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February 1, 2019 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet The Gurus Are Back! 2019 Supply Chain Predictions bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Distribution Digest/Green Supply Chain
bullet Cartoon Caption Contest Extended bullet Trivia      bullet Feedback
bullet Expert Columns bullet On Demand Videocasts




WMS Cloud is Ready for Prime Time 2018

Lessons Learned from Actual Deployments, as Number
of Cloud WMS Implementations Accelerate

first thought


Supply Chain Graphic of the Week

Uber Freight Targeting Bad Consignees


Major Change in Foxconn US Factory Plans

Amazon Flex Drivers Worried
AI will Indeed Eliminate Many Jobs
Giant Foods Building eCom Only Store


January 1, 2019 Contest

See The Full Cartoon and Send in Your Entry Today!



Feature Story: New Ambidextrous Robot May Improve Automated Piece Picking Capabilities


pic GSC Feature Story: Climate Leadership Council Continues Push for Carbon Tax and Dividend Back to Taxpayers to Reduce CO2

Weekly On-Target Newsletter:
January 30, 2019 Edition

Cartoon, Continuous Planning, Amazon Parcel, RFID Breakthrough, More

WMS Cloud is Ready for Prime Time 2018


"Let's Get Ready to Rumble"

by Richard Wilhjelm
VP, Sales & Marketing
Traverse Systems


Supply Chain Wars: Episode IV - A New Hope

by Henry Canitz
Product Marketing & Business Development Director



What are China's logistics costs as a percent of GDP?

Answer Found at the
Bottom of the Page

The Gurus Are Back! 2019 Supply Chain Predictions

We're back as we have done for many years running with predictions for the year 2019 in supply from a virtual panel of supply chain gurus.

In fact, most of our prognosticators are back from 2018, 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.


Another key trend, Ghopal says, is the integration of the customer experience and the supply chain.


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Let's start with my friend Mike Regan of TranzAct Technologies, whom I will note was predicting the "perfect storm" that drove trucking costs way higher in 2018 well before it happened.

However, 2019 will be a year for shippers to regroup and recover from the Perfect Storm, Regan says now.

"Carriers benefitted from a seller's market in 2018, and few shippers were prepared for the double-digit carrier rate increases that blew out freight budgets and resulted in significant unfavorable variances," Regan notes. "It was the year freight went from the docks to the boardroom and demanded that C-Level executives finally take a keen interest in strategies to reduce their company's freight costs."

As shippers move to clean up after the storm, Regan predicts these will be among the top concerns:

Market volatility: Regan says that while rates went only one direction last year (up), shippers will see significant rate fluctuations in both directions in 2019.

Why? Carriers are intent on maximizing their capacity and have the data and the technology to respond to market directions and change pricing "on the fly." For example, he notes in Q4 there was a 20%+ change in spot market rates for refrigerated truckload moves.

"If they have any excess capacity, carriers will quickly lower rates; if capacity is tight, they will quickly raise their rates," Regan says.

But remember, Regan adds, capacity remains tight, so even small blips on the transportation radar will have a disproportionately large impact on rates.

Data Analytics:
Regan says that in 2019, carriers will continue to improve their use of data to analyze and understand their customers.

"In many instances, carriers already know a shipper's freight better than the shipper," he observes. "In this post-ELD and dimensionalizer (for LTL carriers) world, they know how long a shipper is utilizing their assets and the space being consumed on their trailers."

Carriers (especially LTL) will continue focusing on density and dimensional based pricing to improve their operating ratios, Regan says, adding that all carriers will penalize shippers for excessive detention/demurrage as they look for capacity that provides a suitable ROI.

"Shippers who live in an "Excel" world (a.k.a. shippers who manage their transportation area with Excel spreadsheets) are in for a world of hurt in 2019," he says.

Next, my good friend Gene Tyndall, exec VP at Tompkins International and now running the company's interesting MonarchFx efulfillment network. He has offered predictions each year since I started doing this in 2008.

Let's give Gene credit for starting off by reviewing his top three predictions for 2018, which were as follows:

• More innovation and transformations, although not necessarily the right investments.

Continued amazing growth of ecommerce, with impacts all industry segments.

Expanded disruptions, due to customer demands, new technologies, and the ever-increasing "needs for speed".

Tyndall says that "These three proved to be consistent with overall strategic trends, but were not necessarily the overwhelming drivers of all tactical changes we observed this year. Too many other factors had serious impacts, such as the economy itself; the sociopolitical conflicts; and the "Trade Wars," impacted supply chains significantly."

Tyndall's first prediction for 2019 is explosive ecommerce growth will impact companies even more comprehensively.

Now that is not exactly a risky prognostication, but I think he is right that the ecommerce megatrend impacts everything - business strategy operations strategy, and supply chain planning and execution.

"Whether selling direct to consumers, or to businesses, ALL companies must transform their supply chains to achieve high levels of performance for ALL channels, or risk losses in brand recognition, market share, and/or profit," Tyndall says.

He likes the term "unified commerce" as an alternative to "omnichannel," a concept that involves all channels operating in an integrated way so as to present a single view of the truth (and experience) to customers. Pressure to achieve unified commerce will intensify this year, Tyndall says.

