sc digest
January 25, 2018 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet The Gurus Are Back! 2018 Supply Chain Predictions 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 Expert Insight Columns bullet Upcoming Videocast and On Demand Townhall/Videocast
first thought


Supply Chain Graphic of the Week
Out-of-Stocks on Retail Peg Displays are Simply Out of Hand


US Truckload Rates Continue to Soar

Is Drop in Global Foreign Investments a Sign Globalization has Reached Peak?
Coke Announces Massive Recycle Program, Greenpeace Criticizes
US Applies Big Tariffs to Washing Machine Imports


January 17, 2018 Contest

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

Holste's Blog: DC Automation - Overcoming Perceived Barriers


11th Annual Gartner-SCDigest Supply Chain Study!

One of the Most Popular and Respected Studies in the Industry Each Year

Survey Respondents Receive Complimentary Gartner Research
(See Details Here) - a $300-500 Value

Weekly On-Target Newsletter:
January 24, 2018 Edition

Cartoon, Logistics Game Changes, Tariffs and Trade Wars, Best of NRF and more

Phone Call with Santa Claus

by Henry Canitz
Product Marketing & Business Development Director

Fast Isn't the Only Factor

by Gary M. Barraco
Global Product Marketing
Amber Road


White Paper Discusses the Importance of Understanding Some of the Quirkier Import and Export Anomalies


2018 will mark the 20th anniversary of what major supply chain sharing standard?

Answer Found at the
Bottom of the Page

The Gurus Are Back! 2018 Supply Chain Predictions

We're back as we have done for many years running with predictions for the year 2018 in supply from a virtual panel of supply chain gurus.

In fact, most of our prognosticators are back from 2017, selected again for this great honor - well, something of an honor - because in the past they have made insightful predictions and (very importantly) are able to get them emailed in before the deadline.

As I say every year, given how difficult it is to make predictions in this crazy world of supply chain, these prognostications are part prediction, part a discussion of trends, part some things to look out for - but it is all good, and I much enjoy these pieces every year. As always, I'll publish two First Thoughts columns summarizing those predictions from all our gurus, followed by full text versions of the predictions in our OnTarget soon after.


For 2018, Regan says "The Perfect Storm has come ashore and it is going to wallop a lot of shipper freight budgets!


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Since the areas of supply chain analytics, machine learning, etc. are so hot right now, let's start with Dr. Michael Watson, of Northwestern University and his company OpEx Analytics, who is also an SCDigest columnist. He is one of the best there is on these topics. 

I asked him to offer some thoughts on where supply chain network design and advanced analytics in supply chain were heading in 2018.

"Retailer OTIF (on-time, in full - see Watson's SCDigest article and the one that precedes it here on this topic) penalties will cause many manufacturers to invest more in analytics to prevent these penalties, Watson expects.

"This will include better network design - so you are set up to hit the OTIF; better transportation analytics - to make sure you hit the time window; and better inventory analysis -to make sure you have the stuff when you need it," Watson notes.

Among other predictions, Watson also says that "direct to customer" will continue to drive analytics and network design in 2018.

"I heard a great talk from Home Depot at CSCMP talking about their journey to deliver directly. Besides the IT work, there is a lot of network design and analytics that go into these solutions," Watson notes. "This includes deciding where to pull from, figuring out an inventory strategy, deciding the fleet size or how to outsource, and how to plan and schedule your capacity. You need to have some fast analytics running behind the scenes to make sure that you can deliver when you promise."

Watson also expects "that in 2018, almost any company that analyzes data will call it Artificial Intelligence." You have been warned.

I am glad to have back Mike Regan of TranzAct Technologies, who always has something interesting to say, usually related to freight transportation, whether it is at the NASSTRAC annual conference, his own weekly "two-minute warning" videos, or here on SCDigest, where he is a frequent contributor.

Regan should be taking a victory lap. For the past couple of years, he has been warning shippers that if the US economy ever starts to see consistent 3+% growth, transportation costs were likely to soar, due largely to the very real but somewhat obscured driver shortage in the face of what was a tepid freight environment for a couple of years.

Well, we've seen 3% growth in Q2, Q3 and likely Q4 when the numbers are released – and right on cue, rates are exploding. Truckload rates in the US were up 6.2% in both November and December, according to the Cass Linehaul Index, which itself now predicts rate increases of a hefty 6-8% in 2018.

For 2018, Regan says "The Perfect Storm has come ashore and it is going to wallop a lot of shipper freight budgets!" He adds that "This "transportation Perfect Storm" will expose transportation/supply chain operational and technological fault lines for shippers."

He expects the impact of this Perfect Storm will hit shippers differently, depending on the spade work they have done to prepare. So, for example, there will be shippers with a demonstrated track record for having built truly collaborative relationships with their carriers over the years.

"The carriers have excellent data and know which shippers have supported them in the past, as opposed to shippers that have talked a good game but who have consistently been focused on getting the lowest possible rates." These shippers will get the capacity in a very tight market.

This group of prepared shippers will also have proactively invested in managing their transportation operations as well as implementing the necessary technology to be able to get their freight moved at a reasonable price, Regan says.

But on the other side of the fault line "will be shippers who have treated transportation as an afterthought or viewed it as a necessary evil," Regan says. "Consequently, they really don't have a strategy or the operational or technological tools to aggressively manage their freight spend. These shippers will see rate increases of at least 8-15%." Yikes!

Another of Regan's "bold predictions": These huge rate increases will result in blown freight budgets and cause more C-Level executives to pay attention to this thing called "freight."

He says one CEO recently told him, "For the first time ever, my board wants to review our transportation spend management program."

Bottom line: It is beyond time to get on top of this.

