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July 17, 2020 - Supply Chain Flagship Newsletter

This Week in SCDigest

bullet Once Again, the Virus Drives All the Supply Chain News
bullet SCDigest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet New Stock Index/Green Supply Chain

New Cartoon Caption Contest!

bullet Trivia      bullet Feedback
bullet New Expert Column bullet On Demand Videocasts



A new report from ARC Advisory analyst Clint Reiser lays out the
landscape across WMS, WES and Warehouse Control System (WCS)
software, detailing the WES value proposition, and describing
important changes in the WES market.


first thought


Supply Chain Graphic
of the Week
Grocers, CPG Companies Struggle to Keep Shelves Stock


This Week's Supply Chain

by the Numbers

Amazon Loading Up on Larger Delivery Vans
Hair Testing could Push Many Drivers off the Road
US Manufacturing Output Up but Still Low


MIT Warehouse Disinfecting Robots


May 27, 2020 Contest

See Full Size Cartoon Submit Entry

It' Back! SCDigest's Weekly

Supply Chain Stock Index


pic GSC Feature Story:Bloomberg Says Amazon Evaluated but Rejected Idea to Push Customers to Slower but Greener Delivery Options

The State of Retailer-Vendor Supply Chain Relationships 2020

Are Things Getting Better and More Collaborative - or Heading in the Other Direction? Third Biannual Study - Please Participate


Weekly On-Target Newsletter:
July 15, 2020 Edition

Cartoon, Top SCDigest Stories of the Week

What to Do about Lack of Gender Diversity in Supply Chain Management

Abel Tamanji

Senior Student at University Of Wisconsin-Whitewater

The Foundations of Successful ASN Programs

Clarity, Detail and Sensibility

Eli Goldratt's impactful business novel "The Goal" introduced what supply chain technique?
Answer Found at the
Bottom of the Page

Once Again, the Virus Drives All the Supply Chain News

I think the current virus situation is well captured in considering an address Gov. Mike DeWine gave Wednesday in my home state of Ohio.

For weeks, DeWine had given an update on the virus situation in the Buckeye state at 2 o'clock each afternoon. More recently, with the state opening up and some reasonably good news on infection and death toll counts, those daily briefings largely went away.

But now, the virus numbers are rapidly heading in the wrong direction, worse in some states, better in others. In Ohio, the numbers are good in some counties, going fast the other way in others.


The virus has changed and will change our society in fundamental ways - and thus the supply chains that support how we live and work.


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Feedback here

No one knew what DeWine was going to say, now in an early evening address when the work day was done and the local TV channels would pick up the feed. Was the governor going to announce sweeping new restrictions and forced re-closings of various businesses? Or was he going to say "full speed ahead" for the opening path the state has been on?

Not only did we not know what direction DeWine would go, many of us, including me, were very unsure what we wanted DeWine's answer to be.

It turned out he mostly said to stay the course - but wear your face masks.

I went for more than two months writing about nothing in this column but the coronavirus and the supply chain starting in March, because as I repeatedly said then, who could really focus on anything else at the time?

But then the numbers turned better, the headlines started going away, and the grand opening ensued. I moved on to other topics. But now, the virus worry and headlines are back - and so is my focus on the subject again.

Let's start here. This week, the World Health Organization warned that there could be no return to normality any time soon, as too many countries were bungling their response to the coronavirus pandemic. WHO chief Tedros Adhanom Ghebreyesus said that if public health guidelines are not followed, the crisis will get "worse and worse and worse."

Whether the US bungled the response is a matter of debate. But regardless, CDC director Robert Redfield said this week that "I am worried. I do think the fall and the winter of 2020 and 2021 are probably going to be one of the most difficult times that we've experienced in American public health because of the co-occurrence of Covid and influenza." Yikes.

The warm summer weather has not as some predicted made the virus go away. Will cold fall and winter temperatures turn things worse than we saw this spring?

In more cheery news, Guy's and St. Thomas' National Health Service Foundation Trust in London released a study finding that people who have recovered from COVID-19 may lose their immunity to the virus within months, throwing the whole idea of "herd immunity" into question.

The study found that 60% of the patients had a "potent" antibody response at peak of their battle with the coronavirus. After about two months, however, just 16.7% of the patients had a potent antibody response, and it appeared totally gone in some.

Let's hope other scientists can't replicate the findings.

In the US, infections appear to have soared with the re-opening, at least in some states, though there was still some question about real levels versus just increased testing. That possibility was somewhat bolstered by the fact that the death tolls were flat or falling even with the rise in cases. Some suggested a rise in infections among younger people could explain that.

But now deaths do in fact appear to also be headed up.

"Cases began to rise on June 16; a week later, hospitalizations began to rise,"  The Atlantic magazine wrote this week, "Two weeks after that - 21 days after cases rose - states began to report more deaths. That's the exact number of days that the Centers for Disease Control and Prevention has estimated from the onset of symptoms to the reporting of a death."

So who knows where we go from here.

Turning back a little more specifically to the supply chain, an article this week in the Harvard Business Review web site commented on the changes coming to retail, noting that "The latest data from McKinsey shows that consumers are likely to keep the behaviors they've adopted amid stay-at-home orders, such as more online shopping and fewer mall visits."

I think we all know that.

More interestingly, the article says that "all retailers will have to make their in-store experiences even more extraordinary for those who can visit in person. They have to give people a reason to visit that is so compelling, it justifies their exposure to health risks and overcomes the inertia of the behaviors they adopted during the shutdown."

My question: is this really possible? I have my doubts.

We all know that coming out of this will be a big rise in use of robotics. With all their troubles with infections and plant closures, it should be no surprise that meat processors such as Tyson and others are reportedly accelerating plans to turn to robots.

