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October 13, 2016 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet Trip Report - CSCMP 2016 Part 3 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 New Supply Chain by Design and Expert Column bullet Videocast and On Demand Videocast
  Find out more About ACTYLUS™ Smart Bins with
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first thought


Supply Chain Graphic of the Week
Is the Dreaded 3PL IT Gap Soon to be Gone for Good?


More eCommerce Moves by Amazon, Walmart

Foxconn Embraces Robots Big Time in China
US CO2 Emissions Headed for 24-Year Low
Demand for US Warehouse Space Continues to be Hot



Includes the Recent Gartner Report Entitled "Apply the Supply Chain Maturity Model for Better Demand Planning."


Week of September 28, 2016 Contest

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

Holste's Blog: Automation Solutions Preferred By DC Business Managers

Weekly On-Target Newsletter:
October 12, 2016 Edition

Cartoon, Annual 3PL Study, Order Picking Smarts, Keys to S&OP and more

S&OP, SIOP, IBP, MIOE—a Supply Chain Rose by Any Other Name...

by Henry Canitz
Product Marketing Director

How You Should be Using Multi-Echelon Inventory Tools

by Dr. Michael Watson

Day 1 Day 2 Day 3


In honor of National Manufacturing Day last Friday, about how many manufacturing workers are there in the US?

Answer Found at the
Bottom of the Page

Trip Report - CSCMP 2016 Part 3

Really milking it this year, I am back with one more column summarizing CSCMP's 2016 annual conference in Orlando a couple of weeks ago.

I first offered an overall summary and review of the conference and keynote speakers, as can be found here: Trip Report - CSCMP 2016 in Orlando.

Last week, I reviewed some of the education sessions I attended. As previously noted, there were seven such opportunities across the three main days of the conference: three educational sessions across 16 tracks both Monday and Tuesday (that makes six), plus a choice of one of three 90 minute "megasessions" on Wednesday, which really aren't so "mega" considering the regular educational sessions are now 75 minutes long. But I digress.


Most insightful of all, Reade said companies and vendors need to start thinking more holistically about product flow across the DC.


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As almost always, I attended something in each of these seven slots. Last week, I reported on how Dell has taken a bold and interesting approach to developing an innovation culture to drive progress in Sustainability; how Nike is moving from a traditional linear supply chain model to a "responsive" supply chain, driven by ecommerce changes; and highlights from an interesting panel discussion on the future of warehousing, in which the insightful Steve Reade of DSW shoes noted (among other observations) that we need to break down operational silos across different process areas of the DC to look more holistically at optimizing total product flow.

When I sat down this week to highlight more of the sessions, something really hit me: here just two weeks later, it is already getting hard to make sense of my notes, which seemed clear enough at the time. I will combine that with the observation that it seems all conferences, such as the MHI event in Phoenix next week, are emphasizing session content that attendees can take back and use right away, to drive perceived value.

So I am combining my growing difficulty making sense of my CSCMP notes and the perceived need for ideas that conference attendees can use right away to say there needs to be a better way. First, more conferences and speakers should make conference presentations available to attendees (CSCMP does so with a modest delay if OKed by the speakers). The silliness of attendees taking pictures of slides with their phones because the slides won't be available later is a key symptom of this condition (yes of course, I am aware many companies prohibit slides from being made public - we need to work on this).

Second, an even better idea: speakers and panelists should be required to submit a "Cliff notes" version of their presentations. That is in effect what I am doing here with these summaries, but just think if rather than needing to rely on madly scrambled note taking, session attendees had access to the key points in some kind of document for each session. If done well, that could make a huge difference in attendee value and satisfaction, it seems to me.

But until then, you will have to make do with my summaries.

There was a Wednesday morning megasession on supply chain innovation that was presented by the AWESOME organization, a group dedicated to supporting and promoting woman in supply chain, founded several years by DCS Logistics CEO Ann Drake.

The moderator and all the panelists naturally enough were women, and though it started a little slow, in the end it was a very good discussion that covered a lot of ground. But it did make me more resolved to develop a supply chain innovation framework, because we really don't have one. 

Heather Sheehan has somehow managed to retire at a fairly young age (part of a plan) from industrial giant and Lean-focused manufacturer Danaher, but she had some consistently insightful thoughts on innovation generally and Danaher's approach specifically.

Sheehan noted that Danaher formally assigns "stretch goals" to supply chain managers to drive innovative thinking - a stretch goal being defined as some target that a manager has absolutely no idea how it can be achieved. The stretch goal concept is not new, of course, but Danaher seems to have institutionalized it in a way most companies have not.

