SPECIAL REPORT: IMPROVING SUPPLY CHAIN VISIBILITY WITH MACHINE LEARNING Global Supply Chain Solutions Covering Procurement, Risk, the IoT and More
MARCH 2018
PROS TO KNOW in 2018
PROCUREMENT GETS SMART
How AI-enabled procurement can lead to better business decisions
RISK MITIGATION
The costs of playing it cool can be huge
Meet our Pro to Know Mark Burstein of NGC Software, along with the rest of the year’s most influential supply chain leaders
Blockchain by the BOATLOAD
Pilot tests demonstrate the technology’s value in the supply chain
Fresh new content daily at
SDCEXEC.COM
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PROS TO KNOW 2018
JAKE B
CEO BlueWo Consult
SETH
Director Developm B-Stock
SEAN
Director Business B-Stock
Here Are a Few of this Year’s
SUPPLY CHAIN LEADERS!
WILLI
President ChainSe
JERRY RAU
JON SLANGERUP
JONAT
COO 3Gtms
Chairman and CEO American Global Logistics
President Coyote
CHAD SYMENS President and CEO Accelerated Analytics, LLC
DAVID MARACHAND CEO ICIX
BILL H
President Demand
TOM BARNES
STEVE
President Agistix
CEO Integration Point
CEO Epicor S
LISA DOLAN
SHANKARA GURUMURTHY
TREVOR READ
Vice President of Supply Chain Strategy ALOM
Supply Chain Practice Director Arkieva
BRANDON MARUGG
JASON AVERILL
Chief Technology Officer ALOM
Executive Vice President Avercast LLC
HANNAH KAIN President and CEO ALOM
THIER
VP Opera Flucticie
SERGI
CEO Global4 Services
PETER ZALINSKI
SRINI
Product Manager, Identification Solutions Barcoding Inc.
Founder a Highway
BARR
orld Supply Chain ting
BLAUSTEIN
of Marketplace ment k Solutions
CLELAND
MATT SMITH
MIKKO KÄRKKÄINEN
Chief Strategy Officer and Founder ICIX
Group CEO RELEX Solutions
ANNE OMROD Founder and CEO John Galt Solutions, Inc.
KIRK STUDDIFORD Director of Client Services Synchrono, Inc.
JOCHEN SCHUEHLE
GORDON CONKLING
of Mobile and Development k Solutions
CEO USA and Canada Miebach Consulting Inc.
Lead Business Process Analyst Welch’s Food, Inc.
IAM MRZLAK
MARTIN VERWIJMEREM
t equence, Inc.
THAN SISLER
t Logistics
HARRISON
t d Management Inc.
Founder and CEO MP Objects America
KEN WACKER Executive Vice PresidentEnterprise Business Solutions Transportation Insight, LLC
DONALD HOEPPNER
BILL LOFTIS
Executive Partner Paladin Associates, Inc.
Senior Director-Integrated Solutions Transportation Insight, LLC
MATT YEARLING
SOPHIE DABBS
CEO Pinc Solutions
Vice President of Solutions Engineering Transportation Insight, LLC
E MURPHY
JOHN COSTANZO
GERRY ROMANELLI
Software Corp.
President Purolator International Inc.
Chief Commercial Officer TRIOSE
RRY JAFFRY
rations-North America el Inc.
PETER SHIN
STEVE BEDA
Director of Pre-Sales for North America Quintiq Inc.
Executive Vice President, Customer Solutions Veraction
IO RETAMAL
JEFF BUTLER
SHELLEY BELL
4PL Supply Chain s
Product Manager, Logistic Solutions Quintiq Inc.
Manager, Industry Marketing Yale Materials Handling Corp.
VAIDY
FRANK DREISCHARF
and President y 905
VP of Supply Chain Solutions R2 Logistics
For more Pros to Know, turn to Page 18.
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March 2018 | Volume 19 | Issue 1
CONTENTS FEATURE
12
EXECUTIVE FOCUS
06 The Risks of
Eluding Risk
The costs of playing it cool can be huge.
48 T RANSPORTATION
Small Businesses Find Advantage in Last-Mile Meal 12 The Innovation Economy Manufacturing has undergone Delivery a massive transformation, and another shift is on the horizon.
18 Pros To Know in 2018 Meet Pro of the Year Mark Burstein of NGC Software, along with the year’s brightest supply chain leaders.
SPECIAL REPORTS
32 THE INTERNET OF
THINGS Improving Supply Chain Visibility
Machine learning can uncover layers of fuzzy IoT data to maximize efficient supply chain operations.
06 18
34 PROCUREMENT
Procurement Gets Smart How AI-enabled procurement can lead to better business decisions.
38 BLOCKCHAIN
38
Blockchain by the Boatload
A growing number of pilot tests are demonstrating the value of blockchain technology in the supply chain.
40 RISK MANAGEMENT
54
SDCEXEC.COM
EventWatch and Resilinc’s annual supply chain report holds clues for 2018.
50 WAREHOUSING Operating the Sustainable Warehouse
With 24-hour operations, implementing sustainability initiatives is now a must.
54 SOFTWARE & TECH Big Data Empowers Telematics
How leveraging big data to optimize your fleet can increase ROI.
56 PROFESSIONAL
DEVELOPMENT Supply Chain Talent Shortage: Gap or Crisis?
While talent is still scarce, opportunity abounds.
COLUMNS
04 EXECUTIVE MEMO 16 MADE IN AMERICA 60 WORK HARD, PLAY HARD
Exclusive online features and solutions for successful supply chain operations
The Pain Points of a Procurement Manager
AI and the Evolution of Demand Forecasting
www.sdcexec.com/20991421
www.sdcexec.com/20994620
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Where Does the Risk Lie?
The foodservice industry should carefully consider operational costs and customer satisfaction before partnering with high-profile couriers.
Overcoming the Talent Gap in Transportation www.sdcexec.com/20994526
SDCExec.com | March 2018 | SUPPLY & DEMAND CHAIN EXECUTIVE
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EXECUTIVE MEMO By John R. Yuva, Editor jyuva@ACBusinessMedia.com
Published by AC Business Media Inc. 201 N. Main Street, Fort Atkinson, WI 53538 (800) 538-5544 • www.ACBusinessMedia.com
www.SDCExec.com
FORGE YOUR PATH
H
ere’s my advice: use each and every issue of Supply & Demand Chain Executive to expand your knowledge, build your supply management skills and learn from others to pave your own path of success. It’s March and readers of SDCE are accustomed to seeing and anticipating our annual Pros to Know. This year doesn’t disappoint. Our Pros to Know list (page 18) is one of the most valuable for supply management practitioners and executives because it provides a benchmark for what your colleagues and peers are accomplishing. Regardless of whether you’re new to the profession or a seasoned veteran, there are many takeaways from the Pros to Know profiles. In the case of our Pro to Know of the Year Mark Burstein, president of NGC Software, taking risks (even if it means leaving behind everything you’ve worked for) can lead to your greatest success. As a result, the fashion industry is much better (and more efficient) for it. There are opportunities to learn from every profile in our Pros to Know listing. These people are passionate about what they do and what their accomplishments mean for the profession. While many have several years of experience to draw upon, others are finding success early in their careers. Look to our pros as a source of inspiration and motivation as you embark on new endeavors. Most of all, don’t hesitate to reach out to 4
any of our pros to seek insights and forge relationships. Giving back to the profession is first and foremost for many. While the focal point of our March issue is the Pros to Know listing, it is only a small sampling of what lies in this month’s pages. New to our Special Reports section in 2018 is a focus on blockchain. For many (including myself ), blockchain represents an exciting new path for supply chain security and risk management, but can be difficult to define as a concept. Our job is to demystify this evolving technology and translate its potential. Read “Blockchain by the Boatload” on page 38 to learn about the companies investing in blockchain pilot programs. Who are the early adopters and what does this mean for their supply chains? Other articles in this issue detail why eluding risk can be a risky proposition and how the innovation economy is transforming manufacturing. We look forward to your feedback. On a different note, Supply & Demand Chain Executive’s December issue featured the 2017 Green Supply Chain Awards list. Regrettably, there were two mistakes that required corrections. First, DHL was omitted from the listing. Second, an expanded listing for Transportation Insight was omitted from the profiles. We look forward to your feedback on the issue. Happy reading!
SUPPLY & DEMAND CHAIN EXECUTIVE | March 2018 | SDCExec.com
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EDITORIAL TIM FEEMSTER, President, ADVISORY Foremost BOARDQuality Logistics JOHN CECERE, LORA M. HILL, Founder Director, and St. Onge CEO, Company, Supply Chain andInsights Board of TIMGovernors, FEEMSTER, President, Material Handling ForemostIndustry Quality of Logistics America RORY M. JOHN KING, HILL, Analytic Director, andSt.Big Onge DataCompany, Advisor, SAS andInstitute Board of KAREN Governors, MASTER, Vice Material President Handling of Communications, Industry of America SAP RORYAriba KING, Analytic and Big Data Advisor, SAS Institute WILLIAM KAREN MASTER, L. MICHELS, Vice CEO, President Aripart of Consulting Communications, SAP JULIEAriba MURPHREE, Founding Editor, Supply WILLIAM&L.Demand MICHELS, Chain CEO, Aripart Executive Consulting ANDREW JULIE MURPHREE, K. REESE,Founding Senior Portfolio Editor,Marketing Manager, IHS, and&Former Supply Demand Editor, Chain Supply Executive & Demand Chain Executive BOB RUDZKI, ANDREW K. REESE, President, SeniorGreybeard Portfolio Marketing Advisors Manager, IHS, CHRISand SAWCHUK, FormerGlobal Editor, Managing Supply & Demand Director Chain and Executive Procurement BOB RUDZKI, Advisory President, PracticeGreybeard Leader, TheAdvisors Hackett Group RAJ SHARMA, CHRIS SAWCHUK, CEO, Global Censeo Managing Consulting Director Group and Procurement KATE VITASEK, Advisory Founder, PracticeSupply Leader,Chain The Hackett VisionsGroup RAJ SHARMA, CEO, Censeo Consulting Group KATE VITASEK, Founder, Supply Chain Visions CIRCULATION & SUBSCRIPTIONS P.O. Box 3605, Northbrook, IL 60065-3605 CIRCULATION & SUBSCRIPTIONS (877)Box 201-3915, Fax: (847) 291-4816 P.O. 3605, Northbrook, IL 60065-3605 Email: circ.sdcexec@omeda.com (877) 201-3915, Fax: (847) 291-4816 Email: circ.sdcexec@omeda.com LIST RENTAL Jeff LISTMoriarty, RENTALInfogroup (518)Moriarty, 339-4511 Jeff Infogroup Email: jeff.moriarty@infogroup.com (518) 339-4511
Email: jeff.moriarty@infogroup.com REPRINT SERVICES JOLENE GULLEY, jgulley@ACBusinessMedia.com REPRINT SERVICES JOLENE GULLEY, jgulley@ACBusinessMedia.com AC BUSINESS MEDIA INC. CHAIRMAN Anil Narang PRESIDENT AND CEO Carl Wistreich CFO JoAnn Breuchel DIGITAL OPERATIONS MANAGER Nick Raether DIGITAL SALES MANAGER Monique Terrazas Published and copyrighted 2018 by AC Business Media Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher. Supply & Demand Chain Executive [USPS #024-012 and ISSN 1548-3142 (print) and ISSN 1948-5654 (online)] is published five times a year: March, May, June, September and December by AC Business Media Inc., 201 N. Main Street, Fort Atkinson, WI 53538. 53538. POSTMASTER: Periodicals postage Please paid send atallFort changes Atkinson, of address Wisconsin to Supply and &additional Demand Chain entry Executive, offices. POSTMASTER: P.O. Box 3605,Please Northbrook, send allIL 60065-3605. changes of address Printed to in Supply the USA.& SUBSCRIPTION Demand Chain POLICY: Executive,Individual P.O. Box subscriptions 3605, Northbrook, are available IL 60065-3605. without Printedininthe charge theUnited USA. SUBSCRIPTION States, CanadaPOLICY: and Mexico Individual to qualified subscriptions individuals. are Publisher available without charge reserves right in to the reject United nonqualified States, Canada subscribers. and Mexico One-year to qualified subscription individuals. to Publisher reserves nonqualified individuals: right toU.S., reject $30; nonqualified Canada andsubscribers. Mexico, $50;One-year and $75subscription for all other to nonqualified countries (payable individuals: in U.S. funds, U.S., drawn $30; Canada from U.S. andbank). Mexico, Single $50;copies and $75 available for all other countries (prepaid only) for(payable $10 each.in Return U.S. funds, undeliverable drawn from Canadian U.S. bank). addresses Single to: Supply copies &available Demand(prepaid Chain Executive, only) forP.O. $10Box each. 25542, Return London, undeliverable ON N6C 6B2. Canadian addresses to: Supply & Demand Chain Executive, P.O. Box 25542, London, ON N6C 6B2. The information presented in this edition of Supply & Demand Chain Executive isThebelieved information to bepresented accurate.inThe this pedition ublisherof cannot Supply & Demand assume responsibility Chain Executive for is believed the validity toof beclaims accurate. or performances The publisherof cannot assumeappearing items responsibility in editorial for presentations the validity ofor claims or performancesin of advertisements theitems publication. appearing in editorial presentations or advertisements in the publication. March 2018 / Volume 19 / Issue 1 March 2018 / Volume 19 / Issue 1
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FEATURE
By Barry Hochfelder
The Risks of
ELUDING RISK
Even if you think you’re doing all you can to mitigate risk, you’re probably not. Shockingly, some companies won’t go the extra mile—and it will cost big.
“T
he supply chain is more spread out than ever before, with more actors and less visibility into what they’re doing,” according to Tony Pelli, a supply chain risk consultant at BSI, a London-based supply chain standards and intelligence company. “It’s a constantly shifting supply chain,” he says. And yet, not everyone is onboard with being proactive. The Haslam College of Business at the University of Tennessee surveyed more than 150 supply chain executives and conducted six faceto-face interviews with senior executives from six prominent companies. The results range from surprising to disturbing. None of those surveyed use outside expertise in assessing risk for their supply chains. Ninety percent of firms do not quantify risk when outsourcing production, and while 66 percent
6
had risk managers in their firms—either in legal or compliance—virtually all of those internal functions ignored supply chain risk. Most surprising of all, 100 percent of the supply chain executives acknowledged insurance as a highly effective risk mitigation tool, but it was not on their radar screen, nor in their purview. Lead author of the survey, J. Paul Dittmann, executive director of The Global Supply Chain Institute at Haslam, wrote that the lack of appreciation for proper insurance was “perplexing, particularly since insurance providers offer solutions to circumvent, protect against, or ultimately help companies financially recover from many of these risks.” One interviewee even said that, although he knows risk management is necessary, it’s not encouraged or rewarded. “Maybe that’s at the heart of the problem,” Dittmann wrote. “Few executives are compensated or incentivized in their day-today job to rigorously manage risks.”
HUMAN NATURE Like the guy in the insurance commercial, Greg Schlegel has seen it all in his 30-plus years of supply chain experience. He teaches graduate-level supply chain risk management classes at Lehigh and Villanova Universities. Schlegel also founded the 20-company Supply Chain Risk Consortium that provides education, assessment tools and consulting services in support of supply chain risk management projects and enterprise-wide risk management. So, why don’t companies take the proper risk mitigation steps? “Why? It’s a puzzlement,” Schlegel says. “My first thought, and I’m not trying to be glib, is that it’s in the human DNA to procrastinate. We will wait until the very, very, very last moment in this arena. That’s the rationale.” The No. 1 reason is human nature, he adds. And No. 2 is the extra cost. “Where’s my ROI (return on investment)? That’s the rough part. A Stanford professor once said, ‘Listen, no one ever gets promoted for good cost avoidance.’ “As a faculty member, we train our MBA (students) to understand 15-20 KPIs (key performance indicators), then we send them out
SUPPLY & DEMAND CHAIN EXECUTIVE | March 2018 | SDCExec.com
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[and they ask] where’s the money? They want a hard ROI. How do you measure the risk mitigation techniques when it doesn’t hit the fan?” That goes all the way up to the C-suite. Even if operational supply chain people see risk, they’re often handicapped by their own skills, Schlegel notes. “Your own executives assume that you and your team are so good at supply chain operations that you’ll know what to do if any event ever happens.” It all comes down to change management, he adds. “People hire us to do a four-week project. We map the supply chain and find the risk. We assess it as to small, medium and large. Then, we provide them mitigation to eliminate the risks [80 percent are tactical], and they do nothing. They say, ‘Thank you, you’ve done a great job.’ It’s an academic exercise. Nine out of 10 won’t do any of the mitigation. Why? Culture kicks in. It’s change management, and nobody likes change management. If they’re risk adverse, they won’t do anything; they’re just checking off boxes. It’s all about culture.” For example, Schlegel and his team told one large client that a couple of their factories needed changes. The cost of the fix, he says, would have been around $150,000, but the client chose not to act. About six months later, a weather event knocked them out. “Instead of the $150,000 it would have cost to do the mitigation, they lost $50 million while the factories were down,” he recalls. “Yes, heads rolled and executives were fired, but all that could have been avoided for $150,000.”
“LISTEN,
NO ONE EVER GETS PROMOTED FOR GOOD COST AVOIDANCE.”
CAN WE TALK? It probably sounds like a cliché: break down the silos. Talk to each other. But clichés are clichés because they’re true. “The biggest thing you can do,” BSI’s Pelli advises, “is bring together, as much as possible, teams on the supply chain. Just get a current list of suppliers and form a risk working group. Screen first and look for warning signs like child labor and forced labor.”