Tyson, for example, is developing an automated deboning system to help butcher the nearly 40 million chickens it processes each week. Though it says humans are better at the job, the robots don't set sick.

The AP reported that robots that can cook - from flipping burgers to baking bread - are in growing demand as virus-wary kitchens try to put some distance between workers and customers.

For example, beginning soon, the White Castle burger chain will test a robot arm that can cook french fries and other foods. There were restaurant chains testing burger flipping and pizza making robots before the pandemic, but surely the virus will now accelerate the trend - especially as patrons are looking for touch-free experiences.

And I hadn't heard this one: As salad bars shut down, Hayward, California-based Chowbotics built Sally, a robot about the size of a refrigerator that makes a variety of salads and bowls. Sally lets customers choose from 22 prepared ingredients stored inside the machine.

Most US restaurant are small businesses - and small businesses are struggling. As the AP also reported this week, "Small businesses around the world are fighting for survival amid the economic fallout from the coronavirus pandemic. Whether they make it will affect not just local economies but the fabric of communities."

As just one example, the AP story includes a report on a banquet hall in Washington state called The Vault. Earlier this year, it had booked 40 wedding receptions for the Spring and Summer season - all wiped out from virus closings.

The owner was approved for just $3,200 of the nearly $25,000 she sought from the federal Payroll Protection Program - before learning even that wouldn't be coming. The business is alive - but just barely - for now.

The virus has changed and will change our society in fundamental ways - and thus the supply chains that support how we live and work.

The federal government, by the way, spent $2.7 trillion dollars more than it took in during the first 9 months of the year just ended in June. Compare that to the worst annual deficit of all time, $1.2 trillion for all of 2009.

I think you can expect more stimulus spending soon. The results of those deficits is hard to say, but whatever they are, it won't be good.

And by the way, last week the US called China's activities in the South China Sea, far away from its coast line, "illegal" - setting the stage for even more naval showdowns - and perhaps worse. This will not end well.

I hope to get back away from the virus soon - because things once again start to get better.

Any reaction to Gilmore's thoughts this week? Does the virus once again dominate all othr news? Let us know your thought at the Feedback section below.


On Demand Videocast:

Understanding Distributed Order Management

Highlights from the New "Little Book of Distributed Order Management"

In this outstanding Videocast, we'll discuss DOM, based on the new Little Book of Distributed Order Management, written by our two Videocast presenters.

Featuring Dan Gilmore, Editor along with Satish Kumar, VP Client Services, Softeon.

Now Available On Demand

On Demand Videocast:

The Grain Drain: Large-Scale Grain Port Terminal Optimization

The Constraints and Challenges of Planning and Implementing Port Operations

This videocast will provide a walkthrough of two ways to formulate a MIP, present an example port, and discuss port operations.

Featuring Dan Gilmore, Editor along with Dr. Evan Shellshear, Head of Analytics, Biarri.

Now Available On Demand

On Demand Videocast:

A Blueprint for WMS Implementation Success

If You Want a Successful WMS Project, You will Find the Blueprint in this Excellent Broadcast

This videocast lays out the keys to ensuring your WMS implementation goes smoothly, involves minimal pain, and accelerates time to value.

Featuring Dan Gilmore, Editor along with Todd Kovi of Radix Consulting and Dinesh Dongre of Softeon.

Now Available On Demand


After our column last week noting we've turned from toilet paper shotages to "where's the beef?", our friend David Schneider of David K. Schneider & Company sent us this nice email explaning how the meat supply chain works. Now you know!

Feedback on the Meat Supply Chain:


For beef (and lamb/sheep), there are two stages of meatpacking - Primal and Final.

Primal Cuts are the large cuts - whole sections of the animal, cut away from the carcass, later packed for processing into final cuts.

Some of the larger packing operations run from kill to final in the same complex - the traditional way that people think of a meatpacking plant. But many of the new massive campus operations, including the JBL and Tyson sites in the news, ship under long term contracts meat packaged for retail or portion control use.

For decades the meat supply chain operated at two levels; packing houses that shipped primal-and sub-primal - packaged into vacuum bags and frozen for shipping to grocery stores - where meat cutters cut and package the final cuts for sale at that location.

Today, a sizable portion of the production from the kill line is still primal to package and shipped to other companies/facilities that do the Final cuts. Most of the consumers of primal and sub-primal are wholesale distributors, local butchers, Costco, and Asian grocery, where there is still local meat cutting.

A large portion of the US grocery market no longer operates local meat rooms in their retail locations. Walmart is one significant example of the retail scene, as is most of the Royal Dalheize group (Stop-n-Shop, Giant), Aldi, Lidl, and other growing chains. Those contracts with retailers are under tight margins, costs supported by the typically much higher foodservice contracts with bigger and steady margins.

The supply chain innovation that Tyson, JBL, and the rest employed was centralization and concentration of labor into these large campuses - close to the production of the animals. Our modern network of refrigerated logistics - temperature controls trucks and warehouses - helps facilitate the consolidation of the final steps of meat cutting from local to the market to local to the source.

Primal cuts flow between companies in the meat industry like cash - and interesting features in the USDA regulations allow for long term freezing of primal cuts that can sell later as fresh meat. There are times where hundreds of millions of pounds of frozen primal cuts sit in 3PL freezer warehouses. I suspect at this moment, hundreds of millions of pounds of frozen primal cuts sit in warehouses, unable to move to the market because there are fewer places that can do the final cut. I suspect the owners of this meat don't want to ship these cuts because to ship now erodes the future profit margin of the packaged and portion-controlled product.

The COVID virus exposes a substantial risk of consolidation and full-integration of production in the supply chain.

David K. Schneider
David K Schneider & Company, LLC    


Q: Eli Goldratt's impactful business novel "The Goal" introduced what supply chain technique?

A: Theory of Constraints

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