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March 29, 2018 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet One Column, Three Supply Chain Topics 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 Expert Insight Column bullet New April Videocast and On Demand Videocasts



Compliance Networks' Suite of Supply Chain Performance Improvement Solutions Will Help Extend Your Supply Chain for the Omni-Channel Challenge


first thought


Supply Chain Graphic of the Week
What are the Barriers to Supply Chain Collaboration between Retailers and Vendors


Truck Driver Pay is Up, but not Much

Value of Warehouse Space is Soaring
DHL Jumps Back into US Domestic Parcel Business
Apple using a Lot more China Suppliers

Learn More About our Complimentary, No-Obligation Online Opportunity Self-Assessment or On-Site Opportunity Assessment


February 27, 2018 Contest

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

Holste's Blog: Is Automation Right for Your Business


Weekly On-Target Newsletter:
March 28, 2018 Edition

Cartoon, More Amazon Patents, UPS Amazing eTruck Announcement, RFID Model and more

The Retail Vendor Performance
Management Bulletin


March 2018 Issue

This Month:

The State of Retailer-Vendor Supply Chain Relationships 2018 Part 3

Compliance Networks Corner: BOPIS and Inventory Integrity

Retail Vendor Performance Management News Round Up for March: Whole Foods Vendors in Uproar over Changes; Amazon also Raising Fees on Some Vendors; Companies Trying to Revive Made in America Apparel

Building the Business Case for Digital Transformation of Supply Chain Planning

by Henry Canitz
Product Marketing & Business Development Director

Global Trade Management Looks to the Future

by Ty Bordner
Vice President,
Solutions Consulting
Amber Road


Using Multi-echelon Inventory Optimization to Achieve Measurable Operational Improvements


With DHL getting back into the US domestic parcel market, where was its former US air hub?

Answer Found at the
Bottom of the Page

One Column, Three Supply Chain Topics

As we roll out of a slow week into the Easter weekend, just some thoughts on three random topics that I think you may find of interest.

More on the End of Fossil Fuels

In late 2017, I wrote a column on the End of Fossil Fuels Era, which predicted the move to electric cars and trucks may come faster than most of us have thought, driven by the growing number of mandates by countries from China to India to the UK that would mandate electric vehicles generally by 2030 or 2040.


Companies that are not actively monitoring this situation in the South China Sea and developing scenario plans are, in my opinion, making a big mistake.


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I now believe a substantial switch will come even faster than that. China, for example, built some 800,000 charging stations for electric cars just in 2017, with similar plans for 2018.

We received a number of feedback emails on that column, most saying that I was underestimating important forces, such as growing numbers moving into the middle class across the globe and thus consuming more energy, the huge advantages of oil as a fuel, and the fact the oil is used for a lot more that powering vehicles.

All true, but I believe there is simply a momentum for e-car and trucks, driven by sustainability, that will dramatically alter the landscape. Fossil fuels won't go away - but they will in fact begin to fade into the sunset sooner that I once thought.

Case in point: As we wrote about this week, UPS in the UK recently made a rather extraordinary announcement, saying it will soon operate only electric trucks in central London, the result of what it says is breakthrough technology for charging e-truck batteries.

Over the next few years, UPS will grow its central London electric truck fleet from 52 currently to above 170.

The move comes from a development that UPS says is a "radical" change in battery charging technology - not in the batteries themselves, but rather in charging large numbers of them at once somehow more efficiently.

That means that electric trucks will soon in total be less expensive than diesel powered delivery vans, UPS said. When that happens, the switch to electric for most local-delivery operations will be a no-brainer.

The development will herald "a new generation of sustainable urban delivery services both here in London and in other major cities around the world," a UPS manager said.

Even more boldly, UPS also said this technology development marked the "beginning of the end" of the reliance on internal combustion engines. Wow.

UPS added that it is conceivable that all UPS' local collection and distribution vehicles worldwide could be electric in the near future.

Next, have you seen what Volkswagen is up to in this area? It recently announced plans to build electric vehicles in 16 production sites across the globe by 2022, and is committing a massive $25 billion investment in battery cell contracts with suppliers.

To be fair, VW is also spending a lot of R&D on fossil fuel vehicles, but the commitment to electric cars is huge.

I don't know if e-trucks from Tesla and others will really be able handle hauls much longer than local UPS deliveries (it will surely be achieved in phases, whatever Tesla says), and the limited range for cars also remains an issue, especially outside urban areas.

But to me, the UPS and VW moves, among others, is simply more evidence that the e-horse is out of the barn and it isn't going back. The impacts on society (e.g., just consider how your local repair shop will be affected) and supply chain will be huge and not yet well understood.

Campaign to Minimize Concern over Job Losses from Supply Chain Robots?

Is it my imagination, or is there some sort of a loosely coordinated campaign to allay fears about job losses from robots in the supply chain?

In just the past couple of weeks, we first got a story in the New York Times about a FedEx freight hub in North Carolina that is cautiously but steadily adding mobile robots - but finding the machines aren't really reducing total jobs.

The robots are replacing "tuggers" that are used in the facility to move non-conveyable products basically from receiving to staging, each of which requires a human driver.

This is a job that robotic automated guided vehicles - especially with advances in smarts and optical systems - can easily do, and FedEx is slowly replacing the 25 human drivers with the machines.

