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Catagory: Supply Chain Trends and Issues

Top Supply Chain Stories 2022 by Month - Full List


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F
rom shortages of everything to a ship stuck in the Suex Canal

 
Jan. 10, 2022
SCDigest Editorial Staff
     

In his First Thoughts column last week, SCDigest Editor Dan Gilmore identified the top one or two top supply chain stories by month in 2021 (see Top Supply Chain Stories 2021 by Month).

 

We had assembled a larger list, but due to the space constraints of the newsletter format, we had to cut some of the entries.

 

Supply Chain Digest Says...

 

There were many other important stories so far this year - what did we leave out?

What do you say?

Click here to send us your comments

 

Click here to see reader feedback
 

So below, we provide the full list of the top stores of the year that was. It was an eventful 12 months, to say the least.

January

In surprising news, Rick Blasgen, CEO of the Council of Supply Chain Management Professionals (CSCM), announces his plan to retire in March. Blasgen, a former supply chain executive at Conagra and others, had run CSCMP since 2005. The CSCMP board of directors names Mark Baxa, a previous chairman of the CSCMP board and current CEO of FerniaCreek Global Supply Chain Consulting Group, as interim CEO. There is surely some back story here, but we never pursued it.

UPS announces its plan to exit its LTL business with sale of its UPS Freight unit to Canadian logistics firm TFI International for about $800 million, a seemingly low number that was just one fourth of UPS Freight's estimated 2020 revenue of about $3.15 billion. The move allows UPS to shed itself of a low growth business and concentrate its investments in the parcel market while giving TFI an immediate strong presence in the US.

February

Sports gear maker Under Armour says it will stop selling through as many as 3000 current retail customers by the end of 2021, as the company puts more focus on its direct to consumer business. As such, Under Armour is mirroring rival Nike's strategy, as Nike a couple of years ago announced plans to cut it retail channels globally from some 36,000 to a few dozen. Last June, Nike also announced a Consumer Direct Acceleration program - the term says it all. Under Armour said the retail channel reductions would still leave it with 10,000 retailers by the end of 2022, but the direction is clear.

JB Hunt announce it will jump into digital freight brokerage in deal with Google, leveraging its artificial intelligence technology. Under the deal, Google and JB Hunt say they have agreed to form a "strategic alliance" to improve existing US supply chains and transport networks. JB Hunt will work with Google to develop machine-learning tools to improve matches between shippers and carriers on JB Hunt's existing 360 platform, hoping to enable shippers get an accurate view of freight market supply and demand days in advance.

March

Canadian Pacific Railway and Kansas City Southern Railway announce they will merge as part of a $25 billion deal that will create a rail freight network that spans Canada to Mexico. Or so it seems. Not long after, Canadian National announces a larger $33 billion offer. There is some drama, but Canadian National ultimately prevails, but it is still a question if US regulators will let the deal go through.

News that Amazon is using video cameras to monitor its own delivery driver at all times, even drivers actually employed by independent Amazon Delivery Service Partners. In fact, Amazon delivery drivers in the US now have to sign "biometric consent" forms to continue working for the retailing giant. The data that drivers must consent to have collected includes photographs used to verify their identity; vehicle location and movements (including "miles driven, speed, acceleration, braking, turns, following distance"); "potential traffic violations" (like speeding, failure to stop at stop signs, and undone seatbelts); and "potentially risky driver behavior, such as distracted driving or drowsy driving."

In a crazy mishap, a large container ship from Japan's Evergreen line gets turned almost sideways entering the Suez Canal from the Red Sea and becomes stuck. About a quarter mile long (400 meters) and weighing in at 200,000 tons, the ship's sheer size overwhelms efforts to dig it out. The ship remains stuck for six days, with 400 cargo vessels waiting at sea for the blockage to end. Canal owner Egypt holds the Even Given and its 25 crew members until just last week, due to wrangling over compensation for the accident. It took a $550 million payment in the end from Evergreen and its insurers to free the ship.