Gene Tyndall is a long term friend of mine, notable for leading E&Y's impressive supply chain consulting practice in the 1990's, and co-author of one of the best books ever in the industry ("Supercharging Supply Chains"). He has been at Tompkins International the past few years, and is now leading its MonarchFx unit, which is building out an efulfillment network.

First, Tyndall cited what he calls an obvious trend: The highly positive state of the economy will drive supply chain innovation and transformation.

However, he says, that transformation will come "more by natural events than by astute design."

A 3% GDP growth can "lift all boats," Tyndall notes, adding that when companies have positive cash flows and higher discretionary income, there is more capital to invest, and new plant and equipment rises to the top of executive agendas.

"Adoption of new technologies, coupled with ecommerce and digitalization, will generate more investments, new products and services, and new efficiencies within infrastructure, as well as new plant and equipment," Tyndall says. "This does not necessarily imply that investments will be optimized, or even well justified, only that the capital will there for reinvesting in the business. The certainty of the positive economy is outweighed by the uncertainty of the markets, the disrupters, and customer buying behavior. Thus, we will see investments (including M&A) but not necessarily the right ones."

Tyndall also notes with all the current change, from the growth of Amazon to the impact of digitization, "If all companies do not change, they will be disrupted, beaten competitively, or simply regarded as obsolete," Tyndall says.

What to do? You start with a laser focus on customers, Tyndall says, especially the needs and behaviors of millennials. Second, get on top of all the emerging technologies (drones, robotics, 3D printing, etc.), and focus on digitizing the business.

"All businesses need to adapt these technologies in innovative ways to compete, or simply stagnate," Tyndall says.

Third, focus as never before on speed. This, I will note parenthetically, is one of Amazon's main advantages – it simply moves faster than everyone else.

Interestingly Tyndall says, "Change management has always been the major barrier to change, but in 2018 it will not hold up speed," adding that "People must adapt to change and speed, or else - and they will learn this the hard way."

All good stuff. Full text of these guru predictions coming soon in our OnTarget newsletter, and summaries from another set of gurus next week.

Any reaction to the guru predictions? What resonates with you? What are some of your 2018 supply chain predictions? Let us know your thoughts at the Feedback button below.



Tuesday's Videocast:

Yes, Retailers and Distributors Can Survive and Thrive by Unifying Commerce and Supply Chain

Integrated Approach will Improve Customer Experience as Smart Retailers Move Beyond Omnichannel

This videocast discusses how to connect people, processes and technology across commerce and supply chain operations to achieve unified commerce.

Featuring Dan Gilmore, Editor and enVista CEO Jim Barnes, a highly recognized industry expert on retail and distribution.

Tuesday, January 30, 2018

On Demand Videocast:

The State of Retail-Vendor Supply Chain Relationships 2017

Results from SCDigest's Second Biannual Benchmark Study of Retailers and Their Vendors - and SCDigest's New Index to Measure State of the Relationships

These findings are being presented in a live panel discussion with interactive questions from audience members throughout.

Featuring Dan Gilmore, President & Editor-in-Chief of Supply Chain Digest plus Greg Holder, CEO, Compliance Networks, Kim Zablocky, President, RVCF (Retail Value Chain Federation)
and Victor Engesser, Retail Executive Advisor, RVCFP.

Now Available On Demand

On Demand Videocast:

The Modern Control Tower: Orchestrating Your Digital Supply Chain

What is a Supply Chain Control Tower and What Does It Do?

These experts will discuss how operational control towers have evolved past their visibility and transportation roots to focus on taking action for every end-to-end customer order across the multi-party supply chain.

Featuring Dan Gilmore, President & Editor-in-Chief of Supply Chain Digest plus Martin Verwijmeren and Brian Hodgson of MP Objects.

Now Available On Demand


We received a number of emails of Gilmore's First Thoughts column on The End of the Fossil Fuel Era?, a selection of which we provide below.

Feedback on The End of the Fossil Fuel Era?


My suggestion would be to view the oil market like the stock market. There will always be fluctuations in the short-term, but what is the long-term trend?

I've also read various authors on this subject and most seem to agree on a few facts:

•  Oil is a non-renewable resource.


• Demand for oil will generally increase with population growth.

• While alternative sources of energy exist, none can yet do everything that oil does, as economically as oil does it.

• Price of oil can be affected by many factors such as supply, strength of the economy, value of the dollar, and Mideast tensions.

I think the crises has been temporarily averted due to the factors in the 4th bullet, but not permanently resolved.

The underlying problems in the first 3 bullets still exist. This will occur, the only question is when.

Mark Wilder
Distribution Manager
T. Marzetti Company


Editor's Note:

Thanks for the response. I used to think almost exactly this way, but as I hope made clear I believe electric cars are will soon gain critical mass and upset your bullet number 2.

Dan Gilmore


Thanks for the article... was interesting.

I guess Gilmore is spot on and we indeed have entered an era of long term decline of fossil fuels

I think it will be another 20 years ‎by the time alternate fuels will have a greater share than fossil fuels.

I think that countries like India and some other emerging markets - all large consumers of oil - are slow to adapt to new technologies and thus will continue to consume oil for 20-25 years before they have also achieved parity with advanced economies in terms of use of alternate fuels.

Rajeev Kashikar

Mumbai, India





The change that is coming to transportation through the development of electric vehicles has great promise, but until there are major breakthroughs in alternative generation of electricity, we will still be dependent upon hydrocarbons.

It's important to ask what's creating the electrical power to charge the batteries, think about what's on the "other side of the charging station."

Jack A Cuneo
JP Venture Partners




Q: 2018 will mark the 20th anniversary of what major supply chain sharing standard?

A: Collaborative Planning, Forecasting and Replenishment (CPFR), released as a Guideline by the VICS organization in 1998.

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