But not to worry, the Times article says. Jobs won't be lost because the hub has been adding more that 100 new jobs annually. Displaced tugger drives will simply move to different jobs.
FedEx is "finding the machines aren't really net job killers at all" the Times says. It also notes that Dave Clark, an Amazon operations executive, says even after Amazon has installed more than 100,000 Kiva robots at 26 distribution centers in the United States, Canada, Europe and Japan, it is hiring massive quantities of DC associates.

It's the same basic story for on-line retailer Boxed, where CNBC recently reported a story under the headline "Robots make life better for workers at Boxed's New Jersey warehouse - and no one has been laid off."

Hmm...eerily familiar to the FedEx story.

Upon review, it appears the Boxed technology is what most of us would consider fairly standard DC automation, not robots.

Life is better now, says one worker, noting that she used to walk many miles picking orders. Now, she says, "The tote comes to you and you put the product in the tote and the tote goes away and another tote shows up. It's much easier, more interesting, it's kind of fun because you get to wear a headset, and the day goes by very quickly."

Think we can all agree that's better than walking all day to get the job done.

But when the plan was announced, many workers were in fact naturally anxious about their jobs. But not now, as the company has met its commitment of no layoffs from the automation.

Well, you might ask, how then was there ROI from the investment? Because Boxed, like the FedEx hub, is seeing high levels of growth, which can now be handled with much fewer new workers. But what about at slower growth operations?

There are some other stories out there now along this same theme, DC automation/robots without cutting jobs. The common denominator: rapid growth. I am convinced that robots before long will significantly cut the need for DC workers. Since they are increasingly hard to find, that may not be such a bad thing, but let's not sugar coat the impact.

Continued Tensions in the South China Sea

I have written about this several times, without much feedback, but the tensions between China and its neighbors and the US over control of various parts of the Pacific, notably the South China Sea, continue to get worse, not better.

Just this past week, according to CNN, "China's military has put on a show of force in the South China Sea, with drills at sea and in the air to reinforce its claims in the contested region."

Those drills included some 40 war ships accompanied by an aircraft carrier, and then a group of Chinese H-6K bombers, Su-35 fighter jets and other aircraft also conducted a series of aerial maneuvers and strike tactics in the region.

CNN then quotes an expert on the region as saying the maneuvers were in part "to symbolize that China is ready to fight" over its (I will add) absurd claims to what are now international waters.

I see almost no chance of this ending well. At a high level, there are two possibilities: (1) the confrontations turn hot, as the US challenge of Chinese control of the area provokes Chinese military reaction; or (2) the US decides it's not worth it, largely gives up on the region and leaves it open to Chinese dominance, pulling back its military presence and probably abandoning treaties that for example commit the US defending Taiwan against China aggression.

Companies that are not actively monitoring this situation and developing scenario plans are, in my opinion, making a huge mistake.

On that cheerful, I will wrap it up for this week. Would love your thoughts on any of the above topics.

What are your thoughts on any of these three topics? Let us know your thought at the Feedback button below.


New April Videocast:

Digitizing the Order Management Process

Orders Still come in Many Different Forms and Systems - Here's How to Get them Under Digital Control

This videocast discusses breaks down all the ways in which orders can arrive, the downstream challenges associated with each, and the benefits of digitization.

Featuring Dan Gilmore, Editor along with Esker's Sarah Joiner.

Thursday, April 19, 2018

On Demand Videocast:

Reducing Costs through Automated Inventory Replenishment & Analytics

How Motor City Industrial Taps into Data Visualization to Help Customers Identify Waste, Reduce Inventory

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

Featuring Dan Gilmore, Editor along with Joseph Stephens, CEO, Motor City Industrial, Jay Fielder, Supply Chain Technology Manager, Motor City Industrial and Mike Wills, Chief Revenue Officer, Apex Supply Chain Technologies.

Now Available On Demand

On Demand 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.

Now Available On Demand


More emails this week from our story on a panel of manufacturers talking about doing drop shipping for retailers, many from our friends at RetailWire. A selection can be found below.

Feedback on Vendor Drop Shipping for Retail


In the race to get the last mile to be 24 hours or less, drop shipments become essential. This requires managing inventory in "real time" across multiple links of the supply chain that are not necessarily owned by just the vendor or retailer.

One of the huge missing links in this discussion is the role of the distributor. In order to carry the quantity of inventory required for drop shipments in proximity to the customers, distributors become a critical strategic partner for both vendors and retailers.

As drop shipments accelerate, data is the new currency. Last-mile fulfillment at increasing speed requires real-time inventory across the interactive supply chains of vendors, distributors and retailers. The critical success factors will be inventory visibility, accuracy and speed.

Chris Petersen, PhD.
Integrated Marketing Solutions


All discussions around the "new" retail landscape (omnichannel) being transformed by the digitally-empowered shopper inevitably (and very quickly) lead to and include supply chain challenges. Successful digital transformation mandates that manufacturers of non-commodity goods must have 100 percent accuracy and visibility to the location of their inventory.


This requires not only integrating new technologies but redefining the existing business models and workflows that are outdated in a digital world. Simply trying to digitize the status quo analog world will not, and has not, worked. I've been preaching this for several years now and hope the new year will enlighten a manufacturer and/or retailer to listen and implement a change!


Adrian Weidmann

StoreStream Metrics






The unique logistical challenge is the requirement for collaboration, transparency and cross-company operations. This would solve the problem but very few companies are willing to take the steps to make it happen.


Camille P. Schuster, PhD.
Global Collaborations



Q: With DHL getting back into the US domestic parcel market, where was its former US air hub?

A: In Wilmington, OH, east of Dayton, in a facility it inherited when it disastrously acquired Airborne Express in 2003.

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