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Top Supply Chain Stories by Month 2022 - Complete List


 

Amid War and Soaring Inflation, These Stories Stood Out

 

Jan. 29, 2023
SCDigest Editorial Staff

Last week in our flagship newsletter, SCDigest editor Dan Gilmore offered his list of the top supply chain stories by month. But due to space limitions of the newsletter format, Gilmore listed just one or at most two top stories per month.

 

But more than that caught our eye last year, so as promised here we have our complete list.

 

We hope you enjoy.

Supply Chain Digest Says...

 
Any top story you thnk we missed? Let us know at th link below!  
 

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January 

Among the oddest stories thus far in 2022, there is widespread reporting that brazen thieves are opening intermodal containers as freight trains slow down or stop as they approach depots in downtown LA. That also leaves a trash mess around the rails from items the thieves don't want.

 

The queue of ships waiting to unload at the ports of Los Angeles and Long Beach reaches a record high of 105, even as peak season has ended weeks before.

 

News that Walmart is expanding its item-level RFID mandate to home goods, announced in a letter to its vendors. Walmart said it has been implementing item-level RFID tags on apparel over the past year and now is expanding that to home goods. That includes including kitchen and dining products, home decor, bath and shower, bedding, furniture, and storage and organization products. The memo also suggests more categories will have similar tagging mandates in the future.

 

February

 

Russia invades Ukraine late in the month, expecting rapid victory and welcoming crowds, only to find fierce resistance and military set backs. The war has a big impact, sending oil and natural gas prices higher as well as causing rising food and cooking oil prices as well and continus on.

 

4000 automobiles are destroyed as a cargo ship catches fire not far off the coast of Portugal on its way from Germany to the US, including Porsches, Volkswagens, Lamborghinis, Bentleys and Audis. The value of those cars is estimated at $334.5 million by consulting firm Anderson Economic Group. The fire started in the hold and spread quickly, forcing the crew of 22 to abandon the ship via helicopter. A number of electric cars were on the ship, leading to speculation a lithium ion battery on car started the fire, or that it started from some other cause and the batteries accelerated the spread. The ship sinks when being towed to a port.

 

TuSimple announces its driverless truck technology has made seven totally automouss between Phoenix and Tuscon in recent weeks. It added that these trips were taken under various road conditions, including dense early-evening traffic and back-to-back runs on the same night. The tests also did not use teleoperation or traffic intervention along the way. The bigger news is that based on the success of these tests, rail carrier Union Pacific will use TuSimple equipped trucks to move freight between Tucson and Phoenix starting later in 2022, the company's first customer for autonomous trucking services.

March

Reports that apparel maket Untuckit has 177,0000 items that were supposed to arrive via ocean container by the end of December but that still hadn’t arrived by the beginning of March. When the winter garb does show up, the company plans to pack it away for next year – absorbing lost sales this year of about $15 million, as global shipping woes continue.

 

Amazon wins a second vote on unionization at a fulfillment center in Bessemmer, Alabama, with workers once again rejecting the Retail, Wholesale & Department Store Union - albeit by a smaller margin. This after a National Labor Relations Board official ordered a redo after Amazon won the first vote in 2021, citing alleged illegal behavior by Amazon leading up to the first vote.

 

However, Amazon FC workers on Staten Island won a bid to form a labor union after federal officials tallied votes at an FC there. If a union is ultimately formed, it will become the first and only Amazon FC to unionize anyere in the country. However, Amazon prevails in vote at an a sortation center in the same campus area, where workers  in early May voted down organizing with the same make-shift union that won the first vote.

 

News that 3PL company Performance Team will soon add 300 heavy duty electric trucks to its North America network. The e-trucks will come from Swedish company Einride. The trucks will be delivered between 2023 and 2025, and the order comes after Performance Team was acquired by ocean shipping giant Maersk Line in 2020. Maersk says this is the largest announced plan for electric truck deployment to date in the US.

April

Walmart announces that some first year truck drivers for its private fleet are now able to earn as much $110,000 per year, up from $87,000 before. Walmart also says a first year drivers can enjoy as many as 21 paid vacation days in 12 months. Other elements of Walmart’s program includes improved schedules that give drivers more time at home.

 

8000 luxury cars sitting at Belgium’s Port of Zeebrugge are stranded because they were headed to Russia. The cars, which include the latest Lexus, Cadillac and Mercedes models, arrived from Asia in early April. But now the vehicles come under a ban against luxury goods exports to Russia as part of the sanctions stemming from the Ukraine invasion. In fact, there is a whole range of products stuck at Zeebrugge because of sanctions.

May

 

At its Q1 earnings call, Amazon says it now has too many logistics workers, after two years of torrid hiring. Amazon now says that it hired too quickly in its fulfillment centers during the pandemic, and now has a surplus of workers, a situation that wlll not take too long to address through attrition. A short time later, Amazon also says it has too much FC space too, with reports it is subletting space in some markets and also delaying opening some FCs.

