This week in SCDigest:
Summary Insights from our Best Supply Chain Videocasts
Supply Chain Graphic of the Week and Supply Chain by the Numbers
Cartoon Caption Contest Continues This Week!
SC Digest On-Target e-Magazine
This Week In "Distribution Digest"
Expert Contributor: Supply Chain Comment: Finding the Value in Your Value Network
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  Newsletter Archives                Can't View In E-mail? September 29, 2011 - Supply Chain Newsletter

Featured Sponsor: Softeon



The What, Why and How of Vendor Scorecards

Moving Beyond Vendor Compliance to Collaborative Supplier Management

Part 1: Understanding the Scorecard Construction and Value of the Scorecarding Approach

Tuesday, Oct. 11 , 2011


Supply Chains in Motion: Driving Adaptability, Flexibility and Visibility

Part 2: 2020 Future Value Chain -- Strategies for a New Decade

Featuring Bob Fassett , Vice President - Consumer Products, Retail, and Distribution Capgemini North America, Dawn Andre , Director, Industry Marketing & Strategy for CPG, Life Science and Chemicals RedPrairie

Tuesday, October 18, 2011


Improving Inventory Management Across Complex Supply Chain Networks

5 Strategies for Reducing Network Inventory Levels

Based on the Recent Report from Chief Supply Chain Officer Insights
Features an interactive dialog between SCDigest editor Dan Gilmore and Cognizant's Ramji Mani

Wednesday, Oct. 19, 2011


The Fast-Response Food & Beverage Supply Chain

Accelerating Response-Time and Visibility of Supply Chain Processes with Rugged Mobile Computing

All attendees will be entered into a drawing for one of two Motorola Rugged Enterprise Digital Assistants (EDA)!

Tuesday, October 25, 2011

This Week's Supply Chain News Bites
Supply Chain Graphic of the Week: Manufacturing Value Add by Country

This Week's Supply Chain by the Numbers for Sept. 29, 2011:

  • A Lot Still Made in the USA - for Now
  • Quick Fill Ups for Fuel Cell Fork Trucks
  • Commodity Prices Tumbling
  • Truckers Planning Accessorial Strategies


HighJump Software

Innovation User Conference 2011

Video Review and Comment



September 20, 2011 Contest

See The Full-Sized Cartoon and

Send In Your Entry Today !


Weekly On-Target Newsletter
September 28, 2011 Edition

Heat on Amazon DCs, ATA Prevails on Drayage Drivers; US Manufacturing Wake-Up Call and more

Holste's Blog: Quick & Easy Ways To Boost DC Productivity Just In Time For The Busiest Season Of The Year!
Top Story: in Hot Corner after Reports of Sweltering DCs,''"Urgently'' Buys $2.4 Millon in Air Conditioners
Top Story: Gilmore, Banker, Forger offer Insights into Logistics and Warehouse Management Trends
Top Story: Cliff Holste on the Keys to Sortation System Success in Distribution

Q: Over the last 20 years, what has been the cumulative average growth rate in productivity (output per combined units of input) in the US manufacturing sector?
A: Found at the Bottom of the Page

Summary Insights from our Best Supply Chain Videocasts

Well, I am off to CSCMP 2011 in Philadelphia Sunday, and hope to see you there. If you see me walking fast down the hallway (that's just my style), please stop and say hello. I will find many of my industry friends there for sure, but love meeting with SCDigest readers at these events.

If you can't make it, we will as always be publishing our very popular daily video reviews and comments, so look for those each day next week. We will also be filming some short interviews for the new upcoming CSCMP Insights series we are partnering with CSCMP on. We already have several shoots scheduled, but if you are a CSCMP member in good standings, and especially if you are presenting at the conference, shoot me an email and we just may be able to set something up.



"Lewis said that with the previous system, they were drowning in exceptions, and even measured planners by how many exceptions that cleared per day."


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feedback here

I received a lot of good feedback on  my piece a few weeks ago on A Few Smart Ideas for Your Supply Chain , in which I summarized several insightful and uncommon ideas for improving supply chain performance that I had learned from different companies. General reader sentiment was: keep it coming.


