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June 3, 2016 - Supply Chain Flagship Newsletter
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This Week in SCDigest

bullet Warehouse Education and Research Council 2016 bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Holste's Blog/Distribution Digest
bullet New Cartoon Caption Contest Begins bullet Trivia      bullet Feedback
bullet New Supply Chain by Design bullet New Videocast and On Demand Videocasts
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SUPPLY CHAIN NEWS BITES


Supply Chain Graphic of the Week
Carrier Operating Performance by Mode for 2015

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Nike's State of the Art Euro Logistics Campus
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eCommerce Grocery Deliveries All the Way to the Fridge
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Time for Global Rules on Supply Chain Labor, Rights Group Says
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China-Euro Cargo Train has Issues

IMPORTANT NEW SUPPLY CHAIN RESEARCH
Supply Chain Software Trends and Opportunities Benchmark Report 2016

From the Search for Greater Agility to the Coming Era of Cloud Software, Where are Companies Headed?




NEW CARTOON CAPTION CONTEST BEGINS

Week of May 30, 2016 Contest



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

Holste's Blog: Evaluating Goods-to-Person Order Fulfillment Solutions Part 2 of 2



ONTARGET e-MAGAZINE
Weekly On-Target Newsletter:
June 1, 2016 Edition

New Cartoon, Digitization, DC Metrics, RFID Implants, Carrier Results and more

Supply Chain Thought Leaders Video Series:
Important Trends in Supply Chain Digitization

In this Supply Chain Thought Leaders Video, SCDigest editor Dan Gilmore discusses key report findings and important trends in supply chain digitization with JDA's Doug Kimball, who led the development of the new report and has recently been heavily focused on digitization trends.




NEW SUPPLY CHAIN BY DESIGN
Using Profit Maximization to Minimize Cost


by Dr. Michael Watson

eBOOK PROVIDED BY DEMAND SOLUTIONS
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.


SUPPLY CHAIN TRIVIA

What percent of total miles driven by major US truckload carriers are empty (deadheading)?

Answer Found at the
Bottom of the Page


Warehouse Education and Research Council 2016


Two weeks ago was a crazy time for supply chain related conferences. I was at the Gartner Supply Chain Executive Conference in Phoenix for two days (see Trip Report: Gartner 2016 Supply Chain Executive Conference), but before that had time to spend just one day at the Warehouse Education and Research Council (WERC) 2016 conference in Providence, RI of all places, enough that I can squeeze a trip report out of it, which you will find below.

I will just note that also that same week was the Institute for Supply Management's large annual conference, user group events for Manhattan Associates and SAP, and a couple of other supply chain events as well. Unfortunately, I can only be in one place at a time, and placed my bets with WERC and Gartner.


GILMORE SAYS:

"Picking to a cart - common in ecommerce fulfillment and beyond - could utilize a visual map of what products at a given location are required in what quantities across the cart bins.

WHAT DO YOU SAY?

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As I have written in the past, the WERC event is a low key kind of affair, in a positive way, with a relaxed vibe that offers a pleasant overall experience. There are many supply chain and logistics practitioners who are very loyal to the organization. About 1000 of them again showed up in Providence, featuring presentations across some 15 tracks, which again this year featured a group of sessions focused on retail and healthcare supply chains, added I believe in 2014.

Here's what I saw:

Sven Verstrepen, now with Belgian logistics services provider Ahlers, was back for second straight year leading a presentation on so-called "horizontal collaboration." 


What does that mean? As contrasted with vertical collaboration between trading partners such as suppliers or customers, horizontal collaboration involves arrangements with peer companies - sometimes even a company's own competitors.

More specifically, it really focuses on logistics collaboration, sharing warehouse and especially transportation resources across two or more shippers. It is very hot right now in Europe, though slow to gain much hold in the US, as I will discuss in a moment.

There are six or seven versions of horizontal collaboration, including one you could call "co-mingled freight," in which shippers of heavy goods marry trailer or container loading with companies that ship light products, in a way that improves total trailer efficiency.