April

In an intensely watched action, workers at an Amazon fulfillment center in Bessemer, AL overwhelmingly vote not to join the Retail, Wholesale and Department Store Union. By a margin of 71% to 29%, workers said no to unionization after a mail in voting period of more than a month instead of the usual in-person vote, necessitated by COVID-19 concerns - and keeps Amazon's US facilities free of unions. Many pro-labor forces expected a vote to organize that could serve as a catalyst for union votes at Amazon FCs across the country.

In its Q1 2021 shareholder deck, the Tesla says that the much anticipated all-electric Tesla Semi is now set to finally be on the road later this year. In January, CEO Elon Musk had said that the Tesla Semi was ready for production, but that the company was having difficulties manufacturing enough 4680 battery cells to power the rigs. However, Tesla's shareholder report says that concerns surrounding the battery for the Model Y car have been resolved, and that Tesla Semi trucks will see deliveries in 2021 to some companies that have pre-ordered them.

UPS announces its plan to acquire delivery drones from a company called BETA Technologies. But these are not small parcel carrying aircraft. Instead, they are capable of carrying as much as 1400 pounds. UPS says the new drones will quickly transport deliveries that would otherwise fly on small fixed wing airplanes. The drones will come with a 250-mile range and cruising speed of up to 170 miles per hour. The UPS significant range of the aircraft will be capable of conducting series of short routes or one long route on a single charge.

May

Gartner releases its top 25 supply chains list for 2021. This year Cisco Systems comes out on top for the second year in a row - sort of. I 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 (2) Colgate-Palmolive; (3) Johnson & Johnson; (4) Schneider Electric; and (5) Nestle.

Researchers at North Carolina State claim an RFID chip breakthrough, with a design that will cost under one cent to produce at scale. The key is the small size of each chip. The smaller the chip, the more chips you can get from a single silicon wafer. Realizing more chips from the silicon wafer, the less expensive they are to produce each one. We'll see if it turns into reality, but it could really change the RFID ROI if it does.

The Colonial Pipeline Company reports that it was the victim of a cybersecurity attack that involves ransomware, forcing the company to take some systems offline and disabling its pipeline. The Georgia-based company operates the largest petroleum pipeline in the United States, carrying 2.5 million barrels a day of gasoline, diesel, heating oil, and jet fuel on its 5,500-mile route from Texas to New Jersey. The pipeline closure shuts down many East coast gas stations for days - and leads to questions on the cyber security of US infrastructure systems.

June

Kroger launches its first drone delivery test from a store in Centerville, OH, south of Dayton. Per FAA regulations, the deliveries will be limited to areas within one mile of the store. For the first pilot program, no charge will be levied for these flights, Kroger said. But that's temporary. At some point, there will be delivery charges for the service.

CSCMP and Kearney release the 2021 State of Logistics report. The headline news: what the report several years back started calling US Business Logistics Costs (USBLC) fell sharply on an absolute basis in 2020, down 4.0% to $1.55 trillion. With a smaller decrease in US GDP (-3.5%) than logistics cost fell last year, that took the relative cost of logistics as a share of GDP to 7.44%, down bit from 7.57% in 2019 - versus 8.59% in 2007,

News that FedEx Freight, the company's less-than-truckload segment, had suspended service to approximately 1400 customers due to strains in its network from rising shipment volumes. The move left many shippers in a lurch, with some complaining of little notice of the service suspension. Within a few weeks, FedEx says it had restored service to some of those dropped shippers, but not all.

(See More Below)

CATEGORY SPONSOR: SOFTEON

 

 

July

German ocean container line Hapag-Lloyd says it is adding a new $5000 surcharge per 40-foot container for moves from China to the US and Canada, according to a letter it sent to customers. The letter said the new fee is a result of “extraordinary demand from China and the resulting operational challenges along the transport chain.” Hapag-Lloyd said the surcharge would be implemented beginning August 15 and would “replace other ad-hoc surcharges like the SGF” (shipment guarantee fee). Hapag-Lloyd is just one of nearly all carriers implementing such fees. In fact, it appears a growing number of carriers, depending on the lane, are now ignoring contracts and forcing shippers to accept sky-high spot market prices and the significant surcharges.

