sc digest
May 5, 2017 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet Trip Report: WERC 2017 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 Extended bullet Trivia      bullet Feedback
bullet Gilmore's Supply Chain Jab and Supply Chain by Design bullet New Videocast and On Demand Videocasts

first thought


Supply Chain Graphic of the Week
What has Been the Impact of NAFTA on US Trade Deficits?


Germany's Powerful Hidden Manufacturing Champions

Walmart Improved DC Safety with Bold New Approach to Training
UPS, FedEx to Get Tough on eCommerce Shipping Rates
Despite what You Read, US Retail RFID Adoption is Low, Analysis Finds


April 6, 2017 Contest

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


Holste's Blog: Profiling – Key To Optimizing Picking Strategies & Technologies


Weekly On-Target Newsletter:
May 4, 2017 Edition

Cartoon, Watson on Service Metrics, Germany's Manufacturing Key, Ocean Rates and more

How DOM and WMS Work Together to Power Omnichannel Supply Chains

Thursday, May 18, 2017

Did Walmart's Failed Case Tagging Program Set RFID Back or Move it Forward?
by Dan Gilmore, Editor

Service Level Measures in the Supply Chain, Part 1

by Dr. Michael Watson

At the founding of WERC in 1977, there were concerns among the organizers that WERC would too much overlap what two existing organizations?

Answer Found at the
Bottom of the Page

Trip Report: WERC 2017

I am just back from two good days at the annual conference of the Warehouse Education and Research Council (WERC) at the Ft. Worth convention center - the 40th anniversary of the first event.

If you haven't been, WERC is a boutique sort of conference, with 800 or so attendees, but with many of its members very passionate about WERC and its mission.

As the name implies, the event focuses on 4-wall distribution center matters like no other conference really does, but there are other subjects covered as well, such as a whole track dedicated to transportation issues.

You can find my video review - quite good, if I do say so myself - right here: WERC 2017 Video Review and Comment


The evidence at Peckham and all the others that have gone down this path is that disabled workers have lower much rates of turnover and absences, can be just as productive and offer many other benefits.


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I'll start here with a presentation on “the power of one piece flow in distribution” - basically how Lean principles can be applied in the DC.

Speaker Jason Morin of XPO Logistics started off with an envelope folding exercise that showed the inefficiencies in many batch operations, well understood in manufacturing but less well so in distribution.

Morin then gave a number of real world examples about how this applies in the DC. For example, a company that batched the 4 or 5 steps required to receive and putaway a pallet. After incoming pallets from a shipment were staged, all say 10 of them would first be check in, then counted, then QA checked, etc. Turns out just as with envelop stuffing, doing all the needed steps to a pallet one at a time is much faster - and has the added advantage of making the first pallet available for putaway much quicker versus having to wait for all 10 to be fully processed.

Morin noted that just like in manufacturing, piles of WIP inventory are generally a sign there is opportunity, whether that is stacks of pre-built cartons in the VAS area or staging lanes on inbound docks packed with pallets.

He was less sure in applying Lean to picking operations - the area I have been most unclear on - and Morin said he had less experience here. This actually gets very complex, and can involve such competing theories as whether so-called waveless picking is better than wave-based order release, even though you might lose some travel time efficiencies from less order batching. But this presentation opened my eyes to some real DC opportunities with Lean thinking.

Next was a very interesting presentation on DC theft by Barry Brandman of NJ-based Danbee Investigations.

Theft is a huge and growing problem, he said, in part because the internet has made sales of stolen goods so much easier than in the past, when it had to be done locally. Now thieves have a global market to tap.

A number of examples were cited, including one DC worker who made $200,000 selling stolen goods that had original value of more like $800,000. That's big time.

Brandman said usual tactics such as guards, alarms, video cameras are in reality not very effective. Guards really can't do much, alarms are limited and not working right more often than not, and cameras are only effective if someone reviews the hundreds of hours of recordings each week - which of course no one does. Employees know this.