Then there are "round trips," a practice sometime seen in the US in which companies with complementary routes in each direction use a single truck; mode shifting, in which combining freight can sometimes lead to more efficient transportation mode selection, with a difference in Europe in that it can sometimes lead to a move to all water transport; sharing DC capacity and then mixed loads to retailers, etc.

There is a well-publicized case study in Europe involving Procter & Gamble and Tupperware that involved two of these practices, starting with co-mingling heavy and light freight that not only allowed more complete trailer utilization but enabled Tupperware to also utilize intermodal transport instead of truck, as P&G had been doing. The program reduced combined logistics costs 17% and CO2 emissions 30%.

And that last point is important, because it is in fact reduction in CO2 emissions that are driving much if not most of the collaboration activity in Europe, more so than the savings. Last year, Verstrepen cited an example of a collaboration that produced no cost reductions but was pursued anyway just for sustainability improvements.

So, a bit less CO2 fervor here is one reason that the US is well behind Europe in horizontal collaboration. Another is that it's just often seen as too hard versus other alternatives, according to co-presenter Geoffrey Milson of consulting firm enVista. He noted that while often savings of 7-15% are possible, the effort in terms of process changes, IT integration and more often just looks too daunting versus other transportation strategies that might also deliver savings.

So, will that situation ever change? Verstrepen noted the active role government has played in Europe to drive this evolution, including a program in the Netherlands called "Synchromodal Transport" in which the government there is actually providing the platform for finding and managing these collaborations.


Would that fly here? I doubt it - but I think this will in fact come to the US nevertheless, with profound implications for the practice of logistics management across many dimensions, including a new class of 3PLs to manage all this.


I also saw in interesting presentation from George Bowser and Saman Saiy of DHL supply chain (formerly Exel Logistics) on use of "augmented reality" in distribution centers, specifically the use of "smart glasses" in order picking applications.

DHL has been doing a lot of research on this topic. The concept of augmented reality means adding something digital (text, graphics, video) to what a person such as DC worker sees.

While others have been doing work in which the associate actually identifies the product to be picked using the glasses through imaging technology, DHL has settled on using a finger-mounted blue tooth ring scanner for product identification connected to the glasses.

The augmented reality can come in through several ways. Imagine that when a picker is moving down an aisle on a pallet jack that the location for the pick is "lit up" in some way through the glasses, so the picker can see exactly where the next stop is and can manage speed of the vehicle according.

Pickers on foot or on a vehicle could have optimal pick path similarly visualized, and perhaps most interestingly, picking to a cart - common in ecommerce fulfillment and beyond - could utilize a visual map of what products at a given location are required in what quantities across the cart bins. So, it is in a sense like pick to light from a worker's perspective, without the need for the physical lights themselves.

Interestingly, in DHL's work the orders for a batch or wave are sent to the glasses at the start of the work, not dynamically for each pick. This, I was told, was to ensure no delays in processing from pick to pick, especially necessary if say the glasses were to show an image of the product to be selected.

But isn't that taking us back in effect to the old batch data collection approach, before that was utterly eliminated in favor of real-time RF? I need more insight here. Relatedly, one attendee obviously with some experience said from what he has seen the issues are what happens when something goes wrong, such as a worker realizes he/she made a mistake after confirming a pick.

Regardless, it was interesting, with a lot more to come for sure. DHL did a three-week pilot with Ricoh in Europe that demonstrated 25% picking improvement versus RF (though I believe the comparison should really be to voice and/or "smart carts"). DHL is investing heavily in this, and it has several other pilots going across the globe, also seeing augmented reality applications in areas such as maintenance, value-added services and more beyond picking.

In the first session of the day on Monday, I saw an interesting discuss of transportation procurement from Ryan Focke of Kroger and Kevin Zweier of consulting firm Chainalytics. It was a wide ranging discussion that covered a lot of ground and is not easy to summarize, but here are a few highlights.

As most know but good to hear again, a shipper can always find lower rates, but that does not necessarily mean lower costs. There are many soft costs relative to service levels, administrative overhead, damage, etc. that need to be measured and considered.

A transportation procurement "event" is at least as much a relationship management process as it is a rate pricing exercise, because of course the volumes are not legally binding on either side. But the only way to be pretty confident you are getting excellent rates is to constantly be "in the market" for at least some of your freight.