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OPERATING A SUPPLY CHAIN IS TOUGH enough without having to comprehend the mind-boggling number of risks it entails. Take a deep breath, then look at these examples and statistics from BSI that can ruin your reputation and business: Man-made disruptions: 615 strikes have occurred at manufacturing sites in China in 2015, a 30 percent increase over 2014. Natural disasters: Approximately 40 percent of all 2014 U.S. imports originated in countries with a high or severe risk of natural disaster exposure. Geopolitical risks: Countries that experience serious political instability exported $733 billion of goods in 2014. Environmental risks: Argentina, Uruguay, Paraguay and Ecuador rank highest among South American countries for levels of air pollution. Corruption: Approximately 83 percent of all imports of apparel, footwear and accessories into the United States originate in countries with high or severe threats of corruption. Government effectiveness: Countries with low labor and resource costs often have high issues with the government effectiveness. Cargo theft: Cargo theft has created a dangerous environment for drivers as criminals are employing increasingly violent means to seize expensive products. Organized crime is also becoming more involved in cargo theft and cargo tampering in several countries. Employee screening practices: Dockworkers, crane operators and cargo truck drivers frequently participate in the smuggling of cocaine out of the Port of Callao in Peru, with the workers receiving around $10 per kilogram of drugs loaded into sea containers. Anti-Western terrorism: Half of the 250-plus active terrorist organizations in the world are classified as having anti-Western terrorism ideology. Counterfeit products: China accounts for 73 percent of BSI’s recorded counterfeit incidents worldwide. Supply chain terrorism: Supply chains are targeted by terrorist organizations at least once every 7 days, on average. Unmanifested cargo: More companies have lost certifications with programs, such as C-TPAT, due to unmanifested cargo introduction than all other issues in global supply chain exposures. Child labor and human rights: About 63 percent of all 2014 U.S. imports of apparel and footwear originated in countries with a high or severe risk of child labor. Developing nations, particularly those in Africa and Southeast Asia, continue to trail the developed world in effectively implementing and enforcing human rights protections.
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FEATURE MITIGATING UNEXPECTED AND SYSTEMATIC RISK
By Gary Neights, senior product manager, Elemica
Supply chains are threatened every day from events related to natural disasters —fires, floods, power outages, contamination, road closures— and socio-economic issues, such as geopolitical upheavels, terrorism and labor unrest. These are examples of unexpected risk events, which tend to occur with little warning, but have a limited duration. Another type of risk is systematic risk. For any given product, factors such as sources of supply, routes, modes of transportation, carriers and contractors provide a unique risk profile. Risk events layer on top of systematic risk and may be more difficult to control or predict. Understanding and assessing systematic risk can be a challenge, especially when hundreds or thousands of products are in scope. But, unexpected risk management systems can associate events as they occur to specific plants, lanes, orders or shipments to help you understand the impact (or non-impact) on your operations. End-to-end visibility, reality checks and risk management let you monitor and adjust your supply chains in real-time. For global supply chains, these tools need to be built on a business network of data from all supply chain participants, including customers, distributors, logistics providers, manufacturers and raw material suppliers. This consolidated data can be reported upon and visualized to allow business leaders and executives to understand what is happening. In addition, Bayesian estimating techniques can be applied to this supply chain data in real-time to predict what will happen and alert the appropriate people to act. And, real-time monitoring can assess world events and apply them to supply chains to help you understand which orders or locations will be impacted and which will not. End-to-end supply chain visibility helps companies recognize what’s working, what’s not, what needs to be tweaked, and what needs to be changed completely. The larger the company, the more likely its business functions are to become isolated in silos. To improve processes and achieve desired outcomes, collaboration and data sharing are critical. Success requires more than analytics and optimization; business-savvy partners drive top performance. A business network helps supply chain leaders prepare for and avoid disruptions by providing visibility to all real-time events. The more tightly knit your community is on the network, the easier it is to avoid or recover from a disaster. Today’s businesses should be sharing risk mitigation strategies and back-up plans with their trading partners to build a true ecosystem that is poised for continuing business, no matter what. 8
Even technology won’t help without communication. “There’s a lot of talk about predictive analytics,” Pelli says. “But if teams aren’t linked up to respond, it doesn’t matter. There has to be a foundation, multiple groups working together, and risk should guide it. Link up efforts within the company—no gaps.” That means you can’t think of natural disasters, but forget about strikes, or child labor, cargo theft or any of the other risk categories out there. Coordination and collaboration, along with visibility, are a must, advises Gary Barraco, director, global product marketing at Amber Road. “Know the risk [that is] coming at you,” he says. “Where are we today? Are there new risks next week? Ask, ‘What are we doing to see risk?’ “From the global supply chain side, folks are realizing the highest risk is in variability,” he adds. “Consumer buying and behavior all feeds into vulnerability of risk. As manufacturing improves, exporters need to know so much. Who’s manufacturing it? Shipping it? Buying it? They have to know about trade sanctions and embargoes.”
COORDINATION & COLLABORATION, ALONG WITH VISIBILITY,
ARE A MUST.
WHAT DO WE KNOW? When it comes to insurance, we don’t know much, Schlegel says. “We—supply chain and operations professionals—don’t know anything about insurance. We run factories, supply chains. Finance people know about it. They buy hazard insurance, but that just mitigates risk to the bottom line. It’s property insurance, not disasters. And neither of these [departments] talk to each other except at quarterly meetings. “These two disciplines in a large manufacturing company are the two most powerful disciplines in the company,” he adds. “Supply chain handles 80 percent to 90 percent of the goods, and finance is driving income. We’ve got to get these two disciplines talking. If they’re sharing information, it can lead to a competitive advantage.” The correct insurance can help mitigate supply chain risk. It can augment anything you do as operations under supply chain risk, so explore what
SUPPLY & DEMAND CHAIN EXECUTIVE | March 2018 | SDCExec.com
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OUR PEOPLE MAKE US #1.
PROUD TO BE RECOGNIZED BY THE CUSTOMERS WE SERVE Being named the #1 National LTL Carrier for the eighth straight year by Mastio*, the industry’s leading benchmarking study, is humbling. It’s a credit to Old Dominion’s dedicated men and women who are always working toward perfection. But more importantly, the recognition reminds us of our continuing obligation to exceed your expectations.
Old Dominion Freight Line, the Old Dominion logo and Helping The World Keep Promises are service marks or registered service marks of Old Dominion Freight Line, Inc. All other trademarks and service marks identified herein are the intellectual property of their respective owners. ©2018 Old Dominion Freight Line, Inc., Thomasville, N.C. All rights reserved. Major League Baseball trademarks and copyrights are used with the permission of Major League Baseball Properties. Visit MLB.com.
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*Source: 2017 Mastio & Co. National LTL Carrier Report
3/14/18 8:33 AM
FEATURE your insurance providers and others have. Here are some things you should know: ❯❯ First-party commercial insurance covers profits that would have been earned. Few businesses could survive the loss of all or even a significant percentage of their personal property or real property without being compensated for that loss. ❯❯ Business interruption coverage pays for some ancillary costs associated with disruption. After all, when an event happens, revenue goes to zero, but costs still occur. ❯❯ Cargo insurance covers loss and damage while goods are in transit. ❯❯ Trade disruption insurance provides even more coverage, such as lost profits while cleaning up. ❯❯ Cyber insurance is getting bigger and better for supply chain. Remember, when your IT goes down, so does your supply chain. “There are new product packages coming out of the insurance industry, which is growing this line by leaps and bounds,” Schlegel says. “It’s on top of the [basic] premium you pay, so you still have to sell it to the executives.”
“SUPPLY CHAIN HANDLES 8090 PERCENT OF THE GOODS, AND FINANCE IS DRIVING INCOME.
WE’VE GOT TO GET THESE TWO DISCIPLINES TALKING.”
GOING GLOBAL
Global trade is in the news. E-commerce has changed everything. What’s going to happen with NAFTA? Will Britain’s exit from the European Union (EU) cause lingering disruptions? Risk is a key element in all of it and it’s a lot to keep an eye on. Global trade is accelerating in volume and complexity. The World Trade Organization (WTO) revised its most recent trade forecast to show improved growth in world merchandise trade volume. The number of tons shipped by ocean containers, for example, has multiplied almost 17 times from 102 million tons in 1980 to 1,720 million tons in 2016. Barraco asks the question: “Where are you sourcing today, because you may not get it tomorrow? There’s definitely a shift in sourcing back in the United States. Get the parts and manufacture it here.”
10
The U.S. government has, of course, rules and regulations for importers and exporters. These restricted party screenings include a restriction on doing business with entities the government deems a danger to U.S. interests. Restricted party lists are directories of organizations, companies or individuals that various U.S. agencies—and other foreign governments—have identified as parties that one can’t do business with. In the United States, the primary restricted party lists are published by the Department of Commerce, Department of State and Department of Treasury. However, several other agencies produce lists as well. These agencies recommend that companies perform restricted party screening periodically and repeatedly throughout the movement of goods in the supply chain. Scouring those lists—and Barraco says there are about 580 worldwide—is vital. It’s easy to slip up. According to a filing with the Securities and Exchange Commission, Amazon processed and delivered more than $24,000 worth of consumer goods to an Iranian embassy, as well as to an individual “who may have committed, threatened to commit or supported terrorism.”
E-COMMERCE AROUND THE GLOBE One way to help avoid risk is to have boots on the ground, advises Pelli. “Take out the traditional middlemen and go directly to the manufacturer in China and other countries. Small companies pop up to work with the factory in China—it’s just like a storefront. It’s another vulnerability. “We’re seeing growing consumer demand in China, Brazil and India. They have more money and companies are rushing into those markets. But compliance and other risk functions can make it difficult in emerging markets,” he says, adding that many companies fail to factor in the additional risks—and therefore additional costs—with doing business in those emerging markets. Ultimately, “You’re looking for greater visibility,” Pelli says. “Where’s the product coming from? Who’s touching your product where?” ABOUT THE AUTHOR BARRY HOCHFELDER is a freelance journalist who has covered a variety of industries in his career, including supply chain. He also served as the former editor of Supply & Demand Chain Executive. Hochfelder is based in Arlington Heights, Illinois.
SUPPLY & DEMAND CHAIN EXECUTIVE | March 2018 | SDCExec.com
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FUTUREPROOF
YOUR SUPPLY CHAIN AT MODEX 2018 Whatever manufacturing and supply chain solutions or insights you need to FUTUREPROOF your business, you’ll find them at MODEX 2018. With over 850 of the industry’s solution providers on site and more than 100 hands-on education sessions, MODEX 2018 allows you to make new contacts, discover cutting-edge solutions and learn the latest trends that are sure to give you a leg up on the competition.
MODEX Keynotes:
Georgia World Congress Center Atlanta, Georgia April 9-12, 2018
THE GREATEST SUPPLY CHAIN SHOW ON EARTH.®
Monday, April 9 8:45 AM – 9:30 AM
Tuesday, April 10 8:45 AM – 9:45 AM
Wednesday, April 11 8:45 AM – 9:45 AM
Wednesday, April 11 1:00 PM – 2:00 PM
Anticipating Tomorrow’s Supply Chain Challenges – Today
Harnessing Our Digital Future How the Digital Revolution is Accelerating Innovation, Driving Productivity and Irreversibly Transforming Employment and the Economy
2018 MHI Annual Industry Report Keynote Panel
Why Dirty Jobs Matter
JUAN PEREZ Chief Information and Engineering Officer, UPS
Monday, April 9 9:30 AM – 10:00 AM Welcome to MODEX 2018 GOVERNOR NATHAN DEAL Governor of Georgia
GEORGE W. PREST CEO, MHI SCOTT SOPHER Principal, Deloitte Consulting LLP
ANDREW MCAFEE Co-Founder & Co-Director, Initiative on the Digital Economy
MIKE ROWE Founder, mikeroweWORKS Foundation
MODEX is FREE to attend.
LEARN MORE AND REGISTER AT MODEXSHOW.COM.
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FEATURE
By Lorne Jones
The
INNOVATION ECONOMY Can Only Succeed through
INNOVATIVE TECHNOLOGY The manufacturing world has undergone massive transformation over the last several decades, and another big paradigm shift is on the horizon.
S
ince the dawn of the Industrial Revolution, manufacturers have relied on linear-type supply chains where materials are delivered to a plant and then assembled and shipped to a customer. With the rise of globalization, manufacturing in lower cost regions became more popular, and the idea of nonlinear supply chains began to take hold. In the non-linear supply chain, materials are instead shipped from secondparty suppliers to third-party manufacturers where they are assembled and sent down the demand chain through networks for distribution. Today, something radically different is happening. We have entered a new era; let’s call it the Innovation Economy. The Innovation Economy is characterized by unprecedented competition, with shorter and more exaggerated product lifecycles. Supply chains are global and matrixed, and manufacturing can occur anywhere in a network of locations based on everchanging market demand. Nowhere is the burden of supporting such a manufacturing paradigm shift greater than in supply chain management. Long considered a cost center, supply chains had been rigidly designed for high speed and low cost. Now, they are viewed 12
as a corporation’s circulatory system, enabling the dizzying pace of product introductions, enhancements and mass customization. Change used to be managed by exception. It is now the norm, and adapting to continually changing requirements is a critical success factor. To support change and succeed in the innovation supply chain requires three competencies: enabling agility, running lean and reducing cycle time.
THE INNOVATION ECONOMY IS CHARACTERIZED BY UNPRECEDENTED ENABLING AGILITY COMPETITION, Today’s continuous innovation WITH SHORTER AND focus is no longer about shipping MORE EXAGGERATED the same materials to the same PRODUCT LIFE CYCLES. plant faster and cheaper. In the Innovation Economy, planning and rescheduling cycles have shortened from weeks and months to hours, and in some cases, mere minutes. When assembly locations, or product line schedules change, set-up times, capital equipment and materials-in-transit must adapt quickly. More rapid product innovations mean constant sourcing. New product designs mean new parts, which also mean new vendors. The winners will identify, onboard and transact faster than the competition.
RUNNING LEAN Historically, “Buy more, it’s cheaper and we’ll use it eventually” was the mantra of the day. The
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notion of increasing production economies by overproducing no longer exists. Buying, producing and holding materials ties up working capital and employs unneeded production capacity and warehousing. In many cases, materials also get written off from obsolescence. In the Innovation Economy, it’s all about planning for salable production quantities, then superseding the products before price erosion occurs. Running a leaner supply chain means no excess free working capital that used to wait on the shelf, or worse, get reworked or written off because it won’t sell.
REDUCING CYCLE TIMES The Journal of Production Economics claims that “cycle time reduction is the prerequisite of business flexibility.” Thriving companies learn to compress the processing time of their internal operations to capture windows of market opportunities before the competition. Most of this time compression battle is played out across the supply chain. In addition to traditional metrics like the procureto-pay focus on cash flow, new metrics that measure supply chain adaptiveness are gaining importance. It’s now about sensing and responding to changes in demand as much as it is about days payable outstanding. By taking out excess over production, manufacturers can stop and pivot to the next more profitable build requirements. Thus, driving corporate flexibility and profitability.
To innovate effectively and maximize profits with shorter and more extreme lifecycles, industry requires a platform to collaborate across trading partners. But, it is not enough to just transmit data back and forth. Smart systems are needed to interpret this data and alert when needed, to prescribe optimal supply chain decisions.
MAKING IT ALL WORK Companies continually fine tune their internal systems to improve key business operations. Yet, they spend little time communicating and collaborating with the partners who drive them to share designs, forecasts or cash flow strategies. Some communication may occur with top-tiered suppliers, but typically it’s through a patchwork of faxes, EDI and emails, and long tail suppliers rarely receive any outreach. Networks are changing this. Supplier hubs are typically just one-to-many EDI networks. Newly designed networks, on the other hand, connect internal systems with entire networks of suppliers, and each supplier can have its own buyer and seller community within that same network. This networked connectivity brings the
TECHNOLOGY-DRIVEN INNOVATION Supply chain management continues to rely on electronic data interchange (EDI) for collaborating across trading partners. Piloted during the Berlin Airlift in 1948, it was a breakthrough in its day. By today’s requirements, however, it is slow, one-directional and error prone. When manufacturers used to plan in extended monthly time increments, EDI worked. Today, scheduling changes are made hours in advance. EDI cannot support the speed of today’s economy. Collaborating by batching and sending is obstructing the speed of innovation, and this requires real-time, agile platforms like business networks.
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FEATURE supplier community into planning and transactional systems, enabling companies to drive better control, visibility and supply chain responsiveness and take out days of inventory and millions of dollars of working capital from their supply chain. Today, there are two key operational categories within supply chains that require a digital transformation. The first focuses on compressing sourcing capabilities. The second concentrates on transacting collaboratively and digitally with suppliers.
MATERIALS SOURCING As manufacturers increase their rate of innovation, category managers have a growing burden to keep up. This requires accelerating sourcing functions that have traditionally been paper-based and understaffed. The need is growing to eliminate the reluctance to conduct sourcing events and increase performance in this strategically important sourcing role. Until now, category managers have struggled through events with incomplete product information, component history and sourcing requirements. Digital solutions are changing this. Cloud-based applications for direct spend sourcing, for instance, leverage existing information in product and lifecycle management systems to automate the entire process. With the right solutions in place, companies can: ❯❯ Increase business agility by responding to business sourcing requirements faster. ❯❯ Reduce the cycle time required to run sourcing events, providing faster response for new product development and transacting with new suppliers. ❯❯ Run leaner by automating cumbersome and labor-intensive sourcingto-contacting activities. ❯❯ Take out hard dollar cost from better informed and more frequent sourcing events. ❯❯ Mitigate risk in supplier selection.