A big issue is collusion usually between drivers and employees inside the DC. Brandman also said there is a 10-80-10 rule. 10% of employees are honest and won't steal. 10% are bad guys actively looking for opportunities, and the vast preponderance - 80% - are not inclined to theft but can turn as circumstances develop.

For example, Brandman cited one example where 2-3 DC workers were aware another employee and a driver were committing theft. When this went on for months and management was doing nothing, those other employees began to wonder why they shouldn't get on this high money gravy train, and they indeed went over to the dark side.

What to do? A real security audit by someone that knows what he or she is doing is a good place to start, Brandman said, maybe with some self-interest but I think he is likely correct. If issues are suspected, undercover surveillance - including embedded fake employees - has often been successful. And you have to make it easy and anonymous - a key point - for employees to report illegal activity. 

An overall so-so panel discussion on "taming the warehouse beast" suffered from a lack of focus and organization, but nevertheless it contained some worthwhile insights, a few of which are below.

Catherine Cooper of consulting firm World Connections said that with the continued growth of temp workers in DCs, companies need to do a review and see how "temp friendly" their processes and systems really are - and if they do so will usually find there is a lot more that could be done to improve and speed temp on-boarding. 

Norm Saenz of consulting firm St. Onge said the biggest trend he is seeing in distribution is use of put walls for ecommerce fulfillment. In these systems, pickers place goods on one side of a sort of cubby hole structure, guided by a light system, and then when individual orders are ready they are grabbed and processed by packers on the other side of the wall.

The advantage, Saenz says, are that this approach generally allows companies to use the same inventory for both ecommerce and regular replenishment orders.

Steve Henderson of C&S Wholesale Grocers said his company, like many others, develops a list of 15-20 logistics improvement projects for a coming year, and rank orders them in terms of impact. That's commonplace. What C&S does that may be a little different is to really analyze opportunity costs, sometimes leading it to add resources to project teams to get to the savings faster when the dollars are big.

Changing gears, WERC is to be commended for just about every year having a session on use of the disabled employees in DC operations, a trend that started with Randy Lewis of Walgreens a number of years ago now, who really got this ball rolling on this. Companies such as Lowes, Kroger and Walmart have also developed programs.

This year was a presentation from a non-profit organization called Peckham, which perhaps surprisingly in part is in the 3PL business, running six DCs with some 1.4 million square feet of space. A high percent of its employees are those with disabilities, led by about 40% with psychiatric or emotional disabilities, but many others with various physical issues, learning disorders or more.

With that worker profile, Peckham's performance metrics are top notch, as described by DC manager Byron William. As with Walgreens and the others cited above, the disabled at Peckham don't get a break on performance standards.

The touchy subject, said Shavonne Singleton-Lewis of Peckham, are so-called "accommodations" that are required to assist disabled workers in being productive. The reality the vast majority of accommodations are low cost or free, such as just offering - when you can - some schedule flexibility.

The key, both presenters said, was simply working with each associate to understand what they need to be successful. And that admittedly is a different mindset than most companies have relative to DC workers.

But the evidence at Peckham and all the others that have gone down this path is that disabled workers have lower much rates of turnover and absences, can be just as productive and offer many other benefits. The biggest barrier here is fear of the unknown - take the step today, knowing all these companies will be happy to talk with you about their learnings.

John Morris of real estate firm Cushman & Wakefield gave a good presentation on trends in DC space, and of course it remains a very hot market. Morris made the interesting comment that only about 33% of site selection projects actually turn into an acquisition - build or buy - for a variety of reasons.

Cutting to the chase, Morris offered six common mistakes to avoid in site selection processes. Here are my favorite three: (1) Narrowing the search to just a few locations too early, before all the factors are well understood; (2) Moving forward in a search without enough detail into the desired site layout of the building; (3) Lack of consensus on the exec team on the project, which leads to delays, rework, and those cancellations cited above.