Gartner releases its top 25 supply chains list for 2022. This year Cisco Systems comes out on top for the third year in a row - sort of. We    put it that way because again in 2021, Apple, Procter & Gamble, Amazon, McDonald's and Unilever were left off the formal top 25, as those five companies have been placed in a separate relatively category called "supply chain masters," a sort of supply chain hall of fame. The rest of the top 10 after Cisco were was (2) Schneider Electric; (3) Colgate-Palmolive; (4) Johnson & Johnson; (5) PepsiCo; (6) Pfizer (7) Intel; (8) Nestle; (9) Lenova; and (10 - surprisingly) Microsoft.

 

Ecommerce store front software vendor Shopify announces it has acquired software firm Deliverr for $2.1 billion in cash and stock, enabling what Shopify founder and CEO Tobi Lütke says will be an “end-to-end logistics” platform for millions of merchants. Deliverr offers software that predicts the demand for each product by market based on a number of variables. Shopify had previously announced it was building out a fulfilment network for its web merchant customers that would rival Fulfilled by Amazon.

June

Walmart says it will be expanding its “DroneUp” delivery network to 34 sites by the end of the year, with a reach across six states and up to 4 million households. The program, which focuses on Arizona, Arkansas, Florida, Texas, Utah, and Virginia, will provide the ability to deliver up to 1 million packages by drone per year.

 

CSCMP and Kearney release the 2022 State of Logistics report. The headline news: what the report several years back started calling US Business Logistics Costs (USBLC) rose sharply on an absolute basis in 2021 to $1.85 trillion. That was an increase of 22.4% from an economically weak 2020. With a smaller increase in US nominal GDP (10%) than logistics cost rose last year (22.4%), that took the relative cost of logistics as a share of GDP to 8.0%, up significantly from 7.44% in 2020.


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July

Members of the International Longshore and Warehouse Union (ILWU), which represents West Coast dock workers, begin working without a contract after the current one expired at the end of June. Negotiations with the Pacific Maritime Association (PMA), which represents ports and terminals, began in May and a settlement appears to be still well off – with port automation said to be key issue, leaving some to fear a stalemate that will lead to a dock worker strike and resulting supply chain chaos.

News that Walmart is implementing new logistics fees for some of its suppliers, asking them to “share” rising transportation costs with the retail giant. Suppliers using Walmart’s Collect shipping program, where Walmart manages freight costs, will now be subject to a new pick-up charge based on a percent of the supplier’s invoice. Also being implemented is a new fuel surcharge that will change daily calculated daily based on market conditions.

Walmart and Target both issue profit warnings based on changing consumer buying patterns that are leaving the two retail giants with excess inventory. Walmart says consumers are avoiding purchases outside of food and gasoline, leading to lower profits and too much inventory in many categories, such as apparel, furniture and home products. “The increasing levels of food and fuel inflation are affecting how customers spend,” Walmart CEO Doug McMillon said.”

August

Amazon launches a new service under which it will handle last mile delivery for other brick and mortar retailers in a dozen metro areas, including Atlanta, Chicago, and Seattle. Retail partners include PacSun, GNC, and Superdry. Amazon will use its contract Flex drivers to make the deliveries, which will cost $2.99 or be free for Prime members for orders over $25.00 in value. Under the program, retailers will fulfill orders from inventory in their stores, and a Flex delivery driver will pick them up from the retailer.

The well-publicized queue of ocean container ships awaiting a berth at the ports of Los Angeles and Long Beach is over, with ships at sea down to just eight during on August 29, an all-time record low. That was down from 109 in January, which led to a wait of more than two weeks for ships to unload, causing supply chain chaos and help to push rates much higher.

Reports that even as port delays dwindle, backups at rail hubs are becoming the new key issue. Rail delays have increased the ports’ terminal dwell times. The rail carriers, port officials say, are hampered by a lack of both equipment and rail workers. Unions say a key problem is that railroads laid off about 45,000 workers during the pandemic starting in 2020.

September

The port of New York and New Jersey exceeds the combined TEU volume of the long-time container handling leaders at the ports of Los Angeles and Long Beach – a trend that continues in October and November and will do so again in December when the numbers come out, an executive at the New York port recently told CNBC. What is going on? Some shippers started moving containers to East Coast ports to avoid the delays seen until recently at LA/Long Beach or in reaction to a possible strike by West Coast stevedores.

The Wall Street Journal publishes an article saying its analysis showed Amazon hired more risky freight carriers - based on US DOT safety ratings –than most other shippers over the past two years. The analysis is focused on the carriers Amazon hires to move merchandise to its fulfillment centers and delivery stations, frequently in company branded trailers. “Trucking contractors that worked frequently for Amazon were more than twice as likely as all other similar companies to receive bad unsafe driving scores,” the WSJ says. Amazon responds that this data is dated, and that the current picture is much different.

FedEx announces a record average general rate increase for parcel shipping of 6.9% for 2023. UPS later matches that increase in October. FedEx and UPS raised shipping rates by an average of 5.9% for 2022, the first time in eight years that either had increased prices more than 4.9%. FedEx also says it is adding a number of other fees and surcharges.