Data is the Achilles' heel of transportation procurement processes, both in its accuracy and its timeliness/latency. Transportation procurement tools can't help you here, but the result hugely depends on getting the data right.

Doing procurement on a global basis is especially tough. Data of course can be really bad, you have to deal with currency issues, often no standard definitions of capacity, regulations change frequently, etc. But some companies are trying this on a more centralized basis.

I am out of space, but highly recommend you take a look at the YouTube channel of motivational speaker Destin Sandlin. You will learn a lot about how the physical world really works, including why in fact cats can usually land on their feet. Good stuff.

Good day a WERC 2016. Wish I could have spent one more there.

Do you see horizontal collaboration gaining hold soon in the US? Are you  bullish on augmented reality or not? What did you think of WERC 2016? Let us know your thoughts at the Feedback section below.



View Web/Printable Version of this Column
   

New June Videocast:


Supply Chain Design as a Continuous Business Process - The Whirlpool Story





From Project to Process: Here's How to Get It Done



In this outstanding Videocast, we’ll explore the changes needed to make supply chain design a continuous process, emerging new best practices in supply chain design, and how consumer products leader Whirlpool has successfully embraced this 360-degree approach.


Featuring Dan Gilmore, Editor, SCDigest, and Toby Brzoznowski, Executive Vice President, LLamasoft and Brian Streu, Manager, Supply Chain Design, Whirlpool

Thursday, June 23, 2016

New June Videocast:


A Benchmark Study on Supplier Integration in an Outsourced World

Featuring Real World Experiences from DuPont, Honeywell and Acsis, Inc.

A new benchmark study of practitioners reveals the priorities, expectations and challenges of achieving real-time visibility into goods as they move through third-party production cycles.


Featuring Dan Gilmore, Editor, SCDigest, and John Dipalo,Chief Strategy Officer, ACSIS, Peter Musser, IT Services Delivery Specialist, DUPONT and Bruce Stubbs, Director, Industry Marketing Honeywell Scanning & Mobility


Tuesday, June 21, 2016

On-Demand Videocast:


Now is Finally the Time for WMS in the Cloud

As Supply Chain Software Moves to the Cloud, Barriers to Warehouse Management Joining the Party have All Fallen Away


What has changed, and what WMS technology developments are fueling this transition. We'll cover all that and more in this detailed, fast-paced broadcast.


Featuring SCDigest editor Dan Gilmore and Dinesh Dongre, VP Product Strategy, Softeon



Available On Demand

YOUR FEEDBACK

More this week from the many excellent Feedbacks stemming from our columns on Lessons from Finish Line's Distribution Disaster. Note we mixed up the names and Feedbacks on two emails last week, which we have corrected below, plus some new ones.


Feedback on Lessons from Finish Line's Distribution Disaster:

comma

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!

Nick Seiersen

comma
 
 
comma

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.

Rich Marshall

comma
 
 
comma

As they say, the highway to success in Project Management is littered with failures due to underestimating the risk. Rule number one - Never, never turn on a new system during Q4 or your prime business quarter. Rule number two - Validate all processes at full scale. Sure there are many "rules" you could point too but these two are key. Add to his the need to benchmark the solution providers successes and failures.

One might say it is hard to find this out - it is not. Due diligence is an expertise that requires background checks on the solution provider's customers and a review of the good, the bad and the ugly. And if they say they have no ugly they are not truthful. Not all implementations go well. Some due to the solution provider, some due to the customer being ill prepared to take on a major project. Lastly, with a project of this magnitude, trial runs and simulations of the full blown system should be presented to the CEO and staff before the system is green lighted!!

Tom Dadmun
Retired VP, Supply Chain
Adtran



 

SUPPLY CHAIN TRIVIA ANSWER

Q: What percent of total miles driven by major US truckload carriers are empty (deadheading)?

A: It varies by carrier and period, but generally in the low double digit percentage range, such as Werner’s 13.3% empty miles in Q1 2016. Total empty miles driven by truckers of all sorts is usually measured as much higher, something like 20%, depending on the source, and seems clearly to be several percentage points higher for independent drivers/trucks versus those for large trucking companies.

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