SUPPLY CHAIN COLLABORATION At one point, the manufacturing plant was across the street and planners could walk over and work on schedule changes directly with the plant manager. Today, the contracted plants that a growing number
of company’s use are 13 time zones away, and require rigid scheduling along with local support to manage language and cultural barriers. Leveraging business networks and the cloud-based applications delivered on them, companies can collaborate across global supply chains anywhere, anytime using any device and, among other things: ❯❯ Forecast collaboratively with entire supply base and receive commitments back as schedules change. ❯❯ Manage complex multi-tiered supplier orders. ❯❯ Synchronize inventory and backflush information with contract manufacturers and other remote locations. ❯❯ Monitor and exchange product quality information. ❯❯ Score card supplier performance. ❯❯ Receive, audit and process supplier invoices. ❯❯ Track and trace order status. ❯❯ Enable supplier managed inventory to monitor and initiate replenishment orders. Today’s supply chains are more global and complex than ever. The key to successfully managing them lies in collaboration. Companies that embrace this notion can deliver significant results. The supply chain drives performance and enables businesses to run leaner and more efficiently. Specifically, this collaboration empowers companies to: ❯❯ Gain control of inventory and manufacturing operations of outsourced providers to make unplanned changes to schedules. ❯❯ Reduce working capital and excess inventory in the supply chain. ❯❯ Reduce staffing time required to monitor outsourced operations.
A NEW WAY FORWARD The manufacturing world has undergone massive transformation over the last several decades, and another big paradigm shift is on the horizon. With the help of digital technologies, manufacturing will move from build-for-scale to build-for-more frequent, extreme and shorter product lifecycles. In doing so, it will aid in transforming companies into leaner, meaner and more agile machines that fuel innovation across the economy.
ABOUT THE AUTHOR LORNE JONES is the director of supply chain solutions for SAP Ariba. In this role, he is responsible for SAP Ariba’s supply chain field operations in North America. Jones has held executive leadership roles in product management, sales and marketing at SAP and other supply chain solutions providers like IBM and Oracle. Prior to roles in technology, he ran third-party logistic operations across the northeastern United States for companies like Bose, TJX, LL Bean and HP.
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MADE IN AMERICA By Amy Wunderlin
The Secret to Success?
FAILURE Quality American manufacturing helps Holtz Leather Co. grow from basement to booming business.
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nventor and industrial titan Henry Ford once said, “Failure is the opportunity to begin again, more intelligently.” The story of the Huntsville, Alabama-based Holtz Leather Co. is a prime example of that notion. The family-operated leather crafter of wallets, journals, portfolios and other items began in 1997 and has grown steadily with a focus on American craftsmanship and quality. “Holtz Leather began after a very low point in our lives,” says owner Rick Holtz. “We had lost a business, our home and nearly become homeless. Searching for our next step was difficult with several failures behind us. We didn’t know really what direction to take; we only knew we wanted to make a tangible product with our own hands, something we had full control of from the design and quality to the production and packaging.” With a dream hatched, Rick and his wife Coleen began to teach themselves the leather trade. “We poured into reading and watching how-to videos and taught ourselves the process from the ground up,” he recalls. The couple first experimented by listing a simple product on Etsy—a single rivet keychain. Sales quickly began 16
to grow, as well as their confidence. “Slowly we started adding more complex leather goods and building on the foundation that we can teach ourselves how to do anything,” Holtz adds. Their do-it-yourself principles allowed the company to start small and stay committed to quality, growing into more than 30 employees in two separate facilities. In November 2017, Holtz Leather also opened its first retail location in Huntsville.
QUALITY OVER COST It’s not a new concept. American manufacturing is more expensive. But for handmade fine leather goods, having the ability to handle each and every item that bares the Holtz brand, the owner says, is worth it. “Viewing ourselves as storytellers just as much as leather craftsmen, we want the story that we pour into our leather goods to be as rich a chapter as possible, from start to finish. Choosing to craft all of our goods here in the United States gives us the greatest control and influence over our story,” explains Holtz. He adds: “American manufacturing for us is about quality, honor and hard work. Stamping each of our products with ‘Made in America’ is our commitment to the highest quality possible both to our team and to our customers.” In addition to storytelling, family is another fundamental pillar of the Holtz Leather values. “We never want our business to take away from family, so by keeping all our manufacturing here in Alabama we are able to maintain those strong bonds of family,” Holtz emphasizes.
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A LESSON IN LEATHER
“We are seeing a shift in our culture where people want to be a part of a story that lasts,” adds Holtz. “Every product that leaves our workshop tells the story of quality craftsmanship.
All Holtz Leather products are handmade in Alabama with full grain American leathers. Full grain refers to the top layer of the hide that contains all of the grain. The surface of full grain leather softens and becomes more visibly appealing with age, and is considered the highest grade of leather. There are three additional grades of leather: top grain, genuine and bonded. Top grain is split from the top layer and then sanded and refinished. Genuine leather is usually spraypainted to resemble a higher grade, and bonded leather typically comes from China. It is leather that is ground up like meat and glued together. Holtz Leather hand picks its leather hides from an American tannery that has been in operation for more than 150 years. Like the company itself, the leather tells a story with real-life markings, which may include bug bites, scars and fat wrinkles.
“We are seeing a shift in our culture where people want to be a part of a story that lasts. Every product that leaves our workshop tells the story of quality craftsmanship… all these steps tell the story of American hard work that this country was founded on.” — RICK HOLTZ, OWNER From the American steer that was raised on an American ranch to the American tannery that prepared the leather for our American workshop, all these steps tell the story of American hard work that this country was founded on.”
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PROS TO KNOW 2018 By Mackenna Moralez
PROS TO KNOW I NGC Software’s Mark Burstein stands apart from the year’s most influential supply chain leaders as he lends a hand in the fashion industry’s retail revolution. hen asked what qualities a Pro to Know should have President of NGC Software Mark Burstein answered, “They must have a passionate drive to find solutions to common problems. They must be a generalist in all areas of their business, and a specialist in most...Finally, they should establish a three- to five-year plan, and pivot when necessary.” Burstein’s answers reflect on all the work he has done in the fashion retail industry, earning himself the top spot as Supply & Demand Chain Executive’s (SDCE) Pro to Know of the Year. In today’s supply chains, leaders are required to rapidly respond to constant change and adapt to an ever changing global economy. For the last 18 years, SDCE has identified and recognized these leaders, bringing them to the forefront as Pros to Know. “I was in Asia and woke up around 4:30 a.m. and see all these emails going back and forth saying Pro of the Year. I opened it up and was like, ‘Wait. What?’ I would say it’s the highest honor that I’ve had in my career,” Burstein says in regards to his recognition. And like most great leaders, he says the award is less a reflection on him, however, but more so his team. “It’s just my name and my face. It’s really my company. Every one of my teams bend over backward to make sure that the product is right and that the customers are happy… if I didn’t have those teams and I didn’t have a product, there’s no chance I would have gotten this. It’s the highest honor I’ve received, but it’s not due to my work, it’s due to my company and my team’s work,” he adds. Every year SDCE’s editorial staff sifts through more than 400 entries to find the best leaders in the supply chain field. These selected winners then become our Pros to Know, a coveted list that includes practitioners, providers and teams. The job becomes even harder as the staff narrows down and selects our Pro of the Year. This individual stands out with his or her leadership skills, business acumen, exceptional attitude and passion for the industry, helping him or her reach the top of our list. Burstein earned our highest recognition due to his revolutionary work in the fashion retail industry, specifically his hand in creating Andromeda, a software program that empowers the digital supply chain 18
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W IN 2018 by linking retailers and brands with their vendors, factories, suppliers, agents, logistics partners and global trading partners in one unified network. Landing in the position he’s in now wasn’t the easiest task, however.
RISKY BUSINESS Prior to his success at NGC Software, Burstein was working 100 hours a week as a technology consultant and living out of a suitcase when his father called him asking to join his company running sales and product development. He told him they had just opened a new customer, Victoria’s Secret; it only had 10 stores but were expecting to grow quickly. As his father’s company grew, they ended up selling the company and opened factories in Mexico. “That’s when NAFTA had become really big. So, I built factories, which was my big mistake,” Burstein says. “When you have a factory, you have to keep the workers busy consistently. A busy factory makes a little bit of money. A slow factory loses a lot of money.” In an attempt to keep his factory bustling until the next fashion season, Burstein bid on a multi-million unit contract, but lost out to a business in China whose production costs were 10 percent less than his. Realizing that he couldn’t compete with pending quotas, Burstein shut down his production and pulled out of the apparel manufacturing business. “My biggest risk was making that decision to close everything I’ve worked for... Like turning off a light switch,” Burstein recalls. “I saw that there was no way I could build a sustainable business without being competitive on price. That was my big career changing moment.” After closing down his production, Burstein joined NGC Software as a sales director. The company had just launched e-SPS, a web-based product lifecycle management (PLM) and supply chain solution that connected brands and retailers
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to overseas factories; this was quickly becoming NGC’s flagship product. “If you think of our solution, think of Facebook,” explains Burstein. “Instead of logging in and seeing your friends, you see your styles, your products, what is in development, what is in production, what is inbound shipping. Instead of sending emails, it’s like writing on your wall. Everybody’s communicating and collaborating through the platform instead of outside the system.” As PLM software continued to grow, Burstein was promoted to vice president of PLM solutions and eventually president of sales, marketing and development. Burstein continued to improve NGC Software while fashion retailers were going through what has been referred to as the “retail apocalypse.” Household name brands like American Apparel and Sports Authority were closing down. However, fast-fashion brands like Zara were doing well, and retailers wanted to be just like them.
“MY BIGGEST RISK WAS MAKING THAT DECISION TO CLOSE EVERYTHING I’VE WORKED FOR…THAT WAS MY BIG CAREER CHANGING MOMENT.” “Our entire economy is based on consumption. The populace continues to buy goods and services, but there have been radical changes in what and how they buy,” Burstein says. “Today, the successful business model is not about creating a new product line that debuts in two years, but reacting to a hot style or trend and bringing it to market with efficiency and speed.” In response, Burstein and his team developed a “read and react” strategy where every supply chain has the goal of getting the product to the consumer who wants to purchase it. A digital supply chain has become crucial for the read and react strategy because it eliminates the linear, manual handoff of information from one department to another. Managing the supply chain with Excel spreadsheets and email causes false data, long lead SDCExec.com | March 2018 | SUPPLY & DEMAND CHAIN EXECUTIVE
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PROS TO KNOW 2018
times and guesses about which product will be popular months ahead of time. “Buyers are often incorrect, which leads to excess inventory in some products and shortages in others. The resulting markdowns and stockouts hurt revenue, profit and net margin. Every product sold at a discount, and every missed sale is a direct hit on revenue and profitability. A 25 percent reduction in markdowns and stockouts would lead to a 15 percent boost in gross revenue and a 50 percent lift in net income,” Burstein says. Seeing the success of e-SPS and how more people were implementing their PLM software, NGC was able to create Andromeda. Prior to its release, a company would have to replace their PLM, SCM or other enterprise systems with NGC’s module, but Andromeda allows the company to keep its existing software and just pass mission-critical data on to Andromeda. “My ‘aha’ moment occurred during a session at the Microsoft Inspire conference last year... In the middle of this session, I realized that Andromeda is not an end-to-end software application suite. Andromeda is a cloud platform that enables the digital supply chain,” Burstein says. With Andromeda, companies are able to capitalize on
…HE HAS LEARNED TO TAKE THE TIME TO LISTEN TO HIS TEAM AND FIGHT FOR HIS BUSINESS BECAUSE THERE WILL ALWAYS BE SOMEONE WHO WANTS TO TAKE IT AWAY FROM YOU. their current investments without ripping out and replacing their legacy software applications, making all the difference to Burstein and his team’s success. Andromeda has been able to help brands focus on different solutions to their problems. One brand was able to cut their lead time from 17 weeks to 4 weeks, while another retailer was able to save three weeks in transit time, $15.45 in freight per carton and reduced its carbon footprint.
SCHOOL OF THOUGHT Burstein has worked with deans and executives at the Fashion Institute of Design and Merchandising (FIDM) over the course of a few 20
years to realize the future of the fashion industry is in the digital workplace. FIDM added the Andromeda software in its merchandise product development, apparel industry management, menswear, and apparel technical design majors in January. Teaching the software is an advantage to both the school and the students since they will have the insight and knowledge of a program that is utilized by major fashion brands prior to graduation. “One of the most gratifying moments in my career was when I heard that all the students are so excited to learn Andromeda as part of their class,” Burstein says. Outside of NGC Software, Burstein is also an active member in industry organizations. The knowledge that he gains from the organizations influences the decisions that he makes at NGC. “When I hear the same challenge repeated by multiple executives, I realize that there is an opportunity for industry improvement. My team and I research the issue, design a viable solution and present it to the executives to see if they can find any weaknesses or flaws,” Burstein explains. “Once the design is approved, we move forward and build the solution. ” While Burstein continued to improve his company, he learned valuable lessons along the way. Knowing that there will always be challenges ahead—whether in work or life—he has learned to take the time to listen to his team and fight for his business because there will always be someone who wants to take it away from you. “You have to listen to people. You have to listen to their opinions and then make the decision on how to move forward. I’ve seen a lot of times where people make rash decisions and it would come back to be the wrong decision,” he says. Going forward, Burstein plans on evaluating integration with blockchain platforms that will enable faster, cheaper and more flexible supply chain transactions. In addition, adding tools that utilize artificial intelligence can help users make the best decision faster. “It’s possible to envision that Andromeda will become a cognitive solution that automatically executes supply chain transactions without human intervention,” Burstein says. “Stay tuned.”
Now let’s pay tribute to each of 2018’s Pros to Know…
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PROS TO KNOW 2018
2018
Provider Pros to Know JERRY RAU, Chief Operations Officer, 3Gtms
Rau has decades of supply chain experience as a vendor and working with supply chain and transportation software solutions from the carrier/3PL perspective. His unique background shapes his approach to solving customer problems and providing meaningful solutions that deliver lasting value. He has served in numerous leadership capacities and uses those experiences as the chief operations officer at 3Gtms. Rau leverages his past experiences to ensure the focus is on customer satisfaction throughout each engagement.
CHAD SYMENS, President and CEO, Accelerated Analytics
Symens is the founder and CEO of Accelerated Analytics. He works with the brand’s outsourced departments to handle all POS analysis and data reporting needs and provides their
teams with customized reports and flexible ad-hoc analysis tools. Symens works with customers in consumer products, DIY/home and hardware, apparel and cosmetics. With his product, brands have access to sales performance, trends, week of supply, GMROI, turns, inventory levels, sales to stock ratios, average selling and sell through.
TREVOR READ, President, Agistix
Read has a passion for data, a deep understanding for global supply chain continuum and associated technology challenges required to integrate, correlate and automate data across multiple disparate systems. Read brings a unique technology perspective to global supply chains to align and streamline transactional information across countless supply chain partners. Read is the CTO of the supply chain, not only aggregating and correlating transactional data, but he also provides a rich visualization tool so clients can easily digest information and proactively manage supply chain activity.
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PROS TO KNOW 2018
HANNAH KAIN, President and CEO, ALOM
Kain’s career as a supply chain executive and industry visionary has accelerated over the past years. Kain has put the “pedal to the metal” in positioning ALOM for future growth and success through investments in technology, staff expertise and industry advocacy. In addition, she spearheaded an internal initiative to upgrade all ordering processing and freight management systems and developed a recruitment and staffing plan to fill critical skill sets that would fuel aggressive growth over the next 10 years. Kain is involved in advocating for industry career opportunities through ALOM membership and support of other industry organizations. She has hosted events and open houses at ALOM for student groups and has been a featured speaker and industry panelist across the country. Kain continues to promote career opportunities in supply chain, especially focused on STEM learning for young women.
JON SLANGERUP, Chairman & CEO, American Global Logistics
Salngerup joined American Global Logistics as chairman in April 2017 and was appointed executive chairman and chief executive officer in July 2017, bringing 36 years of experience. Rather than apply an off-the-shelf software and tweak it to unique needs of its customers, under his leadership, AGL tailors solutions for each customer. Slangerup has built businesses throughout North America, Europe and Asia, serving customers in more than 100 countries.
SHANKARA GURUMURTHY, Supply Chain Practice Director, Arkieva
Gurumurthy leads a team of supply chain consultants delivering solutions for global manufacturing companies. Presently, Gurumurthy is leading a global implementation of a one-plan S&OP system at AkzoNobel, which includes demand planning, financial planning, inventory and supply planning as part of integrated business planning. Since joining the Arkieva team in 2008, Gurumurthy has focused on setting up demand planning systems in both tactical and strategic time horizons. His tasks ranged from gathering the client requirements, developing a viable sales forecast, building business-centric collaborative models and creating actionable metrics to achieve overall operational efficiency.
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JASON AVERILL, Executive Vice President, Avercast LLC
Averill is a second generation forecasting/demand planning expert with more than 20 years in the industry. Averill is a proponent of end-to-end supply chain collaboration. Many of his current projects are working with customers to facilitate a common medium of web based communication that translates the entire end-to-end supply chain planning process to all trading partners. He is able to help his customers reduce their lead times, increase inventory turns, improve customer service levels and facilitate an overall lower supply chain cost. As the executive vice president, Averill is able to work directly with many industry executives and practitioners to advance industry research, collaborate on new theories and improve available technologies.