October

In its latest analysis, the American Trucking Association pegs the US truck driver shortage at 78,000, down a few thousand from the ATA number of 81,000 projected in last year’s report. The ATA adds that based on current driver demographic trends, as well as projected growth in freight demand, the shortage could swell to more than 160,000 over the next decade. We’ll note some believe the driver shortage is greatly exaggerated.

Low water levels on the Mississippi Rivers and connecting waterways threaten barge transport of goods, especially agriculture, forcing some movements to be cancelled or reducing the amount of cargo moved on a ship. This is a major issue, as barges consistently moved around 13% of all US bulk grain and 47% of all grain destined to export markets. The dire situation has improved recently with some December rains.

Another vote on unionization at an Amazon Fulfillment Center in the Albany NY,

area was held, and once again workers said No – decisively so. 66% of workers voted not to join a union, once again dashing the hopes of labor that this vote could be a catalyst for organizing the retail giant’s hundreds of facilities. This makes it 3 out of 4 Amazon logistics sites rejecting unionization in 2022.

Walmart announced it was acquiring Alert Innovation, a provider of so-called micro-fulfillment technology to power largely in-store ecommerce order picking. Though coming in different flavors, micro-fulfillment systems in general are characterized by high density SKU storage in a relatively small space – maybe 10,000 square feet - and use of a shuttle system that put away and selects products for customer orders at high speed, delivering them to work stations where humans assemble the items into grocery bags.

November

The US Congress passes and president Biden signs legislation that would imposed a contract on rail workers based on a deal reached in September with a dozen unions representing 115,000 workers. That avoided a potential strike called for beginning on December 9, with a likely hard hit to the US economy and create supply chain woes along with it. Many of the 12 unions representing rail workers approved the contract, which included wage gains of 24%, but several did not, citing lifestyle issues such as paid time off and mandatory overtime as key objections.

Thought by some to be lagging in the drone delivery wars, Amazon announces its newest drone mode, the MK30, will be lighter and smaller than the MK27-2, its predecessor unit. It will also have increased range, expanded temperature tolerance, and new safety features. It will also add the capability to fly in light rain, enabling customers to choose drone delivery more often as their method of choice. The hexagon-shaped aircraft weighs 80 pounds and is about 5.5 feet in diameter. Custom-designed propellers reduce the perceived noise by 25%, Amazon said. The drone can fly up to 50 mph and carry parcel of five pounds.

Cloud software giants Microsoft and Amazon’s AWS web services unit announce major supply chain software offerings. First, Microsoft releases what it calls the Supply Chain Platform, with a wide range of software tools, including from third-parties. That includes, the company said, the Microsoft Supply Chain Center, which will track world events that may impact a customer's supply chain, orchestrate actions across a supply chain, and use AI to reduce supply and demand mismatches. A week or so later, AWS says its new planning software will leverage machine learning in a way that will give companies greater insight into the current and future states of their inventory.

December

At a major event on Friday, the battery-powered Telsa Semi was launched as a commercially available product, with news that PepsiCo receiving the first vehicle. It’s been a long haul for the electric truck. The company's CEO Elon Musk first announced the cargo truck plans in 2017, with stated expectation for a commercial launch in 2019. At the announcement, Musk also said that on a November 25 test drive, a fully-loaded Tesla Semi (81,000) pounds traveled 500 miles on a single charge.

FedEx Freight announces it is testing so-called dimension weighing with some customers of its less-than-truckload (LTL) freight shipping services. Dimension weighing, in use for several years now by major parcel carriers including FedEx, in great summary can add to the cost of shipping if the cube (length x width x height) exceeds set targets versus the weight of the shipment. The pilot, which FedEx calls “space and pace” pricing, simplifies its pricing structure by removing the need for complex freight classifications under the National Motor Freight Classification pricing system, which is based on factors including density and stowability, according to FedEx. In other words, shippers will pay the greater of the weight or cube pricing calculations.

A study by the American Transportation Research Institute (ATRI) finds infrastructure issues to constrain the move to battery powered electric trucks, finding that relative to a nationwide charging network that “It is not yet clear how large this network will need to be nor the costs necessary to build it,” and that “Full electrification of the US vehicle fleet will result in a large increase beyond the country’s present electricity generation.

There you have - what did we miss

 

 What are your thoughts on our list of the top supply chain stories of 2022? Let us know your thoughts at the Feedback section below.

Your Comments/Feedback

Srihari

Senior Consultant, Infosys
Posted on: May, 22 2016
Great article. I am a little suprised not to see BNSF in the mix while I understand their financial mode/operation is a little different. 

That would only give a complete perspective with all the players in the pool.

Mike O'Brien

Senior editor, Access Intelligence
Posted on: May, 26 2016
Surprised to see Home Depot fall off the list; thought they were winning with Sync?

Julie Leonard

Marketing Director, Inovity
Posted on: Jun, 27 2016
Using the right tool for the right job has always been a best practice and one of the reasons, we feel, that RFID has never taken off in the DC as exponentially as pundits have been forecasting since 2006. While these results may seem surprising to those solely focused on barcode scanning, the adoption of multi-modal technologies in the DC makes perfect sense for greater worker efficiency and productivity.

