sc digest
December 13, 2012 - Supply Chain Newsletter

This Week in SCDigest

bullet No Supply Chain Blah, Blah, Blah 2012 bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic of the Week and Supply Chain by the Numbers bullet Holste's Blog/Distribution Digest
bullet Cartoon Caption Contest Continues! bullet Trivia
bullet New Supply Chain By Design and Expert Insight bullet Feedback


Which WMS Would You Rather Use?

  first thought


Supply Chain Graphic of the Week:

Who is Doing What in Multi-Channel Fulfillment?

Supply Chain by the Numbers for Week of December 13, 2012:

  • eBay Drives Same Day Delivery
  • Michigan Makes 24
  • What Kind of Green Do Developing Economies Really Want?
  • Fred Smith was Smiling on Monday


Which WMS Would You Rather Use?


December 3, 2012 Contest

See The Full-Sized Cartoon and Send In Your Entry Today!

Turning Data Integration into a Financial Driver for Mid-Sized Companies

Holste's Blog: Sales Promotions & Easy Return Policies Drive Sales Volume

Weekly On-Target Newsletter:
December 12, 2012 Edition
Multi-Channel Fulfillment Summary, SCM Transformation, Doha Dud and more


Closing the Gaps in S&OP


Major Questions being Addressed: How far have companies really taken Sales and Operations Planning? Are best practices really being adopted? What types of results are companies really achieving from S&OP - or not?

Can you please help by taking this quick 10-minute survey? All respondents will receive a summary of the data in just a few weeks.


Very different from every other S&OP survey, we promise.

6th Annual Gartner-SCDigest Supply Chain Study
It's time again!

We ask for your help.



Should You Source from China or the US? Why Not Both?
By Dr. Michael Watson

Driving Sustainable Service Parts Management - The Last Mile in Brand Loyalty
by John P. Reichert
WMS Product Marketing Manager

Demand Planning at the Sub-SKU Level

by Karin L. Bursa
Vice President of Marketing


What software company back in the 1980s was the first to implement a Distribution Requirements Planning (DRP) capability into its solution?
Answer Found at the Bottom of the Page

No Supply Chain Blah, Blah, Blah 2012

It's time again.

Eight years ago, I wrote our initial (and somewhat infamous) First Thoughts piece on "Let's Stop the Blah, Blah, Blah." The basic theme: too many presentations at various conferences and other events don't say enough of real value. The jab was aimed primarily at speakers from the consulting, academic, solution vendor, author, and sometimes even the analyst community. This group, as we've noted before, too often tends to be focused on sound bites and restating the obvious, rather than delivering real insight.



"I welcome your nominees for any outstanding presentations you had a chance to see in 2012."


Send us your
Feedback here

As always, I include myself in the category of those speakers who risk blah, blah, blah-ness at times, and recognize how hard it is, especially if you speak frequently on different topics, to avoid it now and then. I fully admit to falling into blah, blah, blah territory on occasion.

All that said, I offer again our Audience Bill of Rights, which offers some reasonable guidelines for what you should expect and demand from presenters. We have even heard of conferences where organizers are now using this document in communicating with speakers.

As I sat down to write this, I at first felt like my conference schedule was very light this year, but upon further reflection my view is that while it might have been down a little, what really happened is that I went to quite a few events in the Spring, less than usual in the Fall, and that affected my perspective here at year's end.

In rough chronological order, I attended the National Retail Federation's Big Show, the new MODEX event from the Material Handling Industry of America that in effect replaced the North American Material Handling Show, the Vendor Compliance Federation (VCF) Spring conference, CSCMP Columbus roundtable Spring meeting, the Warehouse Education and Resources Council (WERC) annual conference, NRF's supply chain conference, MIT's advance manufacturing conference, the user conferences of HighJump Software, RedPrairie, JDA Software and (in the Fall) Logility, and of course the annual CSCMP conference.