PETER ZALINSKI, Product Manager, Identification Solutions, Barcoding Inc.
Zalinski continuously enables customers to become more efficient, accurate and connected in the supply chain industry. He has helped customers create compliance labeling solutions for supply chain management using a variety of platforms and has witnessed the evolution of GS1, UID and RFID standards from close-up. Zalinski is a jack-of-alltrades when it comes to problem solving and solution resolution. Using his experience in the field, Zalinski understands the importance of not only tracking data, but analyzing it to gain further visibility into the enterprise as a whole so that supply chain leaders can make better decisions and drive growth.
JAKE BARR, CEO, Blueworld Supply Chain Consulting
Barr is known in the industry for his deep supply chain mastery and ability to provide critical business transformation insights. He was the architect of both the original “demand-driven” movement and most recently supply chain transformations leveraging control towers and next generation simulation and trade-off analysis. Barr has earned the reputation as a Provider to Know across multiple industry verticals.
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PROS TO KNOW 2018
KATIE KINRAID, General Manager, APAC, BluJay Solutions
Kinraid is an innovative leader who keeps a continuous eye on the market for what’s next. Her cross-functional leadership experience in the supply chain industry gives her valuable perspective to help companies meet their greatest challenges. Kinraid has served in global marketing and product leadership roles that give her the responsibility of design, development, implementation and delivery applications. Her solutions have delivered value for customers and helped to save millions of dollars. She continues to influence companies’ adoption of technology and collaborative, connected solutions that provide the visibility and analytics to help them meet challenges.
SETH BLAUSTEIN, Solutions, Director of Marketplace Development, B-Stock
On a daily basis Blaustein delivers reverse supply chain support for nine of the top 10 U.S. retailers. Since joining B-Stock, he has immersed himself in providing solutions for over 200 retailers and manufacturers, including launching, managing and overseeing private, customized liquidation marketplaces for over 50 clients. Blaustein has been instrumental in establishing a logistics program/partnership with CH Robinson, Yusen and FedEx. These programs have helped streamline shipping operations for the reverse flow of inventory. The first program, which began between CH Robinson and Walmart, has now carried to other accounts, with customized shipping integrations offered as part of B-Stock’s client onboarding process.
SEAN CLELAND, Director of Mobile and Business Development, B-Stock Solutions
Cleland has worn many reverse logistics hats during his time at B-Stock Solutions. He has established partnerships with logistics, finance and inventory processing organizations including, CH Robinson, Freight Quote and Electronic Recyclers International. Cleland was in charge of launching the inside sales team responsible for growing the client base. Under his leadership, the marketplace went from three new sellers a month to 30. Most recently, Cleland became head of B-Stock’s mobile division, serving as the executive point of contact for all of their mobile clients.
MARSHA YOUNG, Director of Business Systems and Implementations, Cass Information Systems Inc.
Young is a veteran in the freight audit and payment industry, understanding the critical impact transportation expenses can have on the overall health of a company’s supply chain. She guides and
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designs systems to best use practices to forecast transportation expenses that allocate transportation costs and use data for optimization of transportation and logistics networks. Young’s experience and knowledge in industry verticals provide insight into the client’s needs and is able to provide customized transportation rating, audit and business intelligence solutions that help create company advantage.
WILLIAM (BILL) MRZLAK, President, ChainSequence Inc.
Amassing a wide range of experience and expertise across different industries and organizations all over the world, Mrzlak has earned enormous respect by providing supply chain and sales and operations planning services for over 25 years. He has attained the level of elite status because of his practical leadership, breadth of knowledge and singular ability to demonstrate a sound business case for change management among executive leadership and follow through on this plan with a sustainable implementation strategy. Working side-by-side with cross-functional and organizational teams to guide the process, Mrzlak’s proven approach consistently results in positive, quantifiable improvements and long-term success.
JONATHAN SISLER, President, Coyote Logistics
Sisler is a global and strategic leader with more than 15 years of experience. Starting in 2008, Sisler served as the chief financial officer. When UPS acquired Coyote in 2015, Sisler’s extensive industry knowledge and leadership experience led him to assume a new role as president of Coyote. In his first year as president, Sisler continued to lead Coyote as a new subsidiary of UPS. Almost two years after the UPS acquisition, Coyote is still a leader in the industry. Two thousand seventeen was a special year for Sisler because Coyote broke every metric it tracks: volume, revenue, gross margin, headcount and more. Sisler has helped transition Coyote from a private equity-backed startup to an established industry leader and UPS subsidiary.
BILL HARRISON, President, Demand Management Inc.
Harrison is a visionary and a disruptor. Rather than simply providing manufacturers and distributors with solutions that allow them to keep doing business the way they always have, Harrison stays abreast of how changes in the market will impact the supply chain, giving SDCExec.com | March 2018 | SUPPLY & DEMAND CHAIN EXECUTIVE
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companies the solutions to face those challenges. His mindset was what led him to take supply chain planning to the cloud by re-architecting and rewriting the entire Demand Solutions and product line for the web.
ANN DRAKE, Chairman and CEO, DSC Logistics
Drake has served as DSC Logistics’ CEO for the last 20 years, transforming the company and supply chain industry. She has guided DSC to become one of the nation’s leading supply chain management firms by creating a business model based on collaborative partnerships, innovative thinking and high performance operations. Drake is also involved in groups focusing on infrastructure and transportation as they impact America’s global strength and competitiveness.
STEVE MURPHY, CEO, Epicor Software
As the CEO, Murphy heads the organizations efforts to provide the leading technology and expertise to help Epicor customers gain the visibility and control to drive supply chain excellence. Since joining in October 2017, Murphy brought his 20 years of experience to help provide a long-term strategic vision for the company, focusing on customer experience and delivering innovative products, services and support that drive business growth.
THIERRY JAFFRY, Vice President Operations, North America, Flucticiel Inc.
Davis is a supply chain professional with a long record of driving results for his clients. He brings more than 20 years’ experience directing, improving and consulting for the supply chain operations of Fortune 500 companies. . As a senior director at Fortna, he manages the firm’s largest projects – multi-year transformations of distribution operations for clients. Davis has been published and quoted in a number of trade journals and is a popular speaker at industry conferences. He holds a number of supply chain certifications and gives back by volunteering with a number of charitable organizations.
JOHN GIANGRANDE, Director, Sales, Fortna Inc.
Giangrande is an innovative supply chain strategist who helps companies transform their complex distribution operations into a competitive advantage. He is highly regarded for driving large-scale transformation projects. He develops a strong business case for investment and gets alignment across a diverse group of stakeholders. At Fortna, Giangrande helps high-growth companies develop their distribution network strategy, conduct operational assessments, and assists in the design their distribution centers.
SRINI VAIDY, Founder and President, Highway 905
Jaffry has been in the procurement systems space for nearly 20 years. Since founding Flucitciel in May 2016, they have had consistent growth in the United States and Canada. Jaffry has signed major clients, and within these projects, he has been able to help his clients implement the best procurement practices under his expertise. Jaffry is a regular speaker at events and frequently writes blogs about procurement challenges.
Vaidy has established vision in the supply chain and logistics space with a passion for coding. He was recognized as a key innovator in developing the state-of-the-art Warehouse Management System while working with IBM Application Lab and Honda’s manufacturing unit. Being a visionary in his domain, many of the best global Fortune 100 companies have sought his expertise and still consult him on numerous occasions. Vaidy has been actively involved in helping clients realize their business visions with a strategic roadmap for their supply chains.
TRAY ANDERSON, Vice President, Strategy, Fortna Inc.
DAVID MARCHAND, CEO, ICIX
Tray Anderson has over 20 years of consulting and industry experience blending his operational knowledge with consulting know-how using worldclass tools. Throughout his career he has facilitated solving complex problems using integrated solutions with the goal of making organizations more effective. He has been integral in over 150 projects to lead investments in various supply chain infrastructure needs in transportation, warehousing and real estate. He works with the C-suite on a daily basis to build a business case for change that yields the desired return on investment. 24
CHRISTOPHER DAVIS, Sr. Director, Professional Services, Fortna Inc.
Marchand led ICIX in creating and implementing ICIX 2.0, a major innovation that amplifies the capabilities of ICIX 1.0 by putting it on the Salesforce platform. The upgrade makes it possible to easily share compliance information throughout organizations. Marchand understands that transparency is the basis for supply chain trust and risk management.
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MATT SMITH, Chief Strategy Officer and Founder, ICIX
Smith is a leader with a vision for creating and constantly improving technology that helps companies collaborate with their supply chain partners to advance product safety, compliance and social responsibility efforts. He founded ICIX and ensures that all of the trading partners in their extended supply chains meet their objectives in these areas. Smith is a regular featured speaker at major events, such as the International Consumer Health and Safety Organization, American Apparel and Footwear Association and the Global Food Safety Initiative.
TOM BARNES, CEO, Integration Point
Barnes has been a leader in the industry for 28 years. His close collaboration with his customers has resulted in ongoing expansion and enhancement of Integration Point’s offerings, making them one of the world’s most recognized brands. Under his leadership,
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Integration Point has developed the most comprehensive GTM solution on a single platform that integrates with major ERPs, thousands of supply chain partners and numerous government entities. As a key figure in the industry, he has demonstrated his passion for the field and that shows itself in the enthusiasm of his employees. Barnes is a sought-after speaker at many industry events and is a strong supporter of ongoing education. He has collaborated with several universities to build future expertise in global trade compliance and sits on the International Business Board at the University of South Carolina.
ANNE OMROD, Founder and CEO, John Galt Solutions
With more than 20 years of experience in the supply chain industry, Omrod is a true industry expert. She has helped numerous companies develop their supply chain processes and improve business results. Omrod is dedicated to the success of every customer and is proving time and time again that her solutions move the supply chain industry forward.
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KARIN BURSA, Executive Vice President, Logility
Bursa has more than 25 years of experience in the development, support and marketing of software solutions to improve and automate enterprise-wide operations. Bursa is viewed as an expert resource on topics related to supply chain planning and retail optimization, and is frequently sought after by industry-leading magazines. Bursa is also passionate about giving back and helping her local community. For more than 10 years, she has been on the board of the Empty Stocking Fund (ESF), a 90-yearold program that helps children in poverty around Atlanta experience a brighter holiday season. She has helped champion the program at Logility, helping more than 1,000 children in the last year alone.
ALLAN DOW, President, Logility
Dow believes a company’s technology provider should be a consistent partner that they can rely on. As part of this focus, he has led several critical initiatives for Logility that have made a tremendous impact on both the company, and more importantly, its customers. Dow continues to invest in programs that deliver on this mantra. Through his leadership, Logility acquired privately-held Halo Business Intelligence. As supply chains transition toward a digital era, driven by algorithmic planning and machine learning, companies need a single, integrated platform to simplify the growing complexity and abundance of both structured and unstructured data.
ED THOMPSON, Executive Vice President of Global Services, Logility
As the executive vice president of global services, Thompson leads a team of more than 65 supply chain experts across the globe. He encourages innovation and believes that no idea is too small. Thompson is well respected across the industry for his “hands-on” approach with customers, and makes it his mission to build relationships based on trust to ensure customers achieve the highest level of support and success. One of his main goals is to combat the talent gap that is plaguing the industry by providing companies with the knowledge and strategic planning to best optimize their supply chain teams. In addition, he continues to build a central resource for all levels of supply chain expertise through Logility’s Optimization Services.
JOCHEN SCHUEHLE, CEO USA and Canada, Miebach Consulting
Schuele brings 24 years of experience into the supply chain industry and has supported clients around the world on designing, optimizing and implementing state-of-the-art supply chain. His project work has touched nearly all aspects of the supply chain across all industries. Under his 26
leadership as the CEO of Miebach’s North American operations, the organization has seen sizable growth. His career has led him around the world, having worked on engagements in not only North America, but also across Europe, Asia and Latin America.
MARTIN VERWIGMEREN, Founder and CEO, MP Objects
Verwijmeren is a veteran in the supply chain industry and has a long track record of leveraging technical innovations to help organizations improve their supply chain execution performance. As founder and CEO of MP Objects, he has significantly grown its worldwide customer base since its launch. Verwijmeren has both academic and professional credibility in the logistics and supply chain industries. His passion for using technology to optimize complex orders and their execution in the supply chain has resulted in an innovative, flexible cloud solution that will be taken into consideration for the nascent Gartner Magic Quadrant categorization of Multi-Enterprise Business Networks and Platforms.
DONALD HOEPPNER, Executive Partner, Paladin Associates
Hoeppner is an executive with over 30 years of GE global multi-functional leadership experience. He helped co-found Paladin Associates, where he serves as the executive partner. Hoeppner assists clients with technology implementations while delivering significant savings, which improve cash flow and profitability and shareholder value.
MATT YEARLING, CEO, PINC
As the CEO of PINC, Yearling’s key focus has been on automating the digitization of inventory, equipment and processes for the company’s customers. His leadership has been crucial in applying innovative unmanned aircraft technology and autonomous drones, coupled with optical RFID and other sensors, to improve the journey and drive value in the supply chain. Yearling has established himself as a leader in the digital supply chain and inventory robotics space. In 2017 alone, he spoke at more than 15 trade shows and conferences. Yearling has contributed to several publications with original articles and continues to be a contributor to leading research firms about these topics.
JOHN COSTANZO, President, Purolator International
Costanzo has overseen Purolator International’s growth from a small freight forwarder to the comprehensive supply chain and logistics services provider it is today. Costanzo has driven
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the company’s success with a commitment to innovation and service. Never content with the status quo, he continually inspires employees to come up with creative ways to help clients better their customers. To measure customer satisfaction, Costanzo conducts an annual survey to gauge each customer’s overall experience with Purolator International, earning them a performance rate of 97 percent. Costanzo realizes that a key element to providing customer satisfaction is to have a happy, motivated work force. Costanzo also measures the employees’ satisfaction, receiving the highest amount of positive feedback in 2017.
JEFF BUTLER, Product Manager, Logistics Solution, Quintiq
For nearly 10 years, Butler has employed advanced analytical techniques to optimize operational decisions. Butler has tackled various industry challenges and has developed impactful solutions resulting in efficient gains. He works with customers to transform old assumptions into current data through machine learning. Butler determines what factors impact a driver and enthusiastically works with his customers to optimize their transportation plans.
MIKKO KARKKAINEN, Group CEO, RELEX Solutions
With more than 15 years in the field, Karkkainen has become an expert in supply chain planning. Karkkainen reached early success by being one of the three co-founders of Relex Solutions, Europe’s fastest growing technology company. As the group CEO, Karkkainen is responsible for day-to-day operations and relationships with clients. He has published more than 30 papers on supply chains, and his constant contributions to the industry make him a Pro to Know.
KIRK STUDDIFORD, Director of Client Services, Synchrono
Studdiford establishes immediate creditability with operations, supply chain, IT leaders and more based on his vast knowledge of lean and demanddriven manufacturing. His expertise is sought out by clients across the globe for his ability to quickly diagnose issues and put forth
PETER SHIN, Director of Pre-Sales for North America, Quintiq
For over 10 years, Shin has advised companies in the modernization and transformation of their critical operation decisions. Shin obtains companies’ goals by defining the corporate strategy agnostic of supply chains and identifying supporting KPIs that indicate whether or not the supply chain changes are working toward their best efforts. Shin is not afraid of modernizing; in fact, he encourages it. Shin continues to coach companies to reinvention with much success.
The Distribution Experts®
Congratulates our 2018 Pros to Know Tray Anderson Vice President, Strategy
Chris Davis
FRANK DREISCHARF, Vice President of Supply Chain Solutions, R2 Logistics
Dreischarf ’s extensive knowledge and experience in the transportation industry has spanned over two decades. He has held high-level positions with companies where he was responsible for logistics strategy and execution supporting $2.8 billion in annual revenues. In his current role, Dreischarf is responsible for developing and managing R2’s multi-modal and supply chain service offerings. He believes logistics is a relationship-based business and the foundation for any successful relationship is integrity and trust.
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Senior Director, Professional Services
John Giangrande Director, Sales
www.fortna.com
1.800.367.8621
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a plan of action. Studdiford instills his knowledge, high performance and laser focus on what’s important to the customer throughout his entire team.
SOPHIE DABBS, Vice President of Solutions Engineering, Transportation Insight
Dabbs launched the enterprise logistics provider’s solutions group and leverages a diverse supply chain and client management background, working for carriers, shippers and other 3PLs. She guides her Transportation Insight team through the design of solutions focused on transportation management, carrier sourcing and business intelligence to achieve material cost savings, access to actionable data, increased supply chain visibility and risk mitigation. Dabbs is a passionate and results-oriented professional who is skilled in understanding both subtle and complex business challenges. Working alongside Transportation Insight clients, Dabbs creates achievable action plans and helps partner companies understand the importance of creating and evolving those action plans around change management as goals are reached and strategies evolve.
GERRY ROMANELLI, Chief Commercial Officer, TRIOSE
BILL LOFTIS, Senior Director, Integrated Solutions, Transportation Insight
Beda assists clients with formulating and executing strategies related to transportation spend management. As part of overall program management, he also assists with the ongoing measurement of execution strategies using various key performance indicators and associated influencers. Beda has spent the last 25 years working with companies on supply chain automation, execution, compliance and spend management strategies. He has assisted dozens of clients with contract optimization strategies through coordination of transportation RFP’s as well as measurements of savings post-RFP. Beda has blended the effective use of predictive modeling, modal expertise and an optimized process for all modes of transportation, saving companies up to 15 percent in transportation spend.