Carsten Baumann

Strategic Alliance Manager, Schneider Electric
Posted on: Aug, 19 2016

The IoT Platform in this year's (2016) Hype Cycle is on the ascending side, entering the "Peak of Inflated Expectation" area. How does this compare to the IoT positions of the previous years, which have already peaked in 2015? Isn't this contradicting in itself?

Editor's Note: 

You are right, Internet of Things (IoT) was at the top of the Garter new technology hype curve not long ago. As you noted, however, this time the placement was for “IoT Platforms,” a category of software tools from a good number of vendors to manage connectivity, data communications and more with IoT-enabled devices in the field.

So, this is different fro IoT generally, though a company deploying connected things obviously needs some kind of platform – hoe grown or acquired – to manage those functions.

Why IoT generically is not on the curve this year I wondered myself.

 

 

Jo Ann Tudtud-Navalta

Materials Management Manager, Chong Hua Hospital, Cebu City, Philippines
Posted on: Aug, 21 2016

I agree totally with Mr. Schneider.

I have always lived by "put it in writing" all my work life.  I am a firm believer of the many benefits of putting everything in writing and I try to teach it to as many people as I can.

This "putting in writing" can also be used for almost anything else.  Here are some general benefits (only some) of "putting in writing":

1. Everything is better understood between parties involved.  There are lots of people types who need something visual to improve their understanding.
2. Everyone can read to review and correct anything misunderstood.  This will ensure that all parties concerned confirm the details of the agreements as correct.  This is further enhanced by having all parties involved sign off on a hard copy or confirm via reply email.
3. Everything has a proof.  Not to belittle the element of trust among parties involved, it is always safest to have tangible proof of what was agreed on.
4. There will be a document to refer to at any time by any one who needs clarification.
5. The documentation can be useful historical data for any future endeavor.  It provides inputs for better decisions on related situations in the future.
6. This can also be compiled and used to teach future new team members.  "Learn from the past" it is said.

There are many more benefits.  Mr. Schneider is very correct about his call to "put it in writing".





Sandy Montalbano

Consultant, Reshoring Initiative
Posted on: Aug, 24 2016
U.S. companies are reshoring and foreign companies are investing in U.S. locations to be in close proximity to the U.S. market for customer responsiveness, flexibility, quality control, and for the positive branding of "Made in USA".

Reshoring including FDI balanced offshoring in 2015 as it did in 2014. In comparison, in 2000-2007 the U.S. lost net about 200,000 manufacturing jobs per year to offshoring. That is huge progress to celebrate!

The Reshoring Initiative Can Help. In order to help companies decide objectively to reshore manufacturing back to the U.S. or offshore, the nonprofit Reshoring Initiative's free Total Cost of Ownership Estimator can help corporations calculate the real P&L impact of reshoring or offshoring. http://www.reshorenow.org/TCO_Estimator.cfm

Robert

Transportation Manager, N/A
Posted on: Aug, 30 2016
 Good article!  I am sending this to my colleagues who work with me.  We have to keep this in mind.  Thanks!

Ian Jansen

Mr, NHLS
Posted on: Sep, 14 2016
SCM is all about getting the order delivered to the Customer on date/ time requested because happy Customers = Revenue. Using the right tools to do the right job is important and SCM is heavily dependent on sophisticated ERP systems to get right real data info ASP.

I've worked in a DC with more than 400,000 line items and measured the Productivity of Pickers by how many "picks" per day.

I've learned that one doesn't have to remind Germany about your EDI orders.

Don Benson

Partner, Warehouse Coach
Posted on: Sep, 15 2016
Challenge - to build and sustain effective relationships at the level of the organizations that are responsible for effectively coordinating and colaborating in an otherwise highly competitive environment 

Jade

Admin, Fulfillment Logistics UK Ltd
Posted on: Oct, 02 2016
Of course we all need to up our game. We need to move with the times, and always be one step ahead of what the future will bring.

Mike Dargis

President of asset-based carrier based in the Midwest, Zip Xpress Inc. (at ZipXpress.net)
Posted on: Oct, 03 2016
Thanks for the article, but I know there's a lot more to this issue than just the pay rates. Please check out my blogs on the subject at www.zipxpress.net.

Blaine

Inventory Specialist, Syncron
Posted on: Nov, 16 2016
Lora, great article! I agree that companies choose the 'safe' solution more often than not. My solution is a bolt-on for legacy ERP's and we even face challeneges of customer adoption. Most like to play it safe and choose an ERP upgrade, which is more costly, time consuming, and has lower ROI across the board. Would love to learn more about your company, we are always looking for partnerships.

Blaine
blaine.schultz@syncron.com

Bob McIntyre

National Account Executive, DBK Concepts LLC
Posted on: Nov, 21 2016
This is a game changer in GE's production and prototyping.  It also has huge implications across the GE global supply chain with regard to the management of their support and spare parts network. 

Kai Furmans

Professor, KIT
Posted on: May, 22 2017
I am referencing to the comment that leasing of warehousing equipment (beyond forklift trucks) is a vision for 2030.
Just recently in Europe, such a business model has started, see here: https://next-intralogistics.de/

I am following with a lot of interest, how the business develops.