If I was at your event and have somehow not been able to track it down, please let me know. I would surely have attended the Institute for Supply Management (ISM) conference, but as usual of late it exactly overlapped with WERC and this year also the MIT event, so I just couldn't get there even though it is always quite good. Had invites to speak at other local CSCMP roundtable meetings that I just couldn't quite make happen. For reasons I can't even remember I didn't make it to NASSTRAC

Before I move to my list of this year's best presentations, I will simply say this: when I sit down every year to do this list, there are some presentations that simply jumped to my mind instantly. Those are the ones that become candidates for presentation of the year. Others I have to go back and do some digging from my notes.

So, in random order, here are the best presentations I saw in 2012, capped by SCDigest's runner up and best presentation awards. To the best of my knowledge, all those cited are still with their companies at the time of the presentations, but of course that could have changed for some of them.

Mike Rescigno of Rescigno Logistics Group (and a former Belk's store chain executive) at the VCF conference on how all sorts of little things can rapidly cut the profits out of ecommerce fulfillment, whether you are a retailer or any business selling on-line. The only way to be profitable is to constantly sweat the details, and I mean the details, looking for every penny, and understand how decisions and processes say in the call center can impact costs in fulfillment.

Also at VCF, Sarah Polworth of Saks Fifth Avenue, who gave an excellently detailed presentation on the learnings from the retailer's pilots with item-level RFID. There were some very interesting insights here.

Dr. David Simchi-Levi of MIT on a videocast early in 2012 on our Supply Chain Television Channel, in which he announced his new Risk Exposure Index, which really for the first time provides a way to quantify the cost of "unknown unknown" supply chain risks. True innovation in thinking in this increasingly critical area of supply chain.

Russ Meller of the University of Arkansas at CSCMP on the vision he and some colleagues have for a "physical internet," greatly summarized as thinking about freight moves as standardized Lego pieces that can by dynamically assembled similar to internet communication packets. When you first hear this, it sounds like crazy theory that would never work in practice and result in higher costs - until Meller shows you the data. Just maybe. At minimum, great fun to ponder.

Spirit Aerosystems CEO Jeff Turner at the MIT manufacturing event, who described the incredibly win-win approach this aerospace components maker took to an agreement with its union workers that tied pay in part to company achievement (for management too), in return for guarantees against outsourcing. This is an enlightened model that I believe many more manufacturers should adopt, and has led to great success for the company. Labor relations went from a weakness to a strength.

Kraft's Tom Drake at the RedPrairie user conference on the company's success with the RP's store-level DRP system in improving a wide variety of supply chain metrics, notably huge gains in forecast accuracy. This was just really interesting, a well-told story of what could be a breakthrough new approach, but what also set this apart was the clear detail Drake walked us through. Outstanding and passionate.

Bill Tarlton of Procter & Gamble at the Logility user conference on the results the P&G has achieved from its adoption of inventory optimization technology. First, to repeat the theme, it was just very factual and straight forward on the great improvements the company has made in lowering its inventories. Second, it had film clips of senior company executives, not just supply chain managers, touting the importance of inventory optimization to overall business success. Very cool. Non-IO users take note.

I came down to three candidates for the two special recognitions - each of them worthy candidates for presentation of the year.

Just missing was the excellent presentation by Kevin Smith, also of Kraft, at the JDA user conference, around the company's very successful approach to leaning out its production processes by moving a more fixed scheduling approach to its production lines. Customer demand is too unpredictable and dynamic, the critics said, so this won't work. But it does work, Smith showed in detail, and in many cases actually improves customer service while significantly reducing manufacturing costs and inventory. This was an eye-opening case study.

My runner up for best presentation of 2012 is awarded to Allen Kohl, CEO of consulting firm KOM International, and Michael January of food distributor Ben. E Keith, who teamed to deliver an outstanding presentation on Keith's evolution in terms of managing slow movers in the DC. I believe I have never seen a consultant deliver more detail in a presentation than Kohl did, including an objective, detailed summary of the throughput potential of various technology options. Not one second of Blah, Blah, Blah here from either presenter.