Loftis provides shippers with a blend of tactical knowledge and strategic philosophy gained during 35 years of supply chain experience to facilitate solutions that solve strategic problems. By bringing together real-world solutions and clients’ strategic needs, Loftis works not only to implement transportation improvement processes for clients, but also to help them understand how a shift in approach across the entire supply chain can create opportunities to provide an integrated solution delivering enterprise-wide results. His most recent work focuses on consumer packaged goods companies and grocery retailers, where these companies increasingly rely on best-in-class supply chain performance to improve business results.
KEN WACKER, Executive Vice President, Enterprise Business Solutions, Transportation Insight
Wacker has more than 30 years in the industry helping clients transform their supply chain and back-office functions to make them more effective, efficient and profitable. Wacker’s expertise allows him to approach business challenges with a strategic view, enabling him to understand boardroom-level missions and goals and how they can cascade into the supply chain. Wacker leverages his executive lens to help clients assess supply chain risk, 28
improve process compliance and facilitate practices that improve business sustainability. His experience driving profitable business growth makes him a valuable resource for strategic initiatives, vertical market penetration and client relationship development.
Romanelli has led the charge to shift focus at TRIOSE toward partnering with customers to best identify the right supply chain solutions to help them optimize their entire systems. During the recent hurricanes, hospitals encountered supply shortages that left the facilities unable to operate. TRIOSE has a contingency plan in place to assist healthcare facilities. Part of Romanelli’s goal is to function as a facility’s partner rather than just a vendor. Romanelli continues to expand TRIOSE’s logistics portfolio and is working to transform TRIOSE into a healthcare solutions company that uses a consultative approach to help improve clients’ bottom lines.
STEVE BEDA, Executive Vice President, Customer Solutions, Veraction
SHELLEY BELL, Manager, Industry Marketing, Yale Materials Handling Corporation
Bell’s supply chain experience has varied over the course of her career by working in marketing, sales and purchasing roles for everything from beverage trailers to lift trucks. Her diverse background has helped build a well-rounded, strategic and tactile understanding that makes it easier to affect change and advise customers. With disruptive shifts continuing to accelerate, Bell provides insights that consider the entire picture— not just one segment of the supply chain.
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2018
Practitioners to Know BRANDON MARUGG, Chief Technology Officer, ALOM
As the chief technology officer at ALOM, Marugg is responsible for the development and implementation of all ALOM supply chain management systems and worldwide IT infrastructure. Marugg has spearheaded the development of five proprietary ALOM supply chain management systems, each of which could become a commercially-marketed industry standard tool. One of his most recent achievements, Marugg was instrumental in developing the systems and infrastructure allowing ALOM to help a high-volume medical device (DNA ancestry testing kit) customer increase their year-over-year order volume by 1,000 percent. In addition, he has spoken at national industry conferences on supply chain technology trends and predictions.
LISA DOLAN, Vice President of Supply Chain Strategy, ALOM
During her 25 year career in supply chain and manufacturing management, Dolan has successfully transitioned from her initial career track writing code for programming manufacturing automation systems to a successful career developing and implementing end-to-end supply chain strategies. This past year, Dolan secured supply chain management contracts with Mercedes Benz and Tesla. Dolan is creatively and collaboratively finding the answers to make things happen. Her technical background gives her the ability to approach new supply chain projects from different perspectives, each with its own set of challenges and potentials. Dolan remains active in the supply chain professional community and has served in many volunteer leadership roles, as well as being active in many women’s diversity
organizations. She is a mentor to many women and is a sought after speaker and panelist at industry events where she is an advocate and supporter of STEM educational opportunities and programs for girls and women.
MIKE REIBSAMEN, Director, Integrated Supply Chain, Center of Excellence, Berry Global
Reibsamen brings his 18 years of experience as the director of integrated supply chain and center of excellence for Berry Global. He has a proven track record of designing, re-engineering and implementing logistics and supply chain management processes and systems that decrease costs, improve productivity and increase overall operational performance and profitability. Reibsamen is a change-agent with exceptional communication and is known for fostering a culture of trust and accountability with a focus on training and mentoring teams chartered to deliver exceptional results.
GORDON CONKLING, Lead Business Process Analyst, Welch’s Food Inc.
Conkling has the ability to review existing supply chain processes from the family farmer at the core of Welch’s to leveraging automation to maximize and expand supply chain operations. Conkling demonstrates leveraging current systems capabilities in unique ways to find cost effective and efficient ways to meet the changing and business needs of Welch’s family of farmers and customers. He is committed to a lower total cost of ownership by avoiding major capital project investment for a “new” solution, minimal data, shorter ramp ups and less training, delivering desired outcomes quickly.
SERGIO RETAMAL, CEO, Global4PL
Retamal offers 25 years of hands on experience with operational executive roles. He has worked at companies ranging from A-round with more than $1 million in revenues to public and $40 billion in revenues. Retamal has been an executive charter for the last 20 years, always leading teams to achieve cost reduction targets and improve operations for clients. Under his leadership, Global4PL has increased the IOR-EOR product servicing to over 125 countries. Retamal’s philosophy has been to expand to any market where clients need their
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presence so that they can be successful globally.
We deliver more than freight audit & payment. We deliver total transportation spend management & enable you to take control of your transportation spend across all modes. By combining best-in-class cloud technology, a global footprint & deep expertise, we help our customers realize savings, efficiency & visibility like never before. Are you in control?
We can help. Learn how at veraction.com
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PROS TO KNOW 2018
MORE PROVIDER PROS TO KNOW ❯❯ Edward Blinkick, 3rdwave
❯❯ Katie Kinraid, Blujay Solutions
❯❯ Hans Bleeker, Go99 Operations
❯❯ Hal Feuchtwanger, 4SIGHT Supply Chain Group
❯❯ Daniel Cullen, Breakthrough Fuel
❯❯ Bill Ryan, HighJump
❯❯ Scott Halvorson, 4SIGHT Supply Chain Group
❯❯ Eric Linxwiler, CBX Software ❯❯ Kelly Hahn, Censeo Consulting Group
❯❯ Anthony Nuzio, ICC Logistics Services Inc.
❯❯ Christy Fortin, Censeo Consulting Group
❯❯ Bill Leedale, IFS ❯❯ Matt Tweedy, InfinityQS
❯❯ Aram Mazmanian, Censeo Consulting Group
❯❯ Mike Cole, Inmar
❯❯ Ronald Keij, Ab Ovo ❯❯ Israel Ellis, AdvancePro Technologies ❯❯ Nathan Pieri, Amber Road ❯❯ Blake Shumate, American Global Logistics
❯❯ Bruce Bleikamp, Cimcorp Automation
❯❯ Jon Slangerup, American Global Logistics
❯❯ Adam Compain, ClearMetal
❯❯ Roch Gauthier, Aspen Technology Inc. ❯❯ Wade McDaniel, Avnet ❯❯ Don Zhao, Azoya International ❯❯ Ava Grove, Baxter Planning Systems ❯❯ Kris Anderson, Baxter Planning Systems ❯❯ Doug Leeby, Beeline
❯❯ Rick Trigatti, Cimcorp Automation ❯❯ Nathan Sandell, Cloud Logistics ❯❯ Scott Tesoiere, Cloud Logistics ❯❯ Chris Strickland, Command Alkon ❯❯ Monty Newport, Command Alkon ❯❯ Kevin Thuet, Commonwealth Supply Chain ❯❯ John Neblett, Commonwealth Supply Chain ❯❯ Don Savage, Commonwealth Supply Chain ❯❯ Dave Lindeen, Corcentric ❯❯ Barb Sexton, Corporate United ❯❯ Robert Mietus, Corporate United
DRIVING
VISIBILITY IN A WORLD OF COMPLEXITY An optimized supply chain doesn’t just happen. It is planned.
❯❯ Ara Arslanian, Corporate United ❯❯ Michael Farlekas, e2Open ❯❯ Steve Troncelliti, Elemica ❯❯ Armand Castro, Elemica ❯❯ Mark Walsh, Elemica ❯❯ Nate Rosier, enVista ❯❯ Monte Inman, ESM ❯❯ Evan Garber, EVS LLC ❯❯ Melonee Wise, Fetch Robotics
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❯❯ Jake Wojcik, Insight Sourcing Group ❯❯ Pushpinder Singh, Intrigo Systems Inc. ❯❯ Navajeevan Lekkala, Intrigo Systems Inc. ❯❯ Lee Kuhn, Invata Intraologistics ❯❯ Brandon Black, Ivanti ❯❯ W. Michael Jarrett, Jarrett Logistics ❯❯ Srini Muthusrinivasan, JDA Software ❯❯ Deskian Madhavanur, JDA Software ❯❯ James V. Kelly, JV Kelly Group Inc. ❯❯ Trevor Miles, Kinaxis ❯❯ Dan Clark, Kuebix ❯❯ Chris Schneider, Llamasoft ❯❯ Kevin Mooney, Llamasoft ❯❯ Bruce Welty, Locus Robotics ❯❯ Mark Sell, MD Logistics ❯❯ Marc Wulfraat, MWPVL International ❯❯ Natalee Scott, Neogrid ❯❯ Melissa Drew, Nitor Partners ❯❯ Miranda Vasquez, OnProcess Tech ❯❯ Curt Sardeson, Open Sky Group ❯❯ Landon Davies, Optricity
❯❯ Sam Mikles, Flash Global
❯❯ Nick McLean, OrderDynamics
❯❯ Don Jean, Focused Buyer LLC
❯❯ Doug Parker, Pace Harmon
❯❯ Matthew Elenjickal, FourKites
❯❯ Robert Sears, Pace Harmon ❯❯ Shyla Walson, Pace Harmon
❯❯ Matthew Brosious, FreightCenter Inc.
www.logility.com
❯❯ Doug VanWingerden, Insight Sourcing Group
❯❯ Wayne Clark, GEP ❯❯ Paul Feicht, Global Healthcare Exchange (GHX)
SUPPLY & DEMAND CHAIN EXECUTIVE | March 2018 | SDCExec.com
❯❯ Abnesha Raina, PlumSlice Laboratories ❯❯ Tom Flynn, PRGX Global ❯❯ John Weber, Protiviti ❯❯ Christopher Springer, QuestaWeb Inc.
PROS TO KNOW 2018
MORE PRACTITIONERS TO KNOW ❯❯ John Motley, LOG-NET
❯❯ Yates Parker, Railinc Corporation ❯❯ Shannon Vaillancourt, RateLinx ❯❯ Nate Endicott, RateLinx ❯❯ Frank Locascio, RateLinx ❯❯ Bryan Rabakon, RateLinx
❯❯ John DiPalo, Acsis Inc.
❯❯ Yogeshwar Suryawanshi, Finning International
❯❯ Nancy Matchey, Chainalytics
❯❯ Carolyn Glenn, Igloo
❯❯ Jeff Collins, Cascade Orthopedic Supply
❯❯ Kevin Mitchell, Hydro Extrusion North America
❯❯ Patrick Boyle, Chainalytics
❯❯ Matthia Wilrich, Lesara GmbH
❯❯ Patrick Bower, Combe Inc.
❯❯ Normal Brouillette, Ryder System Inc.
❯❯ Josh Morris, Comprehensive Logistics
❯❯ Hans Thalbauer, SAP ❯❯ Aarathi Vidyasagar, SAP Ariba
❯❯ Ryan McFarland, Costa Farms
❯❯ Robert Steinberg, SAP Ariba
❯❯ Steven Schuman, Dg3
❯❯ Keith Baranowski, SAP Ariba
❯❯ Noah Williams, Family Leisure
❯❯ Dan Gorsky, SCA Technologies ❯❯ Jeff Christensen, Seegrid
TEAMS TO KNOW
❯❯ Jeremy Bodenhamer, ShipHawk ❯❯ Sean Riley, Software AG ❯❯ Jonathan Groda, Source One
❯❯ Michael Field, The Raymond Corporation
❯❯ David King, Warehouse Design Inc.
❯❯ Holman Parts
❯❯ Tippmann Innovation
❯❯ Casestack
❯❯ ICC Logistics
❯❯ Megan Connell, Source One
❯❯ Scott Schwalbe, NimbeLink
❯❯ Tractor Supply Co. ❯❯ BAE Systems
❯❯ Kenneth Ballar, Source One
❯❯ Kunal Thakkar, Newegg
❯❯ CT Logistics
❯❯ Dawn Tiura, Sourcing Industry Group ❯❯ Geoff Talbot, Sourcing Industry Group ❯❯ Rebecca Karp, Sourcing Synergies ❯❯ Melissa Runge, Spend Management Experts ❯❯ John Haber, Spend Management Experts ❯❯ Mark Usher, SpendWorx LLC ❯❯ Nick Hamm, Spinnaker ❯❯ Brad Murach, Spinnaker ❯❯ Patrick Buellet, Symphony Retail Ai ❯❯ Tony Dobson, Synergy NA Inc. (Snapfulfil) ❯❯ Roger Blumberg, Synertrade ❯❯ Joey Benadretti, SYSPRO USA ❯❯ Anand Ponnuswamy, Tata Consulting Services ❯❯ Doug Niemeyer, TEKLYNX Americas ❯❯ Anne Kohler, The Mpower Group ❯❯ Jim Kandilas, The Shelby Group ❯❯ Omer Abdullah, The Smart Cube ❯❯ Denny McKnight, Tompkins International ❯❯ Drew McElroy, Transfix ❯❯ Craig Moberg, UNEX Manufacturing Inc.
If you really want your business to run faster and better, while maximizing revenues at a lower cost, you need supply chain planning software that lets you get there.
❯❯ Vikrant Angie, VCO LLC ❯❯ Trevor Blumenau, Voodoo Robotics ❯❯ Wolfram von Schoen, Westfalia Technologies Inc. ❯❯ Mark Wheeler, Zebra Technologies
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SPECIAL REPORT THE INTERNET OF THINGS
By Jeff Butler
IMPROVING SUPPLY CHAIN VISIBILITY
WITH MACHINE LEARNING
Machine learning can uncover layers of imperfect IoT data, leading to powerful insights to maximize efficient supply chain operations.
W
hile implementing Internet of Things (IoT) technology into a supply chain can yield extremely powerful insights, it is not without its challenges. The constant stream of data from hundreds or even thousands of sources must be accurately captured and analyzed. Further, the same word of caution commonly uttered by investment professionals, that past performance will not guarantee future results, is also applicable for supply chain operations. Simply capturing and looking backwards at data to try to act on the results is not good enough, nor is it sustainable or the best use of planning time. A supply chain planning and optimization solution needs to be capable of delivering robust planning that also analyzes IoT data for predictive and prescriptive analytics. Once it’s decided how to handle the available data, consider the data quality issues that could arise. At the 32
same time, don’t wait for IoT data to be perfect. Doing so can prevent the supply management team from moving forward. This highlights the importance of being prepared to manage fuzzy or imperfect data.
DATA, PIECE BY PIECE Integrating IoT into the supply chain can also change how data is examined and understood. In the past, practitioners would typically develop a theory and set out to acquire data in an attempt to validate it. They would look at the data expecting to find a certain link and use the data gathered from IoT to confirm their hypothesis. Once proven, they would move forward with planning based on the validated assumptions. A new way to look at data is that every piece has value and should be proactively utilized, rather than be available for reactive analysis. If practitioners embrace as much data as they can gather through IoT, it provides more opportunities to utilize
machine learning algorithms in order to proactively mine data for insights. The algorithms may highlight a relationship between pieces of data that were not previously connected. Modern computers running machine learning algorithms have the capacity to consider and test millions of possibilities that the human brain could never consider in fractions of a second. Ultimately, today’s supply chain professionals are still the gatekeepers for validating assumptions, but they need to be open to new ways of working to allow the proactive analysis and output of machine learning algorithms to fully maximize efficient supply chain operations. The ability to take in this much data from the supply chain allows practitioners to widen their perspective. In general, there is quite a bit about interconnectivity of supply chain processes that we don’t understand or have not connected because we haven’t had the data or ability to do that.
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SPECIAL REPORT THE INTERNET OF THINGS
UNDERSTAND YOUR DATA FOR BETTER RESULTS
Bottlenecks in interconnected supply chain operations can be both difficult to identify and mitigate with planning changes. Reinforcement learning algorithms are perfectly suited to assist in both of these difficult tasks when provided the correct data. For many supply chain puzzles, IoT data affords the opportunity to run multiple types of machine learning algorithms. For example, practitioners may run an unsupervised algorithm as a preprocessing step to a supervised algorithm. In this case, the unsupervised learning algorithm can identify outliers quickly through clustering techniques and assign them a lower weighting so they do not
Before determining that machine learning is a magic bullet for solving a supply chain puzzle, there needs to be some understanding of the data you’re working with in order to know what machine learning approach to take. Typically, there are three major categories of machine learning algorithms that are important to consider in supply chain planning. ❯❯ Supervised learning algorithm. In this case, practitioners would have data with known inputs and known outputs and use a supervised learning algorithm to determine the relationship between them and extract it to apply toward future planning. ❯❯ Unsupervised learning algorithm. This is used for data that is unlabeled, meaning there is some uncertainty surrounding what the data represents. Supply chain practitioners would use this algorithm to find hidden relationships in the data to highlight new patterns. This allows practitioners to take in as much data as possible and have the unsupervised learning algorithm organize it in a more meaningful way. A good example would be attempting to solve a 1,000-piece puzzle where every puzzle piece was colored black. This would be a very difficult puzzle to solve manually but unsupervised learning algorithms could determine what pieces are interconnected. ❯❯ Reinforcement learning algorithm. These types of algorithms were designed to optimize decisions where feedback is not provided immediately, but only at a future point in time.