Stuart Rosenberg

Supply Chain Consultant, First Choice Supply Chain
Posted on: Jun, 05 2017
If we limit the standard on judging or determining the best supply chain to just three calculations it does not tell the entire picture.  Financial performance metrics are valuable as they capture the economic consequences of business decisions.  But supply chain managers make decsions and use organizational resources that impact a company's financial well being.  Where is a firm's earnings over a period of time determined by sales less product costs and general/adminsitrative costs?  Where is the metric for determining the sources and uses of cash from three perspectives - operational, investment and financial?  Where are these supply chain metrics: on-time delivery, lead time, response time to customers, product returns, procurement costs, network distance, inventory carrying costs, forecasting accuracy, sourcing time, etc,.  Without knowing the results of all these supply chain calculations the there must be a question as to the accuracy of the 25 top supply chains.

Dustin Calitz

Project Commercialization Manager, Mondelez
Posted on: Jun, 06 2017
I feel this ranking misses the mark in SC. It does not seem to consider a key indicator in days inventory on hand, which is key to determining a SC company's ability to forecast, manage inventory costs and reduce aged stock. In additiion I realize it's difficult to understand what goes into the customer survey, but would I assume specific metrics are being asked. For examples customer's opinion on service level differentiation and the ability to deliver the right product on time, which should then be allocated a bigger weighting than 10%. It would also be interesting to take a view of the above list's SKU portfolio complexity, seasonality and launches/promotions. I would again assume some companies on the list above have a far more complex SC to manage and lead, ultimately requiring a lot more innovation within a SC to stay ahead of competitors, and ultimately satisfy their customers demands.  I understand above metrics are difficult to measure, as mentioned in the article, but they somehow need to be considered to give a true reflection. 

Michael Hurd

Lean Consultant, Unemployed
Posted on: Jun, 10 2017

A Very Good Article...

While some feel that lean is a scam that pushes for more out of the personnel and out of the companies through reduction of waste and adding value for the customer, there are several things to remember:

1) Lean methodologies are designed and implemented to reduce time wasting, so this may seem that you are working harder as an employee.

2) Lean methdoligies only work when everyone from the janitor to the owner of the company get involved and back the program.

3) Lean methods are there to make you work smarter not harder, although it may feel you are working harder.

4) YES... Sometimes lean methodologies fail! This is due to project overun or taking on too large a problem and trying to fix it all in one go and not taking the smaller problems that are associated with the large problem and fixing them first. Sometimes fixing the small problems leads to resolution of the larger problem.

Akhil

Director Supply Chain , skuchain
Posted on: Jul, 31 2017
The Supply Chain technology is not considered a problem because traditionally supply chains are thought to be cost centres unlike sales functions. The tendency, in general, to limit expenses and cost cutting on upgrades for technology and for talent have been hindering progress for the businesses. Supply chains lack real time visbility and above all trust across the value chain (not that the participants are dishonest) rather it's about the cascading effects referred to as the bull-whip effect which causes higher magnitudes of disruptions. 

Supply chain real time information should top the list .

Another problem is that of multi homing as so much data is available across several feeds of IOT/Email/Internet /Mobility/ERP that organisations tend to have issues around finding a single platform to collate them for meaning analysis. 

Blockchain (if deployed appropriately) can be a great solution for solving the issues around the supply chain.

Mike Ledyard

Vested Program Faculty, Vested Way / University ofTennessee
Posted on: Aug, 04 2017
Excellent article.  It very much points to the need for Shared Risk / Shared Reward as we teach at Vested.  Suppliers will respond when they are made part of the team, and they have a lot to bring to the game.  The service provider is the subject matter expert in the services provided, and in an excellent position to enhance the capabilities and services offered by the shipper.

Andrew Downard

Managing Director, AD Supply Chain Group Pty Ltd
Posted on: Aug, 05 2017
As the article points out it is not a lack of technology that is holding back performance but rather a failure to form the right sort of relationships.  As well as the length of such relatiohships, practitioners should consider employing arrangements that incentivise both parties to innovate and deliver levels of performance and profit that neither thought possible.  By far the best model I have come across to achieve this is the Vested Outsourcing model developed by researchers from the University of Tennessee.  See www.vestedway.com for information on the model and case studies that show how others have benefited from creating a Vested deal.

Najma

logistics, threelineshipping
Posted on: Aug, 23 2017
Very informational article. The major focus of logistics is on e-commerce. There is a need to optimize every component of logistics by following the latest trends and technologies. Thanks for uploading this article.

Sameer Shukkla

Consulting Partner, Wipro Inc.
Posted on: Sep, 17 2017
I have recently co-authored a white paper with my colleague wherein we have looked at 2 fundamental guiding principles  -

1. Always have enough to Sell / Produce
2. Do not have excess to Sell / Produce

These 2 Golden Rules can be the foundation of keeping optimal inventory levels and for organizations to achieve the same. We have looked at a framework which tries to reduce the phase mismatch between Demand & Supply, and tries to bring the shape of the supply curve closer to shape of the demand curve.

We have classified symptoms and underlying root causes for the above "Phase mismatch" and "Curve Mismatch" between Demand and Supply, and then talked about addresssing those individual root causes to strive towards Leaner Inventory levels while maintaining or improving service levels.