That leaves our 2012 winner, who is Raj Subramonian, general manager of Dell's Global Outlet business unit, who at CSCMP delivered an excellent presentation on how his business unit rethought its approach to outsourcing its critical reverse logistics processes, moving from a growingly tense, win-lose type of relationship to a win-win approach with partner Genco based on "vested outsourcing" principles. Subramonian took some personal risks to make this happen, and the heart and soul he put into the successful outsourcing transformation he led at Dell came through strongly in the presentation as well. Very strong audience engagement.

Just FYI, previous SCDigest Best Presentation of the Year award winners were:

2011: Rudi van Schoor of SABMiller's South African operations at the SAPICS conference there on stopping a major supply chain planning project in mid-stream and totally and successfully re-orienting the approach.

2010: Chris Gaffney of Coca-Cola, how to bring balance into increasingly challenging supply chain careers, and how with the right formula less can really be more for both managers and the company

2009: Jim Kellso of Intel, on rethinking Intel's supply chain to work for a new chip whose much lower price point required a dramatically lower cost supply chain.

2008: Matt Salmonson of Old Navy/The Gap stores group, who spoke at the i2 user conference, on how to implement software the right way, and make change management happen.

2007: Michael Schofer of Coats North America, describing his company's supply chain transformation, at the i2 user conference.

2006: Paul Mathews of The Limited Brands for his speech on aligning supply chain and the corporate boardroom at the North American Material Handling Show. This was motivational.

2005: Glenn Wegryn of Procter & Gamble, who presented at CSCMP 2005 on how P&G has developed a methodology and set of tools to drive supply chain strategy and planning into overall business strategy and planning - wonderful.

So, that's our list. Congratulations to the winners. There was a lot I missed, of course. I welcome your nominees for any outstanding presentations you had a chance to see in 2012.

Did you see any outstanding presentations, especially any that were highly visionary or motivational? In general, are you happy with the quality of presentations you see at conferences? Let us know your thoughts at the Feedback button (email) or section below.

View Web/Printable Version of this Page

New On Demand Videocast:

Supply Chain Execution - The Path Forward

Part 2: Five Key Trends in Supply Chain Execution Technology

Featuring Ganesh Iyer, IT Director (Americas), Rexam, Rajeev Das, Program Manager, ERP, Cognizant Technology Solutions and Gagan Deep, Program Manager, ERP, Cognizant Technology Solutions

Now Available On Demand


Major Research Findings Released:

The Shelf Connected Supply Chain 2012

What are manufacturers and retailers thinking and doing to connect their supply chains to the store shelf and true consumer demand? What are the barriers to getting there?

You Will Find the Benchmarks for those Questions and a Lot More in this Outstanding New Report



Cross Enterprise Supply Chain Collaboration and Visibility

Inventory Optimization 2012


Some feedback this week on our First Thoughts column last week on A Supply Chain Christmas List, as considered  by Dan Gilmore and some industry experts he respects.

That includes our Feedback of the Week from Hank Canitz of software provider QAD, he provides his thoughts on several of our wishes. More next week.

Feedback of the Week: On our Supply Chain Christmas List


Interesting list.

In response to Wish #1, I think the supply chain industry conference organizers get exactly what they want. I have tried to get smaller company presentations accepted at several APICS and CSCMP annual meetings now and have been turned down every time. The organizers of these events want big name company presentations even though some of the more innovative supply chain ideas originate from smaller companies.

In response to Wish #3, Companies need to stop thinking about warehouse management systems as separate stand alone systems and embrace an integrated approach. Some warehouse management systems do not have separate databases so there are no issues around synchronizing what's happening in the WMS with what needs to happen in the company's ERP system. Companies need to stop worrying about the wiz-bang functionality that they will never use and embrace a more integrated versus best-in-breed architecture.

And in response to Wish #6, It is all about talking the language of the board room. Supply Chain leaders need to understand how a CFO or CEO communicates, how they are incented, and how they make decisions. They don't care about forecast accuracy, they care about return on investment. You can't talk about warehousing efficiency or inventory accuracy. You need to talk about cost of goods sales.

When a supply chain leader puts a proposal in front of a CFO it needs to clearly identify the value of the proposal in the terms the CFO is use to. If not, the brilliant proposal might just be shuffled to the bottom of the pile until the CFO has time to unravel it and put it in terms he can use to compare it with other proposals.