WITH IOT, IT DOESN’T REQUIRE AN UNDERSTANDING OF ALL OF THE DATA COLLECTED BECAUSE THE ALGORITHMS WILL ASSIST IN DETERMINING WHAT IS IMPORTANT AND WHAT IS NOT. influence the outcome as much as other data points. Unsupervised learning algorithms can also remove variables, and their associated noise, that do not influence the outcomes at all through dimensionality reduction techniques. After unsupervised learning runs, the amount of fuzzy or imperfect data is greatly reduced and higher quality data can be passed to a supervised learning algorithm for a higher quality result. Navigating through data noise and improving data quality becomes more difficult when you have two pieces of data with all of the same inputs but different outputs. In this case, practitioners would need to determine the interaction with other data points that could have influenced a different
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outcome from the same inputs. The more complex results require a good understanding of machine learning algorithms and that they work with a strong, flexible solution. Imagine that the production plan is exactly the same on Monday and Tuesday, but Tuesday’s production is late. There are relationships that can cause this that we cannot understand without using machine learning data to reveal the relationship so we can better understand how to structure our planning and avoid delays. For example, with the production of industrial gases, the temperature of the surrounding environment has a dramatic impact on production levels. Therefore, the time of day, equipment and process can all be the same, but a minor change in external temperature will cause a variation in production levels. With IoT, it doesn’t require an understanding of all of the data collected because the algorithms will assist in determining what is important and what is not. Going back to the example of industrial gas production, practitioners will learn what influences production, whether it is the time of day, temperature or even what was in the tank prior to this production. IoT is very powerful, and layering machine learning algorithms to build complex layers of data enables practitioners to dig in and figure out what has happened and why, leading to a continuous improvement in planning. ABOUT THE AUTHOR JEFF BUTLER is the product manager of Quintiq’s Logistics Solution, and is a technologist who aims to contribute to socially impactful projects. His passion for numbers, analytical problem solving and technology has steered him into a diverse array of career opportunities, spanning industries from finance and professional sports, to supply chain.
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SPECIAL REPORT PROCUREMENT
By Amy Wunderlin
PROCUREMENT
GETS SMART
How AI-enabled procurement can lead to better business decisions.
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rocurement could be the innovate new business models and last link in the supply collaborative relationships. chain to be disrupted by Basic machine learning technology technology, but we may is already used by some procurement begin to see that change in 2018. applications in areas such as spend Artificial intelligence (AI), or analytics and contract analytics, machine learning, has been a major automating the processes of collecting, buzzword across the supply chain over cleaning, classifying and analyzing the last few years. Its effects thus far expenditure data in an organization have been mostly speculative, to identify savings or paths but its potential to transform to greater efficiency. But the decision-making according to a recent process using highly report published accurate digital by the analyst firm data is increasingly Gartner, AI-enabled appealing to the procurement Gartner analysts speculate that procurement processes will take BY 2022, 50% OF ALL department. on a larger role in LEGACY SPEND-ANALYSIS AI-enabled SOFTWARE WILL BE RETIRED, the supply chain procurement over the next five replaced by AI-powered, cloud-based solutions. is focused on years. In “Predicts business outcomes and user experience. 2018: Procurement and Sourcing It enables cost efficiencies through the Technology Will Benefit From Advances automation of repeatable tasks, delivers in AI, Data Visualization and B2B real-time insights to help businesses Marketplaces,” Gartner analysts Patrick make better decisions, and deploys new M. Connaughton, Magnus Bergfors, and smarter ways to infuse data models Desere Edwards and Kaitlynne N. to enrich day-to-day operations. Sommers speculate that by 2022, 50 What’s more, it can provide a better percent of all legacy spend-analysis way to build new relationships with software will be retired, and replaced by suppliers and other third parties to AI-powered, cloud-based solutions.
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SPECIAL REPORT PROCUREMENT
The report also predicts the biggest buying experience or whether they’re upstream into what the software changes to the procurement function evaluating suppliers on the front company calls strategic procurement, over the next five years will be the end. (Chatbots are) making that or the supplier management and integration of virtual assistants and much faster and making it easier for contracting areas. chatbots into online procure-to-pay (employees) to evaluate a large number “As we move into direct procurement marketplaces. VEAs and chatbots of variables and great volumes of and as supply chains become more are computer programs that simulate information that may be coming from complex and risky, procurement a conversation with a human being. third-party sources. You simplify that, organizations are focusing more on VEAs work on behalf of enterprises to deliver the recommendations, and the managing suppliers and properly support employee engagement with, evaluator is making more intelligent qualifying them,” D’ Addario explains. for example, the procurement process. decisions faster.” “This includes making sure they have Chatbots have a narrower the right business attributes, functionality and are financial stability; that “As we move into direct procurement and like often highly specialized. they have compliance with These AI features, as supply chains become more complex any regulatory standards Gartner says, will help that are required, for and risky, procurement organizations are example, handling hazardous guide end users through the buying process, while materials; that they have focusing more on managing suppliers a VEA will use a series the proper insurance and properly qualifying them. ” of simple questions to certifications; and that they help determine the best monitor them on an ongoing — JIM D’ ADDARIO, ORACLE buying channel and basis to make sure that they payment method for the employee. BROKEN PROMISES are being held to their contractual Chatbots will be used to handle Legacy spend-analysis software at obligations.” common supplier requests, such as one point offered a solution to simplify To ensure a company has dedicated answering questions about the status of the procurement function—but it the necessary resources to these a payment or helping to resolve invoice has failed to deliver on its promise. more complex areas of procurement, discrepancies. According to Gartner, the current D’ Addario says companies should For Oracle, introducing AI into spend-analysis process is time“automate as much as possible, so they the procurement function is all about consuming and error-prone, and as a can divert their resources into the simplifying the user interaction of result, procurement managers are not strategic end.” applications. They are seeing the use able to make quick decisions in the Another reason many procurement of chatbots as a way to simplify the face of changing market conditions. departments may shy away from human interaction, where employees Supply chains continue to grow investing in technology is due to the do not have to crunch the numbers. more complex, so it only seems major upfront costs associated with “Where we really focus is on natural that their software programs their current software. Ryan Duguid, simplifying the user experience. It’s follow suit. One of the reasons that vice president of technology strategy about the application of having greater procurement has lagged behind the rest at Nintex, says the introduction of the usability,” says Jim D’ Addario, Oracle’s in adoption of advanced technologies, cloud, however, has trimmed down director of product marketing. “The D’ Addario says, “is because a lot of much of that expense. use of bots and bringing in big data procurement functions focus on the “Technology in this space used to and these intelligent applications really transactional and procurative pay, be in the realms of very bespoke, very simplifies the human interaction where which is really the requisition cycle and expensive, lots of consultants, lots they’re not having to crunch all the future payment.” of hardware involved in it,” explains data, and the applications themselves That said, D’ Addario notes that Duguid. “As a result, you had a massive are delivering recommendations many of the procurement organizations upfront cost, you had to play out the to the employee—whether it be a Oracle works with are moving ROI over five, 10 years. Because of
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SPECIAL REPORT PROCUREMENT that, your systems get very dated, as enabling employees to make better SAP Ariba’s Vice President of AI well as the user interface, the hardware decisions and focus on more complex and Cognitive Products Shivani Govil it runs on; you’re stuck back in late tasks. further drives home the give and take 90s, early 2000s-type approach to Much like Oracle’s approach, relationship between the human brain technology. Duguid says for him and Nintex the and machine learning, noting that AI “The big thing is that all of this focus on AI- and machine learningis very relevant in helping people both now is in the cloud; it’s all managed type technologies is to work out how do their jobs better, but also be more by someone else. Ninety-percent of to enhance the power of the individual. efficient by automating tasks, reducing the cost of running these types of “People are extremely valuable; errors and helping them to discover systems disappears,” he says, adding, they process information and hidden insights. “AI is not a thing you want to ignore, make decisions in very unique and “You’re always going to need you don’t want to be the curmudgeon interesting ways that as a society we humans,” she says. “What these that says, ‘One day when it’s finally at barely understand,” he says. “The technologies are going to do is make maturity, I’ll think about it.’ Because human brain is processing billions them less tactical and more strategic. then you’ll be left behind. You have to and billions of data points nonstop— Instead of being the guy that just buys have a forward-looking mindset with whether you’re awake or you’re stuff for me, he’s going to be able to IT. Focus on the areas where you can asleep—and most decisions are made focus on other more important things get the biggest wins. Get out of the as a result of the whole set of those like finding the right supplier who business of running could develop a product in your own data centers, a more innovative way. So, “You’re always going to need humans. your own servers; get I think it’s actually going to out of the business What these technologies are going to do is signal a shift and a good one of highly customized for procurement.” make them less tactical and more strategic.” In fact, Govil suggests software. Look at low-code, no-code within the next five years — SHIVANI GOVIL, SAP ARIBA platforms; look at AI will be part of every empowering more people to automate data points. You’d never be able to application, rooted in every way we more problems, and do it on someone explain to someone that concept of do business. Employees will expect else’s cloud. That’s really how I think intuition or gut feeling. It’s actually the technology to be part of their job, people need to be looking at the just a data-driven decision based on a providing guidance on what they need technology landscape right now.” whole bunch of life experiences you’ve to do next or what task to prioritize. had, and that’s extremely powerful.” “People are going to expect a lot A MARRIAGE OF CAPABILITIES AI is essentially trying to simulate of the mundane and repetitious tasks As procurement teams start to adopt that approach—but at a quicker pace to happen automatically, so they AI-enabled technologies such as virtual and with greater accuracy. can be more strategic in terms of assistants and chatbots, purchases will “So there are cases where we can thinking about how to get the best be automated and streamlined. As a say, ‘Look, you don’t really need a results,” she says, adding: “There’s result, constantly updated streams of person involved in this.’ But there are a huge opportunity with some of raw data will become available that plenty of cases where someone’s got to these innovations to really help offer a new way to generate insights step back, they’ve got to lay their eyes procurement professionals and supply and alert leaders to opportunities. on a situation, they’ve got to consult chain professionals do their job better. Unfortunately, the average human brain with other people, and those are the I’m seeing that as people get more can’t process this data quickly enough cases where the power of AI machine comfortable with (technology), they to take advantage, while algorithms learning is to provide suggestions or start to embrace it, leading to better crunching the numbers can pick up on recommendations to that person to help results and better performance for opportunities people would miss. enhance their own cognitive faculties. themselves as individual workers, but This doesn’t mean to say AI will “My view is if you marry those also for their business and what they’re replace the human mind, however. In capabilities, you get the best of both trying to do for their company.” fact, it will only further empower it, worlds,” he adds. 36
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SPECIAL REPORT BLOCKCHAIN
By Lara L. Sowinski
BLOCKCHAIN BY THE
BOATLOAD From ocean carriers to retailers, a growing number of pilot tests are demonstrating the value of blockchain technology in the supply chain.
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hile the potential opportunities for blockchain are still unknown, several pilot tests are giving us an idea of how it will likely manifest in the supply chain. Given its massive implications, the joint venture between Maersk Line and IBM, announced in January, understandably dominates the current conversation about blockchain in the shipping sector. Specifically, the two partners are developing a global trade digitization platform built on open standards and intended for use by the entire global shipping ecosystem— manufacturers, ocean carriers, freight forwarders, port and terminal operators, customs authorities, and even the end consumer. It’s an ambitious goal, and the payoff is significant. Considering that more than $4 trillion in goods are shipped annually, and more than 80 percent of the goods consumers use daily are carried by the ocean shipping industry, there’s ample room to streamline the trade documentation processes, and time-intensive and costly administration processes both. DuPont, Dow Chemical, Tetra Pak, Port Houston, U.S. Customs and Border Protection, and the Customs Administration of the Netherlands have already tried out the blockchain platform, while General Motors, Procter and Gamble, and Agility Logistics are among those that have expressed interest in conducting their own pilot tests of the platform,
according to Maersk Line. The joint venture plans to commercialize two core capabilities aimed at digitizing the global supply chain end-to-end, explained Maersk Line in a news release. One, a shipping information pipeline will provide end-to-end supply chain visibility to enable all supply chain stakeholders to securely and seamlessly exchange information about shipment events in real time. Secondly, a “paperless trade” will digitize and automate paperwork filings by allowing end users to securely submit, validate and approve documents across organizational boundaries, ultimately helping to reduce the time and cost for clearance and cargo movement. Finally, blockchain-based smart contracts will ensure all required approvals are in place, helping to speed up approvals and reduce mistakes. Once the Maersk Line/IBM joint venture receives regulatory clearance, the platform will be made available— most likely before summer. Other ocean carriers are launching blockchain pilot tests of their own. Late last year, Israeli shipping line ZIM conducted a blockchain document exchange pilot for paperless bills of lading. The pilot was completed
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Blockchain by the
numbers Global spending on blockchain solutions is estimated to reach
$2.1
BILLION in 2018, more than twice the $945 million spent in 2017.
THESE BOOTS WERE MADE FOR BLOCKCHAIN
in cooperation with Sparx Logistics and Wave Ltd. Commenting on the pilot test, which is the first of its kind, ZIM states that, “An electronic substitute to the traditional Negotiable Ocean Bill of Lading has been the industry’s Holy Grail for many years.” During the pilot test, all participants issued, transferred and received original electronic documents using the Wave Application. The containers, shipped by Sparx Logistics from China to Canada, were delivered to the consignees “without a hitch,” notes ZIM. The new blockchain-based system developed by Wave uses distributed ledger technology to ensure that all parties can issue, transfer, endorse and manage shipping- and traderelated documents through a secure decentralized network, ZIM adds. The application is free for shippers, importers and traders, and requires no IT operational changes. For its part, France’s CMA CGM Group announced earlier this year that it too was investing in the digitization of the supply chain with the creation of Ze Box, an international startup incubator, based in Marseilles, that will launch in June.
L.L. Bean, the 106-year-old retailer based in Freeport, Maine, is also joining the blockchain bandwagon. In February, The Wall Street Journal reported that the retailer, famous for its Maine Hunting Shoe, is teaming up with Loomia, a Brooklyn-based technology company that makes flexible circuitry, to embed sensors in a line of boots and coats to better understand how customers use its outdoor gear. A small hardware device that uses near-field communications signals will collect data from the circuits while the customers are wearing the boots and coats. L.L. Bean is also building a data tracking and analytics system to use customer data stored on Ethereum, an open-source, public blockchain platform. An innovation specialist with the retailer says information such as temperature, frequency of wear and number of washes will help L.L. Bean determine if its products are living up to expectations and performance levels. “Digital, quantifiable data about how customers are actually using a product—we’ve never had that data before,” the innovation specialist told The Wall Street Journal.
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WESTERN EUROPE will be the next largest region for blockchain spending, followed by China and Asia-Pacific (not including Japan and China).
The United States will see the largest blockchain investments and deliver more than
40%
of worldwide spending during period from 2016-2021. In the United States, the distribution and services sector will attract the largest blockchain investments. From a technology perspective, IT services and business services combined will account for roughly
75%
of all blockchain spending throughout the forecast period (2016-2021) with spending fairly well balanced across the two categories. Overall, blockchain spending will be led by the financial sector ($754 million in 2018), driven largely by rapid adoption in the banking industry. Source: International Data Corporation (IDC), www.idc.com
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SPECIAL REPORT RISK MANAGEMENT
By Lara L. Sowinski
WHERE DOES THE
RISK LIE? EventWatch and Resilinc partner on an annual supply chain report that holds clues for 2018.
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SPECIAL REPORT RISK MANAGEMENT
T
he EventWatch 2017 Annual Report, authored by Shahzaib Khan and Andrew Perez, analyzes extensive supply chain information gathered by the firm’s 24/7 global event monitoring, alert, and analysis service. Integral to the comprehensive report is Resilinc’s supplier repository, which includes risk information associated with more than 85,000 supplier sites, representing over 2 million parts. Natural disasters and weather-related events proved to be considerable sources of disruption across the globe, especially in the United States, according to EventWatch. For example, Hurricanes Harvey, Irma and Maria contributed to a significant development in 2017— North America became the most disrupted region in terms of naturally occurring events.
Meanwhile, 2017 saw its share of considerably disruptive events, such as the aforementioned hurricanes, and the financial troubles of major electronics manufacturer Toshiba. While mitigating against these “black swan” events is crucial, research continues to reiterate the importance of preparing for smaller, more frequent disruptions that could have a larger impact on business revenue and day-to-day operations. Therefore, a dynamic supply chain risk management program in 2018 should focus its visibility on larger-scale events, such as storms and other natural disasters, as well as events that occur on a daily basis like site-level disruptions. After reviewing the various disruptive occurrences that took place this past year, Resilinc has compiled a list of five ongoing events to carefully monitor in 2018. Following are highlights of the report.