So to answer your question, we feel the Companies which have addresed these causes have been able to keep DIO horizontal or even going down, while others have not been able to control rising DIO because of not addressing the root causes.

Simon Eagle

SCM Consultant, Camelot MC
Posted on: Sep, 17 2017
You ask why turns are flat or declining despite lots of attention and technology. The answer is, I think, 2 fold: the supply chain environments VUCA (Volatliity, Uncertainty, Complexity, Ambiguity) is on a continuous upward curve and this means that forecast accuracy inevitably declines in parallel - and much of that inaccuracy is hidden by the statistics. For instance a company with, seemingy good, 80% mix accuracy will find that figure is skewed so high by the few high volume / low variability items. 80% of the items will be achieving considerably less than 60% error.

So most item level forecasts used for driving replenishment through an MPS (be it ERP or APS) are simply leading to unbalanced stocks, service threats and continuous expediting / fire-fighting. These schedule interrutions are "variability" that is disrupting flow and, thereby, increasing lead-times, using unplanned capacity and generating excessive (and still unbalanced) inventories.

The replacement in ex-stock supply chains is "enterprise(s)-wide" pull which also uses "push" for extreme/exceptional events. Its other key characteristics are that the supply chain is decoupled and is demand-driven. And now it can be implemented using SAP since they announced they they have co-developed an enhancement for IBP that supports this transformational way of working - up to 50% inventory reduction, requiring less capacity and shorter lead-times all while achieving planned service levels. See https://www.camelot-itlab.com/en/camelot-demand-driven-lean-planning-suite-for-sap/ and https://www.linkedin.com/pulse/supply-chain-flow-what-why-how-simon-eagle/


John Smith

Research & Development, Octopus Tech Solutions
Posted on: Sep, 18 2017
IoT is without a doubt starting to become a major factor in the profitability of various companies. In the manufacturing sector, we will see it come into the front by the end of 2020 completely. Various sectors have already adapted IoT solutions like the security industry or companies offering BPO Services India. Contact centers not just in India and China but across the world have adapted technology following the principles of IoT. The manufacturing sector is soon going to follow.

Girish Maniyar

Chief Manager Development Initiatives, Asian Paints
Posted on: Sep, 28 2017
I  can speak with some context. While efficiency and tools can reduce inventory, we also see the number of SKUs and new products increasing, and also the number of sales/depot points. This means the inventory in such cases, can start with very high number and with more customization and choices available to the consumer, so there is no end to the long tail of products available within a category. It is unlikely that the slow/dead goods are written off so easily to be not included here.

A larger question, would it be purely an IO problem or also a Demand Planning (Forecast Error) problem? A higher cycle time of service but a better fill rate can improve inventory performance, by aggregation. But a bad forecast can do away all the good work you do in inventory planning.

Do you have numbers for decorative coatings in the list? I did not see something there only for decorative coatings.



Reo B Hatfield

Chief Operating Executive , BestTransport
Posted on: Oct, 20 2017
My opinion is that peaks and valley are just nice graphics to explain.  Smooth responses save the day.   3PLs  just adjust to the climate and the areas of movement of Logistics.    One purpose of the 3PL movement was to adjust to an always changing market.   They will never be fixed and will flex as the logistics changes.   3PL companies have vast knowledge of their business.  Their success is their ability to move up and down as the market flows.  They bring a level playing field to the transportation world that in the past was rigid but looked good on spreadsheets.  Industry graphic personnel like to be able to answer all the changes because they can only see documents.  3PLs see the needs, the issues, the positive changes and the knowledge to know why and when to adjust.   They (3PLs) have smoothed the waves of the past and everybody likes to see the spikes so they know something is there to clearly report on. Smooth sailing is boring but sure gets you where you want to go. 

Catherine Dennis

Supply Chain Manager, Indak Mfg Corp
Posted on: Oct, 26 2017
So the horrific and severe worldwide allocation of electronic components is not an issue?  Don't tell that to the automotive buyers.  It's HORRIBLE.  Lead times out to up to 76 weeks.  Why not write about that?  It's killing us, our customers and the big automakers.   

Huub

Logistics Manager, Shell
Posted on: Nov, 11 2017
I suggest McKinsey to do a bit more research in Prof Gattorna’s dynamic alignment. This article only scratches the surface a tiny bit. Much more to be found reading about the alignment concept.

Joseph George

Farmer, Field Vista
Posted on: Dec, 07 2017
Primarily Vision is required followed by Assigned Focus on objectives.  Or maybe just love for USA.  The market will not find its way unless it's for organic vegetables and RRR.  Two to three years later will take two to three years longer to the end of the decade, and this is viable today.  God bless america from its present distraction.

Gary Buchs

Owner Operator , Self, Landstar Business Capacity Owner
Posted on: Dec, 17 2017
In My Opinion, the fact that capacity will tighten should be obvious to everyone engaged in the transportation. 
Capacity to move freight isn’t how many trucks or trailers are in the system or what a computer 
program says, it still is truck driver based and poorly-managed companies won’t be able to imporove
this fact.  Investing in people is still most important!