He also predicts we will see much more relocation of assets, sources, distribution, flows of goods, and business processes in 2019, in a trend that he says is already well underway.

What's that all about?

"The unpredictable global economic climate, changes in Trade Agreements, increases in cross-border orders, sociopolitical concerns, and targeting new markets will combine to change global supply chains" this year, Tyndall says. As a result, international transportation and trade will return to corporate agendas, he says, though in a different way than when China was becoming the "world's factory" in the early 2000s.

A variety of forces are pushing sourcing out of China for many companies. But alternatives, such as Vietnam, Indonesia, and India, have inadequate supply chain infrastructures, and there can be sustainability and ethical sourcing issues too. So such moves need to be taken very carefully, Tyndall notes.

Some of that asset shift involves bringing back manufacturing to the US, with Tyndall citing the recent announcement by shoe maker New Balance on a new advanced manufacturing facility in Massachusetts as an example of this Trend. The [slow] return of textiles production in the US. is another sign, as is the regeneration of steel manufacturing.

But the shifting of logistics assets in an Amazon world is even more impactful, Tyndall says, adding that the logistics landscape is "changing in historic ways." As part of all these operational changes, deployment of robotics in the supply chain will simply become an imperative, Tyndall says.


Our friend Dr. Chris Ghopal, consultant and academic, identifies three key trends for 2019. The first involves the people side of supply chain.

He notes that "While the shortage of fulfillment center/DC workers and truck drivers, driven mainly by ebusiness, is dominating the news, it is the shortage of qualified supply chain professionals that will prove the true constraining factor."

In fact, he says that the term of the day is "talent development and management." While an increasing number of universities are providing supply chain degree and certification programs, there are still too few, and, he says, many of these are mired in the past - either academically or in industry practice. As a result, universities are not meeting the needs of industry.

Another key trend, Ghopal says, is the integration of the customer experience and the supply chain - an areas that will also drive much innovation.

This integration already has a start in the buzzword realm, Ghopal says, with one executive telling him he was thinking of using the term "Customer Chain."

"It is becoming increasingly apparent that the battleground for the consumer is about more than just price - it is the customer life cycle experience that drives revenue, incremental revenue, customer retention, brand equity and the net promoter score," Ghopal adds, noting that "The bulk of the customer experience is driven by the supply chain - from the ease of doing business (EODB), speed, perfect order and on-time delivery, inventory availability, customer communication, convenience, returns, packaging, ease of change by the customer, mobility and tracking and, of course, upfront transparency and price."

Now, he says, supply chains, historically driven by lowest total cost, are being designed from the "customer back."

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 2019 supply chain predictions? Let us know your thought at the Feedback button below.


On Demand Videocast:

Digital Transformation's Value to the Supply Chain

The Future of Order Management

This videocast breaks down what digital transformation is and how automated order management solutions equate to supply chain benefits.

Featuring Dan Gilmore, Editor along with Esker's Dan Reeve.

Now Available On Demand

On Demand 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.

Now Available On Demand

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


We received several emails on Dan Gilmore's First Thoughts column on his supply chain Christmas wish list for 2018 - including an interesting note from Jim Tompkins.

Feedback on Christmas Wish List:


Thanks for the note on "My friend Jim Tompkins is still thought leading, but he has a lot of business irons in the fire right now and seems to have slowed down a bit on the thought leadership side."


Sorry we have not been in touch on this. In my view, my thought leadership hit an all time high in 2018. Please consider

• Distributed logistics (LaaS-Logistics as a Service)
DIFF- Distributed Inventory Flow Forecasting: Multiple fulfillment locations without increased safety stock
MSP- MONARCHFx Sellers Platform: Self registration and integration platform
Tompkins Robotics- 9 Patents, more coming
New Retail: Uni-marketing, Uni-channel and Uni-logistics
Robotic induction
Disruption cycle
Digital Enterprise World
The challenge of brittle solutions due to uncertainty over uncertainty
Demand shaping application
Speed of implementation

I believe your perception of "slow down" is a result of current thought leadership is less published as thought leadership and more positioned as entrepreneurial deployment (thus your view of "irons in the fire"). So, application of thought leadership is at all time high, but number of thought provoking keynotes is down.

As always Dan, good stuff.

James A. Tompkins, Ph.D.
Chairman and CEO
Tompkins International





An interesting list of supply chain wishes.


I had not really thoughts about the fact that we lack clear supply chain thoughts leaders - think this observation is spot on.


What is driving this problem is not clear, however. Surely they are out there somewhere.


Ron Halpin
Toledo, OH






You might hope supply chain academic research was more valuable, but Santa is unlikely to grant your wish.


Academics in all disciplines write for each other and to get published, with little concern over whether there is any practical value.


As you note, a lot of talent and opportunity basically wasted. But it will never change.


Thomas Wright
San Diego



Q: What are China's logistics costs as a percent of GDP?

A:About 14.9% in 2016, the last estimate we can find. That compares to 7.7% in the US in 2017.

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