The annual DC metrics report was released as usual by Dr. Karl Manrodt and gang - we'll cover that shortly. Walmart is using “micro-learning” techniques - short, frequent on-line training events - to improve safety in the DC. Pepsico is using two technologies to integrate with carriers and get real-time insight on delivery activities and identify potential late arrivals early.

Good job by WERC CEO Michael Mikitka and team again this year. 

Any reaction to Gilmore's WERC trip report? Let us know your thoughts at the Feedback button below

View Web/Printable Version of this Column

New May Videocast:

How DOM and WMS Work Together to Power Omnichannel Supply Chains

Experts from Tompkins International and Softeon Set the Record Straight in Fast Paced, Q&A Format

This discussion will be based on an outstanding new "Executive Brief" on this same topic, developed jointly by Kevin Hume of Tompkins International and Satish Kumar, a vice president at Softeon.

Featuring SCDigest editor Dan Gilmore, Kevin Hume of well-known consulting firm Tompkins International and Satish Kumar, a vice president at Softeon.

Thursday, May 18, 2017

On Demand Videocast:

New Cloud WMS Solution is Game Changer for Warehouse Management Deployment and Flexibility

New Technology and Deployment Approach Offer a Simply Better Way to WMS Implementations - Learn How

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, Editor, along with Mark Hawksley and Bruno Dubreuil of TECSYS, a leading provider of WMS solutions.

Available On Demand

On Demand Videocast:

Innovation in Shipper-3PL Relationships Benchmark Study Results

New Research will be Unveiled from SCDigest and JDA On This Increasingly Important Topic

In this outstanding broadcast, SCDigest and JDA recently completed new research study on innovation in shipper-3PL relationships, with the goal of obtaining the perspectives of both shippers and service providers on this increasingly important topic. All registrants will be sent a copy of the report will all the data shortly after the Videocast.

Featuring SCDigest editor Dan Gilmore and Danny Halim and Lori Harner of JDA.


Available On Demand


Some miscellaneous Feedback this week, most triggered by our recent coverage of ProMat and WERC 2017.

Feedback on SCDigest ProMat 2017 Coverage


Excellent overview and summary. Thanks

Do we have feedback of the actual saving in time and money that implemented systems have produced? I know specifics are difficult to come by, but some heuristic parameters would be useful.


Blair Williams
Master Instructor APICS CSCP, CLTD

Editor's Note:

We don't really have that kind of data yet - there is really no time at these shows to get into it, and you are talking to vendors, not companies using the technologies.

But we will do what we can.

Dan Gilmore


Your video coverage of ProMat, especially breaking the full day videos into individual solution clips, is simply outstanding.

I understand just how much work you must do to pull this off - not sure how you do it, but it is of great service to the industry.

Congratulations and Dan and Cliff Holste for this great work!

Aaron Klein
St. Louis





The addition on video on most of the solutions in addition to your verbal commentary makes your coverage outstanding, and I believe totally differentiated from any of the other publications.

Excellent job.

You and Holste play well off each other in terms of your insights.

I watch both videos through from end to end.

Michael Jervis

Sandusky, OH


Feedback on SCDigest Video Review of WERC 2017



Just watched your video review - Great work!

I wish that I had seen the Lean presentation you discussed, The "envelope" process really gave me something to think about regarding how we sometimes don't really analyze a process well. The first example sounds more practical - but it requires more "touches" associated with pickup up envelopes and laying them back down after each step.

The second example shortens the time due to only picking up the envelope once. After you fold, pick up the envelope and insert, the lick and stamp processes are required and will take less time if the envelope is already in hand.

Like the "Beer Game" this demonstration can provide insight into "Learning to See."

Steven R. Murray
Lead Auditor and Senior Research Associate
Warehousing Education and Research Council



Q:At the founding of WERC in 1977, there were concerns among the organizers that WERC would too much overlap what two existing organizations?

A: The National Council of Physical Distribution Management (now called CSCMP) and the American Warehousemen’s Association (now called IWLA, a 3PL organization). In the end, WERC founders determined that the competitive concerns were overblown.

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