Walmart says it will install robots from a company called Symbotic in 25 of its 42 US regional distribution centers. Wilmington, Massachusetts-based Symbotic first implemented its system in a Walmart DC in Florida in 2017 and the companies have been working to optimize the system ever since. The Symbotic system sorts, stores, retrieves, and packs freight onto pallets, Joe Metzger, executive VP of supply chain operations, Walmart US, said in a blog post. It uses advanced algorithms to store cases with a precision that speeds the intake process and increases the accuracy of freight being stored for future orders. Walmart says the rollout will take “several years” to complete.

Zebra Technologies say it will pay $240 million to acquire the 95% of mobile robot maker Fetch Robotics it doesn’t already own. For Zebra, the move is another step to expand from its long time roots in data collection, focused on bar code scanners, RFID readers and mobile wireless terminals, to more of a true solutions provider. Zebra says part of the appeal of Fetch is the company’s broad product line, with different robots for different types of warehouse applications.

Uber Freight, the rideshare company’s former freight unit before being spun out, announces it is acquiring Transplace, a leading transportation 3PL, in a deal that values Transplace at $2.25 billion. Uber maintains a majority ownership of the new Uber Freight.

August

Amazon officially opens its massive new Prime Air hub at the Cincinnati airport. The facility will have 3 million square feet of logistics space across seven planned buildings. Notable among all that space is an 800,000-square-foot sortation building equipped with robots and many miles of interlinked conveyors. The facility will serve as Amazon’s largest air hub, and is expected to handle as many as 200 cargo flights per day. It will operate across an amazing 600 acres, and soon employ 2000 people. It will include an expansive new tarmac with parking for about 100 planes. When the hub was announced a few years back, Amazon said it would take $1.5 million to develop.

Walmart announced it is going to leverage its home delivery platform, Spark Driver, to make last mile deliveries for other merchants in a program named Walmart GoLocal. Walmart says other retailers can choose to use the service for a variety of delivery types, including scheduled and unscheduled deliveries, and same-day delivery. GoLocal’s last-mile capabilities will be handled by gig workers from the Spark program – the same drivers that support Walmart’s same-day grocery delivery. Also, retailers using GoLocal don’t have to sell on Walmart.com’s marketplace, as this isn’t a fulfillment service where Walmart both stores and delivers third-party inventory - it’s just the last-mile delivery portion.

The California Trucking Association appeals to Supreme Court as it promised when it lost a full Appeals Court decision in June on the legality of California’s so-called AB-5 legislation. That law would in practice eliminate contract truck drivers in the state by defining an onerous to see if a worker qualifies as an independent. If the Court takes the case, the CTA would seem to have a strong argument, given a 1994 US law creating federal pre-emption of transportation law, passed to avoid the impossibility of truckers needing to comply with individual rules state by state. The court has not decided if it will take the case.


Presenting during Tesla’s “AI” day, founder Elon Musk surprised the audience by announcing plans for a humanoid style robot. Details were sparse, but in a short slide presentation, Musk said the robot would stand about 5-foot 8-inches tall, weigh about 125 pounds, and be built from lightweight materials. One interesting note is that Musk said the robot will borrow technology developed for Tesla vehicles, including its artificial intelligence, autopilot cameras, and computer developed for autonomous driving. The robot will have a name, Optimus.

September


FedEx says in recently ended fiscal quarter it incurred $450 million extra costs due to the on-going labor shortage. The company said the lack of labor led to increased overtime, higher wages to attract workers and extra spending on expedited transportation. The company cited the specific example of a sorting hub in Portland, OR, that had 65% of the workers needed to handle the normal number of packages that go through that facility. FedEx also said it is raising pay levels and paying premiums for weekend shifts to try to attract more workers.

FedEx then announces rates for US domestic, export and import services will rise an average of 5.9% starting January 3 - a least a percentage point above usual new year general rate increases. The rate hike applies to shipments using FedEx Express, FedEx Ground and FedEx Freight. Numerous surcharges are also hiked. For example, if shipments are not ready for pick-up when a FedEx driver arrives, it will trigger a “no shipment tendered” surcharge, commencing January 17. Home delivery residential surcharges will rise by 9.2%, while ground delivery surcharges on rural area deliveries will rise by a whopping 61%, according to one estimate.