Get ready to pay higher prices for goods and services. I think we could lose 10% of Capacity in many areas. 

Dan

Pres., Bioptechs
Posted on: Dec, 20 2017
After all the ground we have lost in the productive sector and the additional burden that loss of our productive momentum has placed on our society, somebody tell me why so many people are against the actions necessary to restore our vital productive infrastructure! It is like the left enjoys shooting itself in the foot!

Jayaram

Business Development, Raghava Logistics
Posted on: Mar, 04 2018
Great article and thank you for summerizing the predications. 

What does it mean to country like India where the labour is still cheap? Where the logistics cost is still on the higher side compared to some of the developed nations?

Herb Shields

President , HCS Consulting
Posted on: Mar, 06 2018

 I agree that robots can replace some amount of manual labor in logistics centers.  However as you mention, the labor pool is shrinking.  We need more training programs such as the one provided by the Greater West Town organization in Chicago.   Www.gwtp.org.  (It is a program that your readers should find interesting.)

Billy

Associate, BJO
Posted on: Mar, 13 2018
Thanks for this very informative article.

Doug Murless

Country Manager, krunchbox (www.krunchbox.com)
Posted on: Mar, 18 2018

Gone are the days when consumers will wait for a retailer to have the product back in stock, those days are done. We live in the "I want it now" society and with Amazon in their pocket consumers can easily "now" it to themself the next day right from their phone.

The importance of product availability is under the microscope at all retailers as an empty shelf equals lost customers, a poor customer experience and entirely abandoned purchases.

We are on a mission at krunchbox to help suppliers fix their product availability and sell thru and improve their buyer relationships, hopefully before their retail partner fines start rolling in and or we see more retailers close.

NikhilSingh

Executive, Carmatec INC
Posted on: Mar, 21 2018
You are correct There are government programs to encourage investment at small and mid-size manufacturers, but McKinsey says these programs generally have smaller budgets, less certainty of ongoing funding, and more constraints on their mandates than comparable programs in other countries. Policy makers should examine which existing initiatives are producing the most promising results, then scale up those efforts and commit to them for the long term.

Mike Mortson

CEO, Supply Chain Game Changer
Posted on: Jun, 15 2018
I wrote a similar article on supplychaingamechanger.com about the same topic:  Gartner's 2018 Top 25 Supply Chain List!  Is it Still Relevant?  at https://supplychaingamechanger.com/gartners-2018-to…t-still-relevant/

Chuck Nemer

Trainer, The Guru of Biz
Posted on: Aug, 16 2019
Nice metaphor and nice picture.  I'd like to see a bit more meat on the bones if you're going to completely sell me on the concept.

Charles Quail

CLO, Belair
Posted on: Jan, 20 2020
The truth from the road is that rates were so good, that 2018 was the best year we had since 1997.  So as we saw this happening, we saw carriers increased their fleets to capitalize on this gravy train, thus depressing the rates for 2019 from overcapacity.  They also flooded the used truck market, and sales dropped 70%.
We know because we also were thinking of retiring, but cannot sell our lightly used 2019 Mack Anthem because of this.  So we claim it was not the high cost structure, it was the greed.

Tom Miralia

CEO, Distribution Technology
Posted on: Feb, 26 2020
Multistory Bronx DC  $700 million and 1.2 million sqft- what's the rent going to be- $3.50 per sqft per month?  $40+ per sqft annually.  In many metros, thats higher than the best Class A office rent and about 9-10 times a going rate in the suburbs?  Well, space cost is the least cost in supply chain typically- still, must be a compelling business model to drive this?

Let's pretend that a product is valued at $50 a case, 60 cases per pallet, maybe stored in rack at 8 sqft per pallet in a narrow aisle single-select layout of some form- if total logistics expense ranges 8% maybe, then there's $240 in budget to flow goods from sourcing to customer.  Now the retail customer may spend more to get it to the end purchaser which is beyond my scope (and may folks ability to truly model I suspect).  if that pallet occupies that rack spot for 2 months that rent expense might range about $56?  That takes almost the whole budget for warehousing portion of logistics costs before labor, equipment, admin, materials and so on?

I dunno if I'm seeing this right?  Likely I'm off base?


Peter

Sales, Freight sales
Posted on: May, 08 2020

From a sales prospective:  Our company only uses small trucking companies and gives them the business directly. We sell right to the manufacturer.   The companies we sell for have no sales force and are good hardworking companies who would usually have to rely on only brokers. We help them with appointments billing bids when needed. This year despite our companies doing an excellent job and not raising there rates we lost many accounts or were reduced significantly to brokers.

Harry Moser

President, Reshoring Initiative
Posted on: Sep, 24 2020
Mr. Meidinger is correct that high healthcare costs have hurt U.S. mfg. He overstates his case by describing healthcare as the primary cause:
  1. U.S. healthcare costs % of GDP are about 7 points higher. Our mfg. costs are 20 to 40% higher.
  2. The costs paid by taxes in the other countries require highrer salaries and selling prices to obtain the same after tax benefit.
  3. His graph shows correlation, not causation.
  4. For a clear comparison of the impact of various factors, see the Competitiveness Toolkit https://reshorenow.org/search/. We include lower healthcare costs as one of several important factors in driving further increases in reshoring.