Danaher's sales teams call on primarily industrial customers. Its buyers procure lots of industrial goods and components. So someone there awhile back had the bright idea of using Danaher's internal buyers to test drive marketing campaigns, new product launches, presentations, etc. That effort now regularly identifies message gaps, where the buyers got confused from the materials, etc., to great benefit to the Danaher sales and marketing teams.

That is certainly one great idea from the conference you may be able to start using very soon.

Darci Harris of Mars Chocolate said her company often formally evaluates innovation processes and cultures in potential service providers such as 3PLs and co-packers, and that while it of course insists on competitive prices, the companies which demonstrate high levels of innovation are often selected even if they are not the lowest price alternative. I may write a more detailed article about this panel in our OnTarget newsletter soon.

On Monday, a panel discussion on the "Uberization" of the US freight market was a bit commercial, in that it featured two providers of new age freight solutions talking up their companies, but nevertheless it was interesting, as there really does seem to be something going on here.

Brett Parker is president of Cargomatic, which provides a Cloud-based software to match shippers and carriers, especially small trucking firms, and he said the key opportunity here is to address the high levels of inefficiency and "friction" that exist in freight markets, where it is often too difficult for a shipper to simply find a truck.

The Cargomatic app, for example, illustrates on a real-time map of what trucks/carriers are available in a given area, which can be filtered in many ways. From a pricing perspective, Parker said in some cases, Cargomatic sets the rate for a given move (like Uber), whereas in others shippers set the price and then sees which carriers are willing to take the load.

A 3PL called Deringer said it is using Cargomatic, and found it doesn't necessarily get better rates from the service, but that at those competitive prices it really likes the visibility and real-time information Cargomatic provides. It gets almost real-time proof of delivery, for example, and now finds a truck in minutes versus perhaps hours when working through brokers.

I had never heard of Matchback Systems, but founder Todd Ericksru's company is trying to solve the mismatches - and usually lots of deadheading - in moving import and export containers. 

Frequently, import containers move inland and then are later shipped empty back to a port, when there was an exporter nearby to the importer needing a container.

This is a multi-billion dollar freight savings opportunity, Ericksrud said, as his system looks across the data to suggest potential collaborations, almost like continuous moves in regular truckload freight. Makes a lot of sense to me.

On Tuesday, Mani Janakiran of Intel gave a very interesting presentation on the company's incredible use of advanced supply chain analytics.

Using a variety of tools, some home grown using general purpose analytics platforms, and others built using LLamasoft, Intel has just about completely modeled its entire supply chain at a level I believe is rare, on top of which it just keeps adding on analytic applications.

That includes a "supply-demand solver" that looks out over some horizon, and not only identifies where there is a gap in S&OP plans, but also suggests how the issues might be best resolved. Another called "inventory surveillance" provides a neat visual simulation of how inventory will flow across the supply chain to customers over some period of time, and again identifies likely problem areas. 

This is all just amazing - I would like to know who else if anyone has taken analytics this far. Intel is now also working on "cognitive" analytics, which as best I understand it keeps track of what decisions were made and why, how those played out, and what would have happened if other choices were made. This is data and insight that few companies can capture today.

Finally, Arnold Maltz and Mohan Gopalakrishan of Arizona State gave a presenting on forecasting for products with intermittent demand - which it defines as SKUs with zero demand in some periods over a given horizon - an increasingly vexing issue in a long-tail world, also a prominent challenge in service parts logistics and other sectors.

The bottom line here: there is no magic bullet, many companies get by OK with rules of thumb or experience, but from a statistical approach the Croston Method (developed in the 1970s) is the best we have, though some software companies have proprietary approaches that may do better. To be honest, was looking for a little more out of this presentation.

So I am now finally done with CSCMP 2016. Will be at MHI next week, leading a panel discussion. Say hello if you get the chance.

Did you go to CSCMP 2016? If not, why not? If yes, what are your thoughts? Any reaction to the educational session summaries this week? Let us know your thoughts at the Feedback section below.

View Web/Printable Version of this Column

October Videocast:

Understanding Demand Signal Repositories in Consumer Goods

All These Years Later, Why is a DSR So Hard to Build? A Path to Rapid Deployment and Lower Costs

In this outstanding broadcast, we'll review the basics of a demand signal repository, how it can drive tremendous benefits by enabling a demand-driven supply chain, and the barriers to achieving these critical capabilities.

Featuring  Dan Gilmore, Jeff Beckett, Founder at Retail Velocity and John Beckett, Founder and President at Retail Velocity and the inventor of the Demand Signal Repository in 1994.