So, I am trying this. As most know, we run a large number of what we call Videocasts, featuring many companies and experts expounding on a wide variety of topics. Yes, there is usually a commercial aspect to these broadcasts, but we work very hard (and I really, really mean that) to ensure there is a strong educational value in the programs, which are really more like TV interviews then just a video webcast.

So this week, I am going to summarize key takeaways from a few of the most recent broadcasts we have done. Think you will find it of value.


On the distribution side, I have to say I was quite impressed with the way WESCO,  a multi-billion distributor of electronics and construction products, has rapidly implemented "wearable" RF devices, trading out the traditional handheld type units they had been using for about two decades (the form factor - they had upgraded the equipment over that period of course). Everyone in the WESCO DCs is using these wearables, and as I saw firsthand, this hands-free approach drives big productivity gains. I think WESCO is zoning in too on combining the wearables with voice technology for picking and some other applications as the absolute best total approach, and I am in agreement there.


WESCO is a continuous improvement machine, about the best I have seen in distribution, and I love the "dynamic pick" approach they designed (Warrendale, PA DC manager Mike Rusnak leading much of the effort) that got rid of waves and gives pickers a lot of flexibility to grab the orders that will lead to the most productive trips. Rusnak addresses that in the QA section. Find the Videocast and/or the slides.


In part 1 of a three-part series focused on next generation supply chains sponsored by RedPrairie, Gartner analyst Matt Davis discussed the growing trend towards manufacturers developing "segmented supply chains" for different products and markets. No more "one size" fits all. So, just as an example, inventory and other decisions may/should be different for customers that want low price more than anything, and others that want service and responsiveness.


This concept has been around for many years, but just now seems to be coming into its own. One core message from Davis, who was part of implementing a segmentation strategy at Dell before joining Gartner: if you think you really only have one supply chain, you are almost surely wrong. Software, especially in supply chain execution that can flexibly drive different "workflows" based on different product/customer attributes, provides key support. Find the Videocast and/or the slides.


I have to say I was impressed with what in a sense is a new category of supply chain software from a company called ICON-SCM. "Response Management" has actually been around for a decade or so, but few (including me) had really heard the term. What does this class of software  do? Watch the Videocast to really find out, but in summary, it enables manufacturing companies to manage their existing commitments to customers versus potential/future capacity in a very smart and real-time way, using an approach that is different from most current planning system capabilities.


What is cool is that the result can be inventory reduction, but more importantly the potential to capture upside revenue and margin by more flexibly meeting new demand as it comes in that might have had to have been turned away without this insight. ICON-SCM has deeply partnered with SAP on this, and SAP is taking it to market. In the same general Response Management ballpark is the Kinaxis solution and to a degree the Agile Demand Planning System from Softeon, though it does notreach quite as far back into manufacturing. This approach can really change how a company thinks and acts on Available to Promise (ATP). Find the Videocast and/or the slides.


For a while now, it has been clear that demand forecasting and replenishment have to be run on a "management by exception basis," - planners focusing just on those SKUs that fall out of some pre-defined tolerance range or other factors. But is even management by exception too much to handle? Maybe so, said Joe Shamir of ToolsGroup on a very recent Videocast . He thinks a new generation of planning tools is needed that frankly automates even more of the process so that companies can really scale forecasting and replenishment processes.


He was supported by a truly excellent case study from Andrew Lewis, head of global planning for RS Components, another multi-billion dollar distributor that carriers hundreds of thousands of SKUs. Lewis said that with the previous system, they were drowning in exceptions, and even measured planners by how many exceptions that cleared per day. Lewis went in and asked for the money in the midst of the recession, and told the CFO that "If you give me the money now, I'll give you eight times or more of it back by the end of the year." And he did.


Lewis said a key move was segmenting his team into core forecasters and "enrichers" who improve the baseline, and took the interesting approach that he wants the company to always be on the forefront of implementing the latest and greatest technology. Find the Videocast - there weren't really any slides.

In a Videocast on reducing out-of-stocks in the consumer goods industry, IBM's very smart Dr. Michael Watson made a number of interesting points. First, that studies have shown that there is not all that much difference in forecast accuracy between the best and worst companies in any given sector. The point was that to a degree, chasing more and more forecast accuracy may not be the best solution to improved inventory effectiveness.

Second, that companies often misunderstand in thinking that "inventory optimization" is just about reducing inventory. It is often just as much about indentifying for what SKUs/locations at a given company actually tend to have too little inventory, causing lost sales, and helping companies better understand inventory and margin trade-offs.

