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May 20, 2016 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet Trip Report: Gartner 2016 Supply Chain Executive Conference bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Holste's Blog/Distribution Digest
bullet Cartoon Caption Contest Continues bullet Trivia      bullet Feedback
bullet Supply Chain by Design and Keep It Moving bullet On Demand Videocasts

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Supply Chain Graphic of the Week
A New Look at Top Supply Chain Challenges

Impressive New Self-Driving Truck Start Up
Yergin on Where Oil Price is Headed
Walmart has Decent Results, Sees Stock Price Jump
Seagate Sees Forecast Accuracy Make Big Jump


The Report Compiles Valuable Findings From Respected Supply Chain Authorities


Week of April 26, 2016 Contest

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Holste's Blog: Quick & Easy Stand-Alone Improvement Ideas

Weekly On-Target Newsletter:
May 19, 2016 Edition

Cartoon, DC Ideas, Rail Q1 Results, New Ocean Alliance, 2 New Surveys and more


This eBook discusses lessons learned which include routine principles, as well as, ground-breaking insights and an introduction to the economic impact of forecast error.

Locus Robotics - An Independent Consultant's Review Part 1

by Marc Wulfraat
MWPVL International, Inc.

You Can Set Inventory Levels and Other Such Myths

by Dr. Michael Watson


We’ve asked this before, but what did the "AMR" in AMR Research, which Gartner acquired in 2009, originally stand for?

Answer Found at the
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Trip Report: Gartner 2016 Supply Chain Executive Conference

Thankfully, I am at the end of the Spring conference season, after numerous straight weeks on the road. It's actually hard work since I attend virtually every session available, do the daily video reviews, etc., but in the end it's really worth it because so many readers enjoy these summary reports.

This week, I started out with just one day at the fine Warehouse Education and Research Council (WERC) conference in Providence, RI, of all places, which I will summarize next week, but then headed out West Monday evening for the Gartner Supply Chain Executive Conference in Scottsdale, AZ.

As many know, the Gartner conference is rooted in the same basic event that was started by AMR Research back in the 1990s. After Gartner acquired AMR in 2009, Gartner infused additional organizational and marketing muscle into the conference, largely to the good. I am sure the event is now much more profitable for Gartner than it ever was for AMR. There were more than 1700 attendees this year, up from 1500 a couple of year ago, and the event has an ever growing exhibitor and sponsor program. Gartner continues to get some marquee supply chain execs as speakers, though the event certainly has a much more of a "corporate" feel to it than it did in the more laid back AMR days.


"A highly engaged workforce combined with an agile culture will beat a competitor with a great strategy every time," says Walmart's Michael Duke.


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A good percentage of the breakout sessions are sponsored by various technology or consulting vendors, and the price tag isn't cheap, some $100,000 for a sponsor package that includes a presentation slot. But Gartner doesn't seem to have difficulty filling the spots.

I was there for just shy of two full days, and saw a number of keynote and breakout presentations. In a reverse of the past two years, I thought the keynotes were not as strong as they normally are, while the breakout sessions were better than I found them in 2015.

My Wednesday afternoon departure meant I missed the big dinner where the Gartner Top 25 supply chains for 2016 was announced, but the headline news is that Unilever came out on top, followed by McDonald's, Amazon, Intel and apparel retailer H&M. Procter & Gamble and Apple remain in a sort of hall of fame and thus not part of the top 25. 

There was a new variable this year, which is a corporate responsibility factor, which accounts for 10% of the total score, and undoubtedly helped Unilever get the top position. More on all this soon from SCDigest.

The unofficial theme of the conference was similar to that in 2016 and was around the need to "digitize" your business and your supply chain. Also back from 2015 was the need to develop "bi-modal" supply chain capabilities. As discussed in the opening keynote presentation by Gartner's David Willis, this basically means that more than ever, companies of course need to continue to operate highly efficient supply chains characterized by continuous improvement, while investing in innovation and more growth-oriented capabilities at the same time.

Is this any different than it's ever been? I remember when I was the moderator for one of the last i2 Planet user conferences in 2008 or so talking about the need to both focus on low cost while empowering revenue growth at the same time, so in one sense nothing has changed. What is different is that digital technologies have simply opened up dramatic new vistas for innovation, in a world of Amazon, Uber, smart phones and the Internet of Things, so the opportunities certainly are very different today.

Willis noted there were signs of economic weakness brewing, but implored attendees not to follow the usual path and cut back on these new age investments if and when a recession hits, else risk being left far behind competitors who keep the pedal down even in relatively tough economic times.

I hadn't heard the term "analog businesses" Willis used to refer to things like brick and mortar retail, but I kind of like it. Willis said all of this is dramatically changing the talent portfolio needed in supply chain (now including "data scientists," innovation specialists, and IT roles right in the supply chain). He also said supply chain execs should double the time they spend with peers, business unit leaders, and trading partners - that is probably good advice.

It was all good stuff, but I thought as a whole bordered on hype - ironic for the company that invented the "hype cycle" concept. It's not all peaches and cream with these new technologies and everyone has limited budgets. What mistakes are companies making, and where are they getting the best returns? I would have liked some more of that.

Chris Tyas, head of global supply chain for food giant Nestlé, gave a wide ranging presentation also on Tuesday morning that I don't think had a real theme, but contained a number of points of interest, and was refreshing in that Tyas several times noted Nestlé supply chain embarrassments.

That included what happened during the horse meat scandal in Europe in 2013, when there was found to be a significant amount of horse meat in what was supposed to be all beef in several supermarket chains and some packaged foods. 