EVENTWATCH BULLETINS BY EVENT TYPE 2016-2017
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SPECIAL REPORT RISK MANAGEMENT ❯❯ Geopolitical developments in North Korea: The supply chain community would be well served in keeping a keen eye on geopolitical developments in North Korea. The situation appears to be volatile and potentially disruptive to the global supply chain network given the nation’s proximity to China, South Korea, Japan and the United States, both geographically and politically. ❯❯ China’s response to pollution and its impact to manufacturing: China’s efforts to curtail pollution gave supply chain professionals much to contemplate in 2017. Throughout the country, factories were shuttered to help reduce hazardous levels of smog. As pollution is not an easily solved problem in the short-term, factory shutdowns and manufacturing limitations may be further utilized by China in 2018. ❯❯ Cyber-attacks and cybersecurity: Cyber-attacks, particularly of the ransomware variety, and issues of cybersecurity made headlines throughout 2017. Cybersecurity should be
of the utmost concern to supply chain professionals in 2018. ❯❯ NAND flash chip supply shortages: In 2017, reports surfaced of temporarily halted production at Toshiba facilities in Japan leading to strained supplies of NAND flash chips globally. As global supplies of NAND flash chips are highly reactive to changes in production, persistent monitoring will be necessary in 2018. ❯❯ Increased volatility of storms and natural disasters: With billions of dollars in damages incurred due to natural disasters in the United States, the spotlight has turned again to climate change and its role in the increased volatility of storms. In 2018, stronger storms should be expected and should be mitigated against as well as possible. Pertinent climate change/weather data should also be used in decisionmaking when available.
DISRUPTORS Factory fires and explosions represent the most common disruption observed in 2017, up from the second
EVENTWATCH BULLETINS BY INDUSTRY 2016-2017
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SPECIAL REPORT RISK MANAGEMENT EVENT MAP BY GEOGRAPHY 2017
position the year prior. Merger and acquisition represents the second most common disruption observed, dropping from its first position in 2017. While most supply chain professionals are likely to have their eye on the more common disruptions represented in the report’s top 10 (see page 41), a number of less common disruptions all registered increases in 2017 from the year prior. These include EMA/FDA/ OSHA action, geopolitical/terrorism, regulatory change, mine shutdown/ explosion, environmental hazard, cyber-attack, forest fire, company split and volcano. Last year, the automotive industry was the most disrupted industry as it experienced an increase of 395 bulletins published. All industries observed increases of around 300 bulletins or greater in 2017. Most supply chain professionals would consider Asia to be the region most disrupted by natural disasters due to its inherent vulnerability to typhoons and earthquakes. This trend was corroborated in 2016’s EventWatch Annual Report, as Asia was the most disrupted region by natural disasters. However, in 2017, due to particularly disruptive storms and extensive forest
fires, North America was significantly impacted by naturally occurring disruptions, and for the first time, North America was the most disrupted region by natural disasters.
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FEATURE
By Greg Kefer
Supply Chain Information Networks— Digital supply chain transformation is becoming a mission critical path for most companies, but requires data insight.
W
hen the internet started to become the backbone of business software deployments 20 years ago, the supply chain seemed poised to benefit more than any other technology category. It finally had a ubiquitous network that was being adopted by every person and business on the planet. With supply chains being highly reliant on orchestrating processes with partners around the world, could the challenges of information sharing, collaboration and visibility finally be solved once and for all, in the cloud? Business software systems quickly adopted the cloud as a deployment method. The idea of accessing software as a service, using a web browser, changed the entire software paradigm. It gave buyers more power, and it lowered the barriers to entry for smaller companies that couldn’t afford the big, complex software systems that were running at enterprises. Countless software companies emerged that were focused on delivering pure, cloud-native solutions, and the big software firms eventually followed suit. How many times have we heard the term “data is the new oil?” Regardless of the way technology gets deployed, it’s still highly dependent on data to fuel the software applications. In functional areas where the data comes from sources largely within a company’s sphere of control, cloud rapidly displaced software as the preferred deployment method. But in supply chain, there’s a network dimension to any technology effort that cannot be overlooked. That’s because more than 80 percent of the data needed to effectively run a supply chain comes from external partners, which are different companies scattered around the world. 44
NETWORKS ARE NOT CREATED EQUAL Information networks are not a new thing. There are countless companies that provide networks and associated capabilities. Many of these services are focused heavily on supply chain, providing connections between thousands of companies. Lots of supply chain data flows through these networks, yet companies still struggle to coordinate and translate that data so different systems understand it—and so the vast partner communities all operate with a common information language. One of the main reasons that companies have struggled with their network strategies was that all of the data normalization took place at various nodes at the edge of the network. When social media platforms hit the scene, their success was based on shifting the data records from the edge nodes to the center of the network. Suddenly, a single profile page could be updated constantly and serve as the master record of one’s social status. That master page would then be accessed by other network members. Users only had to worry about their own profile, yet every member of the network had full visibility and connectedness to as many friends with whom they wanted to connect. Now, imagine the implications for supply chain managers using a LinkedIn-like information model. Instead of shuttling petabytes of data files around a network of potentially thousands of partners and their systems, all the data is posted to the center of the network for all to see and use. If the status of
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an order or shipment changes, the “object profile” is updated, and anyone who has permission to see that change gets the update. In a world as complex as global supply chain management, this is the only way to get partners in sync and applications functioning at scale.
CRITICAL MASS IS KEY The vision of a business network that mirrors the way social networks are designed is not a new thing. The minute Facebook surpassed 500 million users, the business-to-business software companies raced to find a way to develop a similar network design to support their respective solutions. And in many cases, there were some very viable networks that were introduced. However, a “build it and they will come” approach does not always result in actual network adoption and growth. Even the best designed, most functionally rich network on the planet is nothing without a critical mass of stakeholders and participants. What would Facebook, or LinkedIn, or Snapchat be if you couldn’t find friends and colleagues? It’s not enough to open a network and expect the masses to come and set up shop, especially when it comes to supply chain partners who are likely being asked (or pressured) by their customers to join networks of all sizes and shapes. Networks take time to achieve critical mass in business-to-business environments. There are so many offerings, focused on such a broad range of functional areas, it’s easy to see how IT leaders would be confused about how to best address their thirst for data. Do they build their own networks, or pay to join an existing third-party network? Networks that combine the right architectural model with a robust community present a
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fast path to operational status. It’s likely that companies will find many of their partners already connected and supporting their own customers. And, importantly, an existing, humming supply chain network will have a data quality program already in place, designed to address the difficult task of translating and normalizing data— something that’s only going to get harder as more IoT devices come online.
DIGITAL TRANSFORMATION ENABLEMENT Supply chain networks that are focused on connecting suppliers, logistics providers, financial services, factories, warehouses, agents and even different divisions within the same company, are a foundational requirement if any company is going to embark on a digital transformation initiative. This network also needs to connect various enterprise systems, such as enterprise resource planning (ERP) systems, which can date back years or decades. At the core of anything digital is data, but “ones” and “zeros” don’t equal insight. Most supply chain innovations will still require a network strategy. Even blockchain, the white-hot innovation theme of 2018, will require a network to actually work because the public ledgers we often hear about are too slow and power-hungry to run at scale. Digital supply chain transformation is becoming a mission critical path for most companies. Amazon is forcing everyone to rethink the way it makes and delivers products. “Ones” and “zeros” will help, but for true transformation to actually begin, data must be converted into insight. A network won’t provide all the answers, but the right kind of network will make the difference between more of the same, versus actually doing something differently and better. ABOUT THE AUTHOR GREG KEFER currently serves as VP of corporate marketing at Infor, supporting a business unit focused on global supply chains and commerce automation for large enterprises. Previously, Greg was VP of corporate marketing at GT Nexus, a cloud supply chain platform provider, where he led all marketing and communications functions as the company grew from startup stage through a successful $700 million acquisition event. SDCExec.com | March 2018 | SUPPLY & DEMAND CHAIN EXECUTIVE
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FEATURE
By SDCE Editorial Staff
Trends in COOPERATIVE PURCHASING fo A discussion with Tammy Rimes, executive director for National Cooperative Procurement Partners
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ooperative purchasing—defined broadly as multiple agencies or government buyers making purchases off of a single contract—continues to attract attention as one of the fastest growing or most dynamic parts of the procurement landscape. An ONVIA 2018 Forecast report found that cooperative methods of purchasing have risen from 12 percent of all procurement spend in 2011 to 18 percent to 20 percent in 2017. Its strong growth and higher awareness as an accepted buying option has led some to wonder if we are at a kind of “tipping point” or transition from an “emerging” phase into more of a “mature” phase in this trend.
TRACKING THE MATURING CO-OP TREND Given the broad usage of co-ops within cooperative purchasing, we asked Tammy Rimes,
executive director for National Cooperative Procurement Partners, to share her views on whether this trend was still “emerging” for these local and national organizations or is in fact becoming “mature.” She explained that, “Adoption of the concept and use of cooperatives has become more of the ‘norm’ in recent years.” She added that as part of this maturing process, co-ops have expanded to cover more types of purchases than ever before, helping reduce barriers to use. “Where cooperatives had once been primarily used for commodities—such as office and maintenance supplies or auto parts, they are now becoming more service and construction oriented. For example, their offerings may include services (i.e., landscaping or janitorial); an installation component (new gym floor or HVAC installation); or job order contracting for repetitive small construction or repair projects,” said Rimes. An ONVIA 2017 government procurement survey stated that nearly 40 percent of agency buyers and procurement staff are overworked and their No. 1 specific challenge was “pre-bid research
ANALY
• How lon
• Does Yo • Does th anothe • Was th • What p evalu • Has t
BEFORE YOU GET STARTED — YOUR AGENCY • Identify and understand your customer’s needs. Know where you are going! • Do you understand your legal authority to use cooperative agreements? • Is your Legal Counsel familiar with the concept of cooperative purchasing? • Has your agency successfully utilized cooperative purchasing in the past? • Does your Board or Council have to approve the use of a cooperative, as in a pre-approved list? • Have you considered diversity participation? Local preference? Social Goals? Political landscape?
Y ERVICES LIV& SER DOFEGOODS
ROADMAP TO
A Cooperative Procurement Strategy THE CONTRACT
BAKE OFF!
Compare contracts side-by-side. Multiple contracts for the same product? Bake them off!
• Does the awarded contract contain the specific solution you require? • When was the contract awarded, and when does it expire? • What are the qualifications, capabilities and financial health of the awarded supplier? • Do they have the capacity to fulfill your Agency’s needs? • Can you obtain a copy of all applicable contract documents?
ARE WE THERE YET? CHECK IT OFF YOUR LIST • Legally okay? • Cooperative checks out? • Contract – valid vehicle? • Supplier – Thumbs up? • Advantageous Pricing? Best Value for Agency?
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• How is pricing addressed? Is it actual, percentage discount from list, or ceiling based pricing? • Can the terms and conditions of the contract be amended to meet the needs of your Agency? Indemnity clause? • How is contract use monitored? Are usage reports available? • Is there a rebate on the contract? How is that paid? Can it be credited against the contract pricing? • Does the cooperative have a process for vendor issues or disputes?
SUPPLY & DEMAND CHAIN EXECUTIVE | March 2018 | SDCExec.com
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audi • Wha
conc • Doe
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G for 2018 and planning.” This desire to free up staff time by reducing the need to put out time-consuming new competitive bids has had a profound impact on buying strategies and practices. According to Rimes, “Procurement professionals are becoming more strategic. They are proactively determining if it really requires that their agency conduct the bid process, or if the solicitation can be completed by another agency or cooperative, so they can quickly garner commodities and services for their customer departments. It often makes better sense—both in time and value—to use an already solicited cooperative contract.” One of the other key benefits to purchasing from a cooperative contract is to let agencies select from among the very newest technologies—which may not have been available if they were limited to ordering only from a single vendor on a long-term contract. Rimes noted that, “Some cooperatives have a wide range of options that allow for new technologies and interoperability. For instance, if an agency goes out to bid for a certain brand of computers and ANALYSIS AND EVALUATION OF COOPERATIVE ORGANIZATION • How long has this cooperative organization been operating? • Does Your Agency have to register as a Member to use the contracts? Is there a fee? • Does the cooperative conduct its own procurement process or use another agency as the lead? • Was the solicitation advertised – where and how? • What procurement laws does the cooperative follow in soliciting, evaluating and awarding contracts? • Has that lead agency or the cooperative received any 3rd party audits, peer review or achieved awards for their contracting process? • What is the level of customer service in response to questions, concerns or requests for information? • Does their website contain accessible and thorough documentation? • Is contact information provided to readily conduct more in-depth research?” • Is the cooperative a member of any national cooperative association that has high ethical values and standards for its members?
om
eet
utes?
EGIC STRAT ING PLANN EY K
For leveraging your team’s best talents and time, does it make sense to take a percentage of your Agency’s annual expiring contracts or bids – particularly for the mundane and routine – and research cooperatives that might fill the need instead?
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software, and then awards that contract for a 3- to 5-year term, it may limit their ability to take advantage of new technology. If a cooperative offers several IT vendors or pieces of equipment with upgrades, it may provide a greater capability to purchase new software that wouldn’t have been included in a more structured and limited longterm contract.”
PROFITING FROM THE CO-OP TREND: ADVICE FOR CONTRACTORS
KEY BENEFITS OF COOPERATIVE PROCUREMENT Becoming a well-accepted purchasing tool, rather than an “emerging” or experimental buying method. Can be used to purchase commodities, services or small construction repairs. Drives savings in staff time and monetary savings by leveraging spend across a greater volume of spend. Offers better access to the latest technology versus a long-term contract with a single vendor.
We asked Rimes to share her advice for vendors Provides a great opportunity to interested in working with a companies to maximize revenue while minimizing their costs co-op. She recommends that to respond to multiple bid companies first appreciate the opportunities. strategic benefits in terms of marketing efficiency. “Being awarded a cooperative contract does save a company time and resources from having to research and submit proposals in response to multiple bids and RFP’s across the country. Cooperatives can be a great resource, and they can be seen as an additional marketing arm for your company and its contracts,” she said. Rimes emphasized that the ability to successfully and profitably fulfill a cooperative contract requires that the bidder does their homework and factors in issues of capacity and flexibility. “When a supplier decides to submit a proposal response for a cooperative contract, they need to be fully aware of and able to rise to the challenge and expectations of having many different customers across the defined region. This includes providing customer service, deliveries, uniform pricing, invoicing and support. If a contract becomes highly successful, they need to be prepared for this type of expanded use and still maintain all the standards, terms and conditions of the contract,” she said. SDCExec.com | March 2018 | SUPPLY & DEMAND CHAIN EXECUTIVE
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EXECUTIVE FOCUS
{ TRANSPORTATION}
By Matt Scherer
Small Businesses
FIND ADVANTAGE
in Last-Mile Meal Delivery
Food delivery services are growing, but caterers, restaurants and those in the meal-kit industry should carefully consider operational costs and customer satisfaction before partnering with high-profile couriers.
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hen Ling Wollenschlaeger, CEO of Pittsburgh Fresh, reviewed the cost of partnering with delivery services like UberEats, she discovered the operational cost of using her own drivers was lower than the wellpromoted meal/food courier service. Meal delivery options are expanding rapidly, and business owners like Wollenschlaeger and David Greensmith, president of Essential Meal Delivery, a Toronto-based food service company, say they recognize their customers’ ability to pull up a phone or tablet to order their next entrée. Market research shows that the trend will grow with American consumers. According to NPD, a U.S. market research firm, online food orders have grown from 33 percent in 2013 to 53 percent in 2017. “Almost 8 percent of NPD’s measured universe of $1.8 trillion in U.S. consumer purchasing is now online,” says David Portalatin, the 48
firm’s vice president and industry advisor for their food and beverage division, in a published report on the growth of meal delivery options. “In both retail food and foodservice, e-commerce penetration is far lower than the average across industries, but the gap is shrinking fast as Americans turn to e-commerce for groceries, restaurant meals and subscription meal kits,” he adds. “The manufacturers, retailers and restaurant operators that best leverage digital will win in today’s challenging environment.” Meal delivery concepts like UberEats, AmazonRestaurants, GrubHub and DoorDash are sprouting up like dandelions after a spring rain. Throughout the United States, these firms are delivering everything from a Big Mac to a Vietnamese avocado egg roll. Many restaurants are partnering with delivery services, says Yukon Palmer, a senior executive with FieldLogix, a GPS fleet and workforce management company, also considered an Internet of Things (IoT) provider.
Online food orders have grown from
33% in 2013 to 53% in 2017. — NPD, A U.S. MARKET RESTAURANT SERVICES RESEARCH FIRM
SUPPLY & DEMAND CHAIN EXECUTIVE | March 2018 | SDCExec.com
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TRANSPORTATION
He says restaurant owners should consider some critical factors in determining if these delivery services are cost effective, but also to consider other key customer satisfaction factors when they make their choices. “Uber takes 30 percent of each order,” says Greensmith, “That’s why I made the choice to use an internal team for deliveries.” Wollenschlaeger makes more than 100 deliveries to her customers every Sunday. “It’s hard to trust someone with so many deliveries with the standards that I want for my customers. If I used Uber, it would kill my bottom line.” “Without our own drivers, we would
prepare their meals every Sunday for her Pennsylvania customers. She assigns each driver a zone to make their deliveries. “Each driver knows his or her area, so they’re comfortable with their delivery routine,” she explains. When she adds or drops a customer in one of those zones for a vacation or extended business trip, it’s easier for her drivers to adjust to those changes. By using a custom delivery system like Goose, drivers for Wollenschlaeger’s firm can text each customer with an expected delivery time. “Our customers get to know where their driver is on his or her route, and through our notification they can anticipate the delivery,” she says. Greensmith says his drivers ask for a signature for each delivery. With some of his Toronto customers, they have a concierge who manages the front desk of their high-rise apartments or condo who sign for them. In other cases, the client tells his drivers to leave the meal by the door. When a delivery is made without someone at home, his operators take a picture of the delivery, showing their client the location of the delivery. The Goose delivery system allows his team to make needed adjustments to the dietary restrictions of his customers, says Greensmith. His deliveries have a custom account for every client who gets meals.
have less control on our delivery,” says Mairene Branham, the owner of The Meal Prep company. She adds that her drivers wear uniforms and use vehicles with the corporate logo, which helps with branding efforts to grow her base of customers. To control their delivery costs, all three owners use the Goose workforce management solution by FieldLogix to help with their multitude of meal deliveries. Wollenschlaeger and her cooks
A CONSISTENT APPROACH Having their own delivery team also adds a consistent approach for their customers, the three food executives say. Wollenschlaeger and Branham explain that their delivery system gives them feedback on the delivery, as well as comments on the meals. The Pittsburgh chef says she makes her weekly deliveries on Sunday, typically a slower day for traffic. However, accidents and construction do occur in
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her city, and her drivers have the ability to notify their clients when a delivery may take more time to get to them. Branham makes her deliveries on weekdays, and while her team keeps to an optimum schedule, they also experience delays. Like Wollenschlaeger, they also can notify their customers. Greensmith uses the delivery system notification in another way. He delivers about 30 percent of his normal orders to senior citizens. When those deliveries are completed, it alerts not only the customer but also their children or relatives who pay for them. “Those customers get a notice that their mother or father have their meals,” he explains. “If they live in another town, they have the satisfaction that the seniors have easy-to-prepare meals that meet their dietary needs.” Meal prep managers should see a growing trend for more customers, especially those patrons who want an alternative to meals high in fat and cholesterol. Yet, it’s the operational research on how to lower costs while providing a good meal with exceptional delivery that can help them compete against restaurants that rely on those well-publicized food delivery services. “When my customers take the time to review all aspects of having an internal delivery system instead of calling upon partners like Uber and Amazon, they recognize that having their own staff handle this saves them money, but having the same driver also impresses their customers,” Palmer says.