October


The twin ports of Los Angeles and Long Beach announce plan to charge for shipping containers not picked up in a timely fashion. For example, In the case of containers scheduled to move by truck, ocean carriers will be charged $100 for every container “dwelling” nine days or more, while for containers moving by rail, carriers will be charged if the container has dwelled for three days or more. Additional $100 per container per day will be charged if the boxes remain at the port. The charges were to begin November 1, but mostly have postponed, as the threat of the fees is having an impact.

The Labor Department reports that the US consumer price index (CPI) rose 5.4% in September versus the same month a year ago. The year-over-year gain in prices was the highest for any month since 1991, as supply chain driven-inflation threatens the overall economy, and continues in the remaining months of the year.

A significant test of commercial drone deliveries commences in Israel, another step towards its goal of creating a national drone network. Five companies are participating in the test, each focusing on different applications. In total, there will be about 300 deliveries per days, with the drones from all participating companies managed by a single centralized control system. What’s more, some of the drones will make their deliveries by flying over heavily populated urban areas, so far a no go in the US. Could the drone era perhaps not be that far away at last?

The two largest so-called regional parcel carriers announced they are combining in deal that will give the merged company a network that can deliver to most of the US. Virginia-based LaserShip agreed to buy OnTrac Logistics, out of Arizona, for some $1.3 billion. LaserShip a short time later announces Mark Holifield, chief supply chain officer at Home Depot, will become its CEO.

November


President Biden the long awaited “Infrastructure Bill” into law with generally bi-partisan support. The bill will provide $1.2 trillion in spending across many areas, but really a smaller $550 million over 5 years in funds above what has already been committed. Roads, bridges, and other “major projects” get $110 billion, while port infrastructure receives $17 billion. Will it really have an impact, and is it really “paid for?” Who knows.

American Trucking Associations CEO Chris Spear says in interview that that the new ATA estimate of the US truck driver shortage is 80,000, a 30% increase from its last estimate before the pandemic, when the industry was said to have a driver shortage of 61,500 drivers. The driver shortage is one of the key factors in the on-going back-up at US ports, as there are not enough trucks to move containers from terminals to warehouses or train hubs.

News that Amazon is adding a new layer of facilities that will feed its fulfillment centers that in turn increasingly support delivery stations for its own parcel delivery network. Amazon has started tests of the concepts with users of its Fulfilment by Amazon (FBA) service, which acts as a third party for fulfillment and shipping services for its Marketplace platform. The planned facilities will be positioned as staging locations for its fulfillment centers, adding an extra touch versus vendor shipments to FCs – but will crucially take out time for that replenishment.

A National Labor Relations Board (NLRB) regional office orders Amazon to hold another union election at one of its fulfillment centers in Bessemer, Ala., following Amazon's resounding victory against unionization in the first election there in March. The Retail, Wholesale and Department Store Union had appealed the results of the vote, alleging a series a labor law violation by Amazon during the process.

December


Reports that Amazon is taking direct control of a number of global logistics service in the face of soaring costs and delays in the commercial markets. Those services include chartering its own container ships, using small US ports, and contracting with Chinese manufacturers to make its own shipping containers. While Target, Walmart, Costco, Home Depot and others have also chartered container ships, Amazon is taking it to a whole new level, moving some 10,000 containers per month, filled with goods from small- and medium-sized Chinese exporters, and also working with the ship owners to modify bulk cargo ships built to move commodities to handle containers cargo instead. Internally, Amazon calls this project “Dragon Boat.”

The number of ships in the water awaiting a berth at the ports of Los Angeles and Long Beach reaches a record 111, as shipping delays continue to grow. Prior to the pandemic, the ports' highest record had been 17 ships waiting to anchor. Opening some terminals for 24 x 7 container moves, proves a false hope, as for a variety of reasons there are few takers. The ports also vastly spread out waiting ships in the water over fears of winter winds and tides causing collisions.

So there you go. There were many other important stories in the year - what did we leave out?

Any other top supply chain stories of 2021? Let us know your thoughts at the Feedback section below.


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.

 
 

 

 

 

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