a back seat to cost reduction during the last three years. A major port disruption is likely within the next five years, however, which will force SCM organizations to formalize risk management.
  • "Co-opetition"— notably, partnering with potential competitors — will become a transformational SCM strategy, allowing early adopters to move beyond incremental performance improvements.

We also received a number of interesting predictions from the analysts at IDC Manufacturing Insights, who believe that in 2011 companies will recognize the "inherent complexity" in their global supply chains, and thus "will look for ways to drive out unnecessary complication through segmentation, simplification, and the use of business intelligence."

While there is inherent complexity in rapid lifecycle, global supply chains, IDC says thar "complication has also been the result in business process, IT applications, and inefficient decision making."

IDC also believe that in 2011 "Factory investment will be driven by capabilities rather than capacity."

Today, "Manufacturers have the capacity but not the capability to fulfill customer needs and to manufacture new products at the speed of innovation," IDC says, and will invest to better meet variable customer fulfillment needs globally and producing innovative products at the pace the market dictates.

Ok, that's it for round 2 - another set of very interesting predictions and observations. Again, full text comments from all the contributors in On-Target next week. Hope you enjoyed them as much as I did.


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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We had quite a few letters on our piece summarizing Donald Trump's views on offshoring and our relationship with China.

Most were short and agreed with Trump, but we had a number of views, including some we couldn't print either because they were a bit over the top, or readers as theat they not be printed because they worked for companies offshoring production.

Here is a sample below, including our Feedback of the Week from Max Tenk. They are all below.

Feedback of the Week - on Trump on China:


Imposing an import duty would eventually force US consumers to purchase locally manufactured products which "should" result in increased manufacturing jobs. But is 25% enough to make it for more expensive? Ccorporations are still outsourcing jobs to China/Vietnam/India for greater profit margins with total disregard to its social responsibility (i.e employing some locals), because the end product is no cheaper to the consumer than when it was being manufactured in the US. 

Consumers need to start boycotting "imported" products, this will eventually drive corporations to return. (No Sale / No Profit).  If consumers boycott there is nothing the Government or the Chinese can do (and no trade war....) we manufacture and consume everything internally and I have a feeling most countries will do the same as its not only the US with this problem.  

Government can help by forcing manufactures to "show" what / where / how each product is made and let the consumer decide. If one large corporation is boycotted, it will drive prices down and force them for the interim, to reduce profit and return home, the others will follow the minute we start buying American as their profits begin to evaporate.

Max  Tenk


More on Trump on China:


Did the Donald think about the US Bond Debt to China? Wonder why the politicians are walking a wide circle around China in terms of momentary rates and trade imbalance? Guess what none of these things happened recently, it’s been building for years (and including the Clinton administration). In short, greed was the culprit now the US is facing some hugh issues that aren’t in favor of hard negotiation skills. Maybe he needs to start practicing his Mandarin!

Jerry E. Durant
Chairman Emeritus
The International Institute for Outsource Management


This article reminds me that there are only 3 ways for a country to produce wealth - farming, mining, and manufacturing. Everything else is just moving money from one pant pocket to another. Companies talk about "strategic sourcing" too as if they've discovered something new, but it isn't strategic if everybody else is doing it.


I totally agree with Mr. Trump. Tariff, why not? Why do US politicians act so surprised when asking why did our jobs go over-sea? US Business leaders make more money shipping jobs outside the US. It’s up to our American Elected Politicians stand up and say let’s take away the incentive to sends jobs over seas and outsourcing; let’s tariff. What’s the alternative, do nothing? Who would complain about our tariffs, other countries that benefit from our loss? To be respected in the world, we should take care of our family, the US, then we would have the strength to help the everyone else.

If Mr. Trump is sincere in his believes, I hope he does run for office. His sound business ideas would resonate and perpetuate for the good of our country. Trump, why not?


Eric Lahoda


I like this article so much that I would like to extend an invitation to Donald Trump to highlight this article on KTALK Radio AM630 - The Voice of Utah with The Maxon Show.



Josh Hipple



The US is not so much being run by stupid people who don't know what they are doing but by stupid people who have to do what they are told by the people who have lent them so much money that the US will never be able to repay. Therefore they are puppets on strings of the ones who control them and control world finance.

Ross Naddei
Megapulse Australia


An America Lost in Squanderville.


The United States’ trade gap is the proverbial “leak-in the-dike” with its de-simulative effect on our recovery. In November 2003, Warren Buffett in his Fortune, Squanderville versus Thriftville article recommended that America adopt a balanced trade model. The fact that advice advocating balance and sustainability, from a sage the caliber of Warren Buffett, could be virtually ignored for over seven years is unfathomable. Media coverage that China has kept it currency undervalued is a gross understatement, it has actually been keeping the U.S. dollar over-valued; which adversely affects all U.S. trade with all U.S. trading partners, not just trade with China. Until action is taken on Buffett’s or a similar balanced trade model, by the powers that be, America will continue to squander time, treasure and talent in pursuit of an illusionary recovery


HJ Campbell


Q: What US school was the first university to offer a degree in Industrial Engineering?
A: Penn State, which started its IE program in 1909. IE-based courses had been offered in Europe prior to that, but it is not clear if any colleges there offered degrees.
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