When the scandal broke, Nestle's CEO asked Tyas if the company was impacted. As it did not do business with any of the suppliers first implicated, Tyas said No, and the CEO publicly told the general and business press that Nestlé was clean. Three days later, news broke that horse meat was discovered in some of Nestle's frozen ravioli products.

Turns out the issue came from a meat processor in Poland that Nestlé didn't even know was part of its extended supply chain. In fact, Tyas says, currently Nestlé doesn't have any real direct connection with the 700,000 or so farmers that feed its supply chain through a complex web of middlemen and intermediaries. That has to change, Tyas said, with end-to-end traceability (doesn't exist today) and much more transparency. Consumers are demanding it.

Maybe the most interesting thing of the morning was Tyas describing Nestle's "InGenious" idea crowd sourcing program, a web and mobile app in which Nestlé supply chain members submit ideas for improvements, which are then voted on by other employees (like or not like), augmented with additional thinking, etc. 

The ideas that make the cut get funding and IT support, and the submitter gets to be like the project manager to guide the idea through development, so there is an entrepreneurial aspect to this. So far, 875 ideas have been submitted, and 15 taken for deployment, from improvements in global container tracking to a mobile app that is somehow used with product availability and freshness at retail.

Former Walmart CEO Michael Duke was the opening keynoter on Wednesday, with a focus on some of the lessons he has learned along the way in his career, which included a lot of time in logistics. I liked this observation (paraphrasing): "A highly engaged workforce combined with an agile culture will beat a competitor with a great strategy every time."

Also that "Service should always be measured from the eyes of the customer, not from how the service is being delivered."

Stuart Pann is the CSCO of the new HP Inc., which now has the PC, printer and ink business after the HP corporate split. His keynote was interesting if something of an HP Inc. commercial for some new technologies, such as a new HP commercial printer that can place invisible QR codes on product packaging (not said but using the Digimarc technology we have well covered here) so that, as in the example demonstrated, beer can be scanned, if you will, at the case, six pack, and individual bottle level, from in the supply chain to a consumer getting more information or offers, "instantly turning a physical product into a digital one."

Pann noted that 3D printing is advancing according to Moore's law, meaning capabilities are doubling every 18 months or so. The potential is to "eliminate inventory and warehouses" for many type of products, perhaps not a message the audience was wild to hear about, but nevertheless.

A new advanced 3D printer from HP will actually have about 50% of its parts made by an HP 3D printer. Big changes are coming, I agree, with the rapid advanced of 3D capabilities.

So much more, but I am out of space - look for a part 2 soon that details the best of the breakout sessions.

Any reaction to this this summary of Gartner's 2016 conference? Were you there? What were your thoughts? Let us know your thoughts at the Feedback section below.

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More this week from the many excellent Feedbacks stemming from our columns on Lessons from Finish Line's Distribution Disaster.

Feedback on Lessons from Finish Line's Distribution Disaster:


Just a couple of comments about the Finish Line article.

1. It doesn't sound like Finish Line conducted proper milestone reviews with a "go / no-go" mentality. Making sure software implementations are complete and workable as modules are produced is essential. I agree with your mention of stress testing of individual modules along the way and for end-to-end completion.

2. While no one wants to plan for failure, Finish Line should have had an option to revert to the version of the WMS being replaced. It worked before and keeping the version ”alive” and working in parallel to the new version would have allowed for a smooth transition back to "known territory" and would have stopped the "bleeding."

3. The project management process simply must have the attention of C-level management with candid progress along the way. Responsible CEO's would value this process and accept the responsibility for ensuring everything was ready to go.

I saw that the Supply Chain guy was dismissed but nothing about the CIO who should have had an equal role in the success/failure of the project.

Lastly, companies that "go live" just before known surges in the business usually have failures. The pressure to go forward is high because the busy season "needs" the new system and with volume surge immediately following the implementation makes it virtually impossible to keep abreast of issues that need to be resolved. For example, setting the "Go Live" for 3-6 months prior to the Q4 push allows for issue resolution when volumes are low and more manageable.

Nick Seiersen


As always, you have a knack for finding the sensitive point - like an acupressure point.

System go-live testing. Damned while you do it, damned if you don't do it.

You rightly point out that a really robust test plan can really save your bacon before you "flip the switch." The embarrassment of a delay is so much better than the debacle you describe above.

The systems implementation veterans have learned these lessons the hard way, and they will make sure the test plan is rigorous and complete. It would seem that none of the parties involved had one of them in the implementation team.

I learned this the hard way at a client, and now every new client will benefit from the experience of my very near miss. In my case, I had a veteran looking over my shoulder, and he kept me out of trouble. God bless Ray Healy and may he bask in the gratitude of the many younger staff he helped develop and grow!

Rich Marshall


Finish Line most likely encountered the tendency to customize systems to accommodate familiar practices utilized within their operations. These practices are often considered "unique" to their business and are the result of legacy processes created to work around the shortfall in the capabilities of their obsolete systems. Folks working with these systems are comfortable with the processes and seek to re-create them in the new system rather than adopt what are considered standard or best practices in the industry on which the new WMS and DOM are based.

Strong operational leadership needs to be exercised during any WMS or DOM implementation to prevent or minimize customization by evaluating the current processes and making changes to fit accepted standard industry practices. Change is difficult for many who are wed to doing things the same way because that way is "unique" to the business. Leadership must educate the team on the need to change and persuade the majority to embrace it.

Tim Feemster
Managing Principal
Foremost Quality Logistics



Q: We’ve asked this before, but what did the "AMR" in AMR Research, which Gartner acquired in 2009, originally stand for?

A: Advanced Manufacturing Research.

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