He also showed how Lean efforts in manufacturing can often lead to inventory problems downstream, and that, in some cases, the plant is in fact the best place to buffer inventory for optimal total supply chain performance. He also made the great point that optimizing inventory levels requires decisions at different points in time, from an annual, strategic assessment of how inventory will be used to the types of system/parameter tweaks that need to be made perhaps weekly (he actually had five levels in total), and how creating a discipline in doing these reviews/changes consistently pays real dividends, but few companies do so. Find the Videocast and/or the slides.

Hope you enjoyed these quick summaries. I rethought about a few things just putting this together.

See you in or from Philadelphia next week.


Anything especially strike you from these summaries of a few key points from these Videocasts? Have an alternative view? Let us know your thoughts at the Feedback button below.


Dan Gilmore


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By Arnold Mark Wells, CPIM
Principal, End-to-End Analytics, LLC
Michael W. Okey
Manager, Global Supply Chain



More this week of the several dozens letters on Gilmore's piece this summer on A Little Supply Chain Finance 101, where we offered some thoughts an examples specifically on how reductions in inventory impact different financial statements.

Most were just brief thank yous. but a few offered some additional thoughts, including our Feedback of the Week from Bob Forshay of Transformance Advisors.

You will see his note and a selected few others below.

Feedback of the Week: On Supply Chain Finance 101:

Good to remind folks about the issues around "seeing" the way we "measure" SCM costs.

I continue to move my own thinking (admittedly not an accounting expert) towards simplicity for everyday decision making. Personally I believe it important to keep a focus on total picture, i.e. total cost vs. unit cost kind of thinking as we make decisions. To take your comments about operating capital further, the idea of turning cash over more often (a larger topic than just inventory turns) seems to escape many folks who instead focus maybe too much on cost alone which tends to support short term actions affecting the micro more than the macro with bad effects at the system level.

A classic example is of course outsourcing without first understanding all the dynamics involved. A lower unit price may result but at what "other" cost with resources required to address quality, time, distance, customer service etc.?

Interesting to note, your example shows how we can use various approaches in decision making that will achieve different outcomes. Decisions are made daily, often using a financial picture of what I would consider an incomplete picture. I think micro decisions need to be made in the context of how does it contribute positively to the C2C measure, cash to cash conversion cycle.

If we are maintaining (or improving) quality and delivery objectives and can also reduce waste, (cost), the micro actions will improve the macro of cash turnover at the system level. And then the other measures also improve. I would like to see a discussion here about C2C application.

Vice President
Transformance Adviso

More on Supply Chain Finance 101:


Good information, well articulated! I am going to share the article with my inventory team to reinforce the key concepts!

Matt O'Connor
Vice President of Logistics
Rockline Industries


I love this and I am going to share it with some of my guys when we have a workshop next week. This is a classic depiction of filling in the gaps and extending what we thought we already knew. Count on me as an avid follower and potential contributor in the future. I didn't see the video yet?

Les Morris
Senior Vice President
Strategic Customer Development
FMCG & Consumer Durables
Kuehne + Nagel


Editor's Note: We promise to release the video version soon.

It reminded me of my i2 days of working for the SOA group. When we used to present business case, we always struggled on what number to present (of course from our perspective THE BIGGER THE NUMBER, THE BETTER IT IS). Interestingly, instead of presenting the number when we used to ask our clients' CFOs or the sponsor of the SCM projects (for most of the time back in late 90s and early 00s) about his/her opinion, we used to win back a lot of credibility.

So the moral of the story is that only a company's internal leaders can estimate these numbers but not outside consultants.

Nevertheless, this was a very well written article on calculation of benefit for reduction of inventory from balance sheet

Anindya Basu
Cognitive Investments


I find myself looking forward to your editorials, sad but true!!! Keep up the good work!


Kevin O'Neill
Expense Reduction Analysts

Q: Over the last 20 years, what has been the cumulative average growth rate in productivity (output per combined units of input) in the US manufacturing sector?
A: 1.6%, according to the US Bureau of Labor Statistics; that is well above most other developed economies, and a metric that is key to long term prosperity; China’s manufacturing productivity growth has been much faster of late, however.
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