Hank Canitz
Senior Director Marketing - Manufacturing Industries

  More on Wish List  

As both academic and consultant, I couldn't agree more on retaining hard knowledge from practice.

In fact, it is consulting that provides insights on how Supply Chains work and what are the most sound methodologies and specific tools for delivering value. However, by using academic rigor on practical findings that we can create/improve appraisal tools which let all SC practitioners enhance the toolbox. I might add as my personal wish that more academics would venture into consulting, and vice versa.

All the best.

Jose Antonio Espin


Although I do not always agree with you, I often enjoy your commentaries. However, your inclusion of the wish for more hard data to be taken away from client projects, by consultants, is way off base.

Dan, there is this thing called CONFIDENTIALITY. Maintaining that confidentiality is one of the primary mainstays of the profession. Betraying confidentiality would totally undermine the credibility of any professional consultant. Heck, NDAs involved with SCM consulting projects often include the stipulation that the engagement with that client remain confidential, occasionally even restricting any statement that the engagement occurred.

In actuality, it is often difficult to convey to prospective clients the specific quantitative accomplishments made, because of expected confidentiality - at the conclusion of a meeting with the Chairman and the CEO of a prospective client, I actually was told that my reluctance to share some other clients' hard data was the tipping point, causing them to choose us - confidentiality is really that important.

Plus, in reality, those accomplishments are never totally the result of any consultant's influence alone. The client has to buy-in, follow-through and do all the other hard things necessary to cause positive things to happen. Any consultant claiming to have made such accomplishments demeans the efforts and performance of the client's team in effecting change. You may want to recall Machiavelli's comments about change and the vulnerability of the change agent, from The Prince.

It is far easier to identify the need for change IF the client feels confidence in freely sharing everything, including the ugly stuff. The prospect of having hard data made public would cause a natural resistance to sharing such, by the SCM executive who brought-in the consultant, in addition to the CEO and the Board, for fear of having competitive vulnerabilities exposed,. In another instance, I got a call from the CEO of an extremely large logistics firm, asking assistance on a project of some extreme, national significance -he indicated that he called us because he knew that we would keep it quiet, while other, larger firms, would be broadcasting their involvement in something so major on-the-street.

Having a consultant who publicly shares such hard data further lays effective claim to any successes, undermining the performance of the risk-taking change agent. Who would want to work with a consultant who would essentially confirm Machiavelli's thesis?

How's that for nasty feedback? I'm guessing that Gene Tyndall has already jumped you on that one.

By the way, you left John Coyle from the list of academics - Coyle, Lelonde and Bowersox were the lead academics, from whom today's academic leadership has taken their lead. Although more tactical in their initial transition into SCM, following deregulation, John, Bud and Don formed the trio that helped those of us fending for ourselves, out in the real world, with the formulation of some academic cohesion, while seemingly everyone else in academia was railing against that to which many of them referred as the demise of logistics structure, instead of just teaching how to follow rules, they actually had to think. Under Coyle's leadership, Penn State became and remains the top rated SCM school.

Buon Natale (Italian for Merry Christmas)

Chuck Franzetta
Franzetta & Associates, Inc.


Editor's Note:

No, based on conversations from the past, I am sure Gene mostly agrees with me on this one.

What I am referring to has nothing to do with confidentiality. To be able to answer, as just one but a common example, what software vendors can do what after a long selection process is not a confidentiality issue. I simply know they didn't really learn anything. I am also talking about one on one conversations, where confidentiality isn't an issue.

I know there are exceptions, but I think this is the case far too often - the consultant go through the process, and are just not focused on the learning.

Dan Gilmore



Q: What software company back in the 1980s was the first to implement a Distribution Requirements Planning (DRP) capability into its solution?

A: American Software, according to Andre Martin, who invented the DRP concept while at Abbot Labs. The company is still around, or course, and includes Logility as its main supply chain software arm today.

© SupplyChainDigest™ 2003-2012. All Rights Reserved.
PO Box 714
Springboro, Ohio 45066