Chris Imamura

Executive in Residence, University of Colordao
Posted on: Oct, 10 2020
You note that 28% of Amazon's operating income came from its AWS web services unit.  However, from their 2019 Annual Report, Amazon reported $9.2B of the total $14.5B operating income came from AWS = 63%.  What am I missing?


  

 

Robert Simoneau

Consultant, PolyEd
Posted on: Oct, 13 2020
This is an excellent article but a few more details would help. As a lecturer for the Society of Manufacturing Engineers spent a lot of time working with and teaching Tier suppliers. The stories they told were grim from two perspectives. First US automaker are slow to pay their bills, net whenever. The second is the timeline to pay for tooling, some claimed it took one year to get paid. As one group said we spend most of our time hiding money. I consulted for one of the big three and when I asked a group of managers and engineers, when do you pay your bills, they all laughed in unison ... big joke. I was furious and tried to explain to them how this affected their supply chain. It took a lot of effort for GM to go from 50% market share in the 50s, to less  than 20%. When doing thier financial analysis they forgot about quality related issues and the eventual loss of market share. Interesting Boeing is doing the same thing with pretty much the same result ... sad. 

Jerry Saltzman

Professor, Zicklin Business School, Baruch College
Posted on: Jan, 24 2021
After all the rhetoric and  bluster, it's great to see a data driven the year in review analysis.   it was certainly a wild year but the data shows the resilience of the global and domestic supply chain despite political interference and Policy by tweet.

Dave

Individual, NA
Posted on: Mar, 15 2021
How come SPSC, SPS Commerce isn't included in supply chain software?

Steve Murray

Senior Analyst, Warehousing Education and Research Council
Posted on: Apr, 07 2021
From 1967 to 1972 I worked as a business systems analyst and developer for Safeway Stores, Inc.  At that time Safeway was the largest grocery retailer in the U.S. based on revenue.  It was also highly unionized.  While Safeway supported the efforts to develop a machine readable code for retail checkout, it's relationship with the union kept it from doing so openly as it might reduce the need for price ticketers, and checkers.  Quite frustrating for those of us who were developing solutions.  But back then we had plenty to do working on accounting systems, procurement, warehouse inventory control, retail store replenishment and labor planning - after all this was the dawn of the retail supply chain.  Eventually Safeway signed on to the UPC movement and the rest is, as you say, history. 

AL WEISS

CHAIRMAN, WEISS SUPPLY CHAIN CONSULTANTS
Posted on: Apr, 09 2021
 GREAT ARTICLE!

Rick

supply chain manager, Fresh Mark
Posted on: May, 28 2021
Do you have any information about Hormel's supply chain?

Daniel Druwe Araujo

CPIM, CSCP, T2People
Posted on: Jun, 04 2021

Very appropriate article, explaining the non-qualitative ranking, at least from a Supply Chain Management perspective. 

Once understood what it is not, the ranking is very interesting in terms of identifying the most successful companies in absolute terms.

The question that remains for the professionals interested in learning from the best supply chain designers and managers is exactly which are the most useful ideas and practices that can be learned from the best companies.

Terry Haider

Owner, TC Haider Group
Posted on: Aug, 18 2022
We were one of those contractors who failed in year 1 due to inflation in costs & FedEx not being willing to renegotiate our contract.  There was absolutely nothing we could do to be cash flow positive with paying acquisition debt so we ceased operations on June 30.  I know of another contractor in our smaller terminal who also has been in business several years who doubted he'd make it to peak.  This is a serious problem & if FedEx doesn't get a handle on it soon, their Ground network is very vulnerable & the reputation damage to the business model will stop anyone with a brain from buying in (I obviously didn't and I have an MBA in finance but could not cover the impact from fuel cost & labor cost escalation from my original forecast - mostly fuel cost).  Sorry I ever got involved.  I won't recover financially from this loss over what is left of a potential finance career from my experience.  I counsel colleagues to stay the hell away.  FEdEx is not a real partner in this with their contractors. 

Asher Rapp

None, None
Posted on: Aug, 24 2022
I find it interesting that the company making all these assumptions and graphs is one of the leading underwriters in alternative investments Carbon related funds.   

Rosemary Coates

Host, The Frictionless Supply Chain Podcast
Posted on: Sep, 28 2022
 I would love to interview someone from Schneider about this initiative. My podcast highlights women in supply chain management and is hosted by Supply Chain Management Review.  Please contact me at rcoates@ReshoringInstitiute.org  

Mike Loughrin

CEO, Transformance Advisors
Posted on: Oct, 13 2022
The dramatic fall in ocean container shipping rates is just another sign we are seeing a massive bullwhip effect coming. Other indications are early sales for Christmas items as retailers have too much inventory. Sales on new cars because the dealer lots are full. Sales on bicycles after a period of severe shortages.

We are going to see how many supply chian people over-reacted to the constraints during Covid and now need to deal with excess inventory and capacity.
 
 
 
 
 

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