Tuesday, October 25, 2016

On Demand Videocast:

5 Emerging Technologies that will Change the Future of Distribution

Distribution Productivity has Never Been More Important - Here's How to Take it to the Next Level

In this outstanding Videocast, we will cover the latest in each-picking robotics, co-bots, artificial intelligence, autonomous vehicles, sensors, drones and droids.

Featuring  Dan Gilmore, Roger Counihan, Emerging Technologies Strategist, Fortna and Chad Hallerman, Sr. Director, Solution Design from Fortna.

Available On Demand

On Demand Videocast:

Reducing Order Picking Costs in the DC without Automation

New Solutions to Generate Significant Reductions in Order Picking Costs Whatever the Current Environment, With Little or No Disruption to Current Operations

In this outstanding Videocast, we will detail the wide portfolio of technologies that can be applied today to get your order picking costs headed back in the right direction. The broadcast will include real world cases studies.

Featuring  Dan Gilmore and Ron Kubera, Executive Vice President and Chief Marketing Officer at Lucas Systems.

Available On Demand


We're just featuring this week an interesting email exchange relative to a point made by Thomas Moore of Warehouse Optimization on a recent Supply Chain Newsmakers video, which argued that shippers can have much to gain through a better understanding - load by load - of their carriers' true weight limits.

David Schneider of David K. Schneider & Company took some exception to this notion, as you can see from his email below, and then Moore's interesting response back.

Both are friends of SCDigest - and we would be happy with one more repost from Schneider!

Feedback on Knowing Carriers' True Weight Limits


The video segment brought this phrase to my mind: "Your performance will vary."

I’m not calling bull s--t on what the fellows from Warehouse Optimizers talked about, but there are practical factors that I think could be wrongly defined as "tribal" knowledge.

Fuel weighs something: Over the road diesel weighs about 7.1 pounds per gallon. So every 100 gallons of fuel on board adds 710 pounds to the GVW of the rig. Many drivers know this, and will wait to fuel until after they have scaled their load if they know that they are close to the 80K limit. Is this "tribal knowledge?" No, as it is something that is taught in many of the driver schools. While a local delivery rig may hold only 45 gallons of fuel in each side tank, it is not unusual to see rigs with 130 gallons on each side, sometimes more.

Driver and driver's gear weigh something: The driver's weight is obvious, but people tend to forget that drivers often live in their tractors - and the belongings can weigh in.

Accessories on the truck: Snow Chains, HazMat kit, skirts, Aero-tails, APU units, again, these all add weight.

Trucking companies do not have high consistency across the fleet. They may specify the same basic model, but the accessories will change the weight of the tractor and the trailer from unit to unit. Metal roof trailer or translucent plastic roof? Hardwood trailer floor or a composite material? E track or logistics track (they are different).

What is getting identified as "tribal: is really a reflection of the variability of vehicle weights based - the complexity of the fleet. If you ask a trucking dispatcher, a driver, or an executive what a truck weighs, they are going to give you the "average" because they recognize that the weight of a truck depends on many factors that are out of control.

David K. Schneider
David K Schneider & Company, LLC

Response from Moore:

This is great! It typifies the response that we often see. The Tribe has a set of assumptions that generate "safe" answers. Here is a very concrete example from companies that shall remain nameless - the total weight that refrigerated trucks can carry:

Company 1 45,000
Company 2 44,000
Company 3 43,500
Company 4 42,000

They all use about the same carrier base!

Data is the key. We took Swift's and JB Hunt's fleets and weighed the various combinations of tractors and trailer a few years back. Yes there was variation and yes we could not take the lightest tractor and the lightest trailer as our standard - but we developed a standard that 95% of the fleet could easily meet.

In another example, it turned out that JBH intermodal had a habit of sending sleepers into the client to drive the 25 miles to the ramp -the client asked them to stop doing that so they could get the extra weight on the loads. Will Cotten's example in the video is real. He ran many loads for, what turns out to be, one of our current clients!

To put this all in perspective, 8 years ago we got about 880,000 records of 5 axle trucks weighed by the DOT. Of those that were clearly weighted out (more than 69K gross) a very large number(81%) had >3000 gross weight available.

Thomas Moorecomma



Q: In honor of National Manufacturing Day last Friday, about how many manufacturing workers are there in the US?

A: About 12.3 million at the end of 2015 – down about 5 million from 2000, but holding fairly steady of late. We’ll note that count generally includes white collar employees working in manufacturing plants, something rarely mentioned relative to this number.

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