ABOUT THE AUTHOR MATT SCHERER, the CEO of Scherer Communications, advises businesses on social media and marketing opportunities. He’s an adopted Texican, who has lived in San Antonio for over 20 years.
SDCExec.com | March 2018 | SUPPLY & DEMAND CHAIN EXECUTIVE
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EXECUTIVE FOCUS
{ WAREHOUSING}
By Gwynne Richards
OPERATING THE SUSTAINABLE WAREHOUSE
With 24-hour operations, implementing sustainability initiatives is now a must in warehouse management.
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ecycling has become an everyday occurrence and carbon footprints are being left, but not without trace. These issues have also become engrained into corporate social responsibility, but what does this mean for the warehousing sector? Warehouses may not expel the same amount of carbon dioxide emissions as freight transportation; however, it can be a significant figure and provide major challenges. The growth of e-commerce coupled with consumer requirements for instant gratification has resulted in an increase in the number of warehouses— many operating 24/7, 365-days per year. Fortunately, there are many opportunities to reduce emissions. Environmental legislation has made carbon the new currency in a “carbon economy.” This new economy means organizations need to be aware of their carbon footprints, where their emissions come from and how they can reduce them. The Paris Agreement on climate change contained a commitment to
keep the increase in global temperatures to well below 2 degrees Celsius above preindustrial levels. Businesses will have to play a key role in this respect, reducing the emissions associated with their operations and supply chains. According to APL, in order to calculate a warehouse’s carbon footprint, there are several helpful primary and secondary sources available. These include government agencies such as the Environmental Protection Agency, Department of Energy, National Institute of Standards and Technology and National Oceanographic Data Center. They also include private or government initiatives such as BREEAM, LEED and EnergyStar. Many companies tend to concentrate on areas such as lighting and HVAC as they can comprise 37 percent and 30 percent, respectively, of warehouse energy costs. Using energy efficient LED lighting can reduce a building’s electricity usage, saving thousands of dollars every year. There are numerous advantages to LED lighting. LED light bulbs use less electricity than similar fluorescent and incandescent bulbs. They also last longer, with a total lifespan of up to 50,000 hours for high quality LED lamps. They also provide a higher quality, more natural light that creates a more comfortable workplace. Alongside introducing LED lights, other ways to reduce lighting costs are as follows: ❯❯ Switching off all nonessential lighting out of business hours ❯❯ Installing movement sensors, dimmers and timers ❯❯ Introducing and regularly cleaning skylights and
SUPPLY & DEMAND CHAIN EXECUTIVE | March 2018 | SDCExec.com
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WAREHOUSING
clerestory windows to increase the use of natural light ❯❯ Switching off internal and external lights when daylight is sufficient ❯❯ Switching off office lights on exit and introducing motion sensors In a recent LED retrofit warehouse project, U.K.-based Minimise Energy replaced 533 400W SON high bay lamps with 140W high bays. Over five years, this provided a 73 percent reduction in kWh energy use and achieved a payback period of 15 months. In year one alone, the cost savings achieved were £84,739 (US$111,627), with a total five-year cost saving of just over £500,000 ($658,652). The carbon emissions saving was 2,469.68 carbons over five years. As stated in the article “Strategies to Reduce HVAC Use in Warehouses,” author Kelsey Raftery says in order to reduce the energy usage of HVAC, companies should use programmable thermostats with time clocks and demand control ventilation. Experimenting with switch on times for heating and air conditioning and switching off the heating well before close of business are other ways of reducing energy usage. Installing internet thermostats on heaters will allow for monitoring and control of multiple HVAC units that sometimes get left in the heating position even during the summer. Companies also need to consider dividing the building into thermal zones with separate controls based on space function. For example, those undertaking value-adding services within the warehouse are more likely to be reasonably static compared to those areas in which fork lift trucks are operating. Companies also need to ensure the hot water supply is sized in relation to site occupancy, to check insulation levels and increase where practical.
With regard to heating, cooling and ventilation systems, companies should: ❯❯ Use natural ventilation systems and ventilation stacks. ❯❯ Introduce atria and automatic window openings combined with automatic control systems. ❯❯ Introduce passive cooling, such as breathable walls. ❯❯ Use the effective thermal mass of buildings to reduce cooling and ventilation energy. ❯❯ Introduce underfloor heating. ❯❯ Introduce sunlight reflectors. ❯❯ Use mobile air handling units. ❯❯ Switch off equipment when not in use. ❯❯ Ensure all doors are fit for purpose and have sufficient seals to prevent air and water entry. ❯❯ Ensure dock doors are not left open for long periods of time.
Companies also need to consider dividing the building into thermal zones with separate controls based on space function. Finally, lowering the temperature by 1 percent could reduce heating bills by up to 8 percent, according to the Carbon Trust, a U.K.-based organization helping company reduce carbon emissions. Although lighting and HVAC systems are the main sources of
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energy consumption in warehouses and, therefore, the areas where companies will concentrate their efforts, the self-production of energy is a serious option for warehouse operators to consider when looking to offset their carbon usage. For example, Amazon is planning to install solar panels on the rooftops of its fulfillment centers across the world. It will install large-scale solar systems on 15 of its U.S. facilities in California, New Jersey, Maryland, Nevada and Delaware by the end of 2017. Marks and Spencer, a U.K.-based multinational retailer, has installed the largest single-roof mounted solar panel array of 24,272 panels, generating nearly 25 percent of the energy required to operate its distribution center. With the introduction of other green initiatives, this distribution center has achieved
carbon neutrality. It was also partly built utilizing materials salvaged from the old power station that it replaced. In its sustainability study, DHL reports that wind turbines and the production of energy from biomass can also be a viable way to generate lowlifecycle emissions at an acceptable cost.
SDCExec.com | March 2018 | SUPPLY & DEMAND CHAIN EXECUTIVE
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WAREHOUSING There are many other areas where companies can concentrate their efforts in terms of reducing energy usage and therefore carbon emissions, but also reusing and recycling materials. These include: ❯❯ The use of ABC analysis to ensure popular items are placed close to the dispatch area and, thus, reduce travel in the warehouse ❯❯ Reducing unnecessary movement within the warehouse by introducing task interleaving ❯❯ The optimization of cubic storage space ❯❯ The use of gas, electric, hydrogen cell or hybrid forklift trucks ❯❯ Low water uses in sanitary appliances and enhanced water metering ❯❯ Rainwater collection for reuse in vehicle washing, toilets and the like ❯❯ Recycling where feasible and cost effective ❯❯ A move to utilize plastic totes/ bins in place of cardboard ❯❯ Utilization of returnable and reusable plastic or aluminum pallets ❯❯ In rack charging for narrow aisle trucks and automated equipment ❯❯ Kinetic energy plates on the access road to produce power from vehicles entering and leaving the site During a recent visit to the U.K.-based retailer John Lewis distribution centers in Milton Keynes, it was interesting to see all the waste cardboard produced from supplier deliveries being sent for recycling and the company receiving it back to use in its e-commerce operation. Miniclipper Logistics has also introduced the following initiatives with regard to recycling and reuse: ❯❯ Wood, plastic, paper, card and metal is separated and recycled and removed by three recycling companies ❯❯ Two balers are installed (one 52
plastic, one cardboard) and staff are trained in their use ❯❯ Office paper is shredded and used as packing materials in warehouse ❯❯ No plastic/paper cups in office areas, glass and plastic packaging are recycled ❯❯ Ninety percent of incoming cardboard boxes reused for packing despatch items As a result, no general waste goes to landfill—a significant environmental and cost savings. With the growth of e-commerce and the shortage of skilled labor in the warehousing market, many companies have turned to automation as a potential solution. Although requiring energy to power the automation, these systems tend to be more efficient and more accurate than humans. Automated storage and retrieval systems (AS/RS) and mini-load and shuttle systems can all work in the dark and don’t require heating or air conditioning. Lighting is available for maintenance, but the majority of the time these machines work in the dark saving a significant amount of energy. These machines can also produce their own energy as they move up and down the aisles. When an automated machine is in motion, the kinetic energy created from this movement converts electrical energy into mechanical energy that can be used to perform tasks. When a stacker crane stops, its kinetic energy is turned into heat. There are other aspects, such as encouraging staff to use public transport, staff car sharing schemes, walking or cycling to work. Companies can also consider planting trees and shrubs to assist with the removal of emissions and sourcing materials locally, such as packaging, paper and equipment. Managers need to continually assess the situation by walking around the warehouse at various times during operating hours and encourage staff
to point out areas where energy can be reduced and where there are opportunities for reusing and recycling. ISO14001 accreditation ensures that companies undertake a full review of their environmental policies and are continually looking at ways to reduce their impact on the environment. A major challenge across all industry sectors today is ensuring a sustainable supply chain. Clearly, there are solutions on the market that can help warehouses operate in a more sustainable way. By combining available technologies and solutions in terms of energy savings, heating and cooling systems, and alternative energy sources, a warehouse can be designed that emits 70 percent less carbon than a typical 15-year-old warehouse. In its research, McGraw Hill Construction found that companies that either built green warehouses or retrofitted green ideas, decreased operating costs by 15 percent and 13 percent, respectively, and attained payback within a maximum of 8 years. The Carbon Trust emphasizes that “by stimulating resource efficient and low carbon action we contribute to green goals, including the lowering of carbon emissions, the development of low carbon businesses, increased energy security and job creation.” Introducing environmental initiatives can be expensive initially; however, companies can recover their costs reasonably quick and gain access to government grants to assist. Going “green” makes sound business sense. ABOUT THE AUTHOR GWYNNE RICHARDS is the author of Warehouse Management: A Complete Guide to Improving Efficiency and Minimizing Costs in the Modern Warehouse, published by Kogan Page. He has over 30 years of experience in warehouse management and logistics. As well as running his own successful logistics consultancy, he provides a number of courses on warehouse and transport management and logistics outsourcing for practitioners.
SUPPLY & DEMAND CHAIN EXECUTIVE | March 2018 | SDCExec.com
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2018 Educational Webinar Series DETAILS & REGISTRATION: S D C E X E C . C O M / W E B I N A R S T I M E : 1: 00 P M E T / N O O N C T / 11:00 A M MT / 10:00 A M P T
AT T E N D F O R F R E E T H A N K S T O O U R S P O N S O R S
April 18
April 23
Warehouse Automation
_________________ A shrinking labor force, high real estate/facility costs, and the quest for improved throughput, accuracy, and cost control continue to drive investments in warehouse automation. Yet, investments are often steep and flexibility and scalability are sometimes compromised. Sponsored by:
August 15
Risk Mitigation I Procurement _________________ Trends I _________________ Risk is inherent to global supply chains, manifesting in a variety of ways. Identifying risk in your supply chain and preparing and planning accordingly is critical. Join a panel discussion on best practices for analyzing and mitigating supply chain risk.
How are organizations refining their procurement strategy to drive improvements to the bottom line? Is procurement the first line of defense in your risk and compliance program or a vulnerability?
Sponsored by:
Sponsored by:
September 26
October 24
_________________
The Internet of Things II
Expert panelists discuss how to evaluate visibility across borders and multiple suppliers to predict and respond to risk, the ability to collect/exchange information throughout the supply chain and how to choose/implement the right tools/metrics for a comprehensive risk mitigation program.
The IoT is part of the overall digital transformation underway across global supply chains. While the promises are plentiful, so too are the perils. Join industry experts for a candid conversation on how to get the most out of the IoT while avoiding the
Risk II
May 16
_________________
ON-DEMAND NOW!
Predictive Analytics II
_________________ Predictive analytics, combined with Prescriptive analytics, offer powerful supply chain management information for manufacturers, retailers and logistics providers. An expert panel offers insight into how organizations can leverage these tools, including how to evaluate various and competing solutions to make the right investment.
June 20
Predictive Analytics
_________________ Improvements in predictive analytics are generating immense value for supply chains, but only when data is interpreted and applied effectively. How can organizations ensure they fully capitalize on predictive analytics opportunities? What are lessons learned from industry peers that faced similar challenges?
December 11
Executive Outlook for Supply Chain 2019 _________________
SDCE’s annual Executive Outlook educational webinar brings together industry executives for a roundtable discussion of the top-level trends and developments taking shape in the supply chain sector and what that means for the year ahead.
The Internet of Things I
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Dates are subject to change.
3/14/18 12:20 PM
EXECUTIVE FOCUS
{ SOFTWARE & TECH}
By Jason Fiume and John Rosenberger
BIG DATA EMPOWERS TELEMATICS
How leveraging big data to optimize your fleet can increase ROI.
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utilization, operator performance, impacts and scheduled maintenances, it is more difficult to measure opportunities for improvement in such key areas. Implementing telematics systems on your equipment can be a cost-effective way to set a baseline. A baseline report will help identify outliers—hidden costs and missing hours—that are impacting your company’s bottom line.
s a supply chain executive, RIGHT-TIME MAINTENANCE questions SAVINGS about increasing For years, it was a common industry return on investment best practice for facilities to adhere (ROI) are always at to preventive maintenance, which the forefront of your entailed scheduling truck upkeep every mind. What are quick 90 days, regardless of truck usage. yet long-term ways The expectation was that performing to cut operating and regularly scheduled maintenance manufacturing costs? would help reduce or avoid unexpected How can you optimize your lift truck breakdowns and costs incurred when a fleet and reach maximum productivity? truck is not in operation. Are you running as efficiently as your What many manufacturers competitors? are moving toward is predictive Knowledge is power. Fortunately, with maintenance. This technique relies on today’s technological advancements, directly monitoring the equipment it’s becoming much easier to gain performance during normal operation real-time information about your fleet to anticipate possible failures based and operators’ performances. One on operating parameters exceeding key innovation leading the way in established tolerance thresholds. the manufacturing and supply chain The expectation is that, because industry is telematics systems. powered industrial equipment is Whether you have operated very differently been running with between customer sites, You cannot telematics systems on associated service intervals improve what will also vary greatly. your trucks for years or you are weighing cost you don’t know. Therefore, some preventive versus ROI, here are maintenance intervals some benefits may be too long based on the way the of implementing a system that you equipment is used within a facility. should consider. On the contrary, some preventive maintenance intervals may result BASELINE IDENTIFICATION in over-servicing trucks, leading to You cannot improve what you don’t unnecessary expenses. know. If your warehouse team has A recent study by The Raymond not been consistently tracking fleet Corporation of a company with an
SUPPLY & DEMAND CHAIN EXECUTIVE | March 2018 | SDCExec.com
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SOFTWARE & TECH
88-truck fleet provides a good costmay have heightened equipment needs. Automating OSHA checklists with savings example of how predictive For example, telematics systems data telematics systems can save operators maintenance can put money back helped the above company realize it roughly six minutes per checklist. into your warehouse budget. Using had nine rental trucks it did not need For a company that performed preventive techniques, Raymond for most of the year. Right-sizing 153,535 paper checklists on 2,362 monitored scheduled maintenances your fleet to fit day-to-day needs and trucks—spanning more than 20 within a 90-day interval to calculate renting equipment when necessary facilities—over the course of a month, deadman hours per truck. Raymond’s will save on maintenance, operator and the cost of operators’ time equaled iWAREHOUSE telematics system truck costs. roughly $307,000 a month. Assuming helped this company determine that an hourly wage of $20 per operator, only 15 of 88 trucks had more than IMPACT REDUCTION this equates to more than $3.7 million 500 deadman hours, and 20 trucks Fewer impacts can lead to reduced per year spent completing OSHA had fewer than 250 deadman hours. costs. This straightforward supply checklist The metrics from the telematics chain concept is not news to you. Time is money. Automating system calculated that 25 percent of However, you may find that when you this process by electronically filing the company’s estimated 352 checklist results through a wireless yearly scheduled maintenances telematics system helps put time Telematics systems monitor could be avoided—equating to back into your operators’ schedules, peak operations seasons and can which can be reallocated to more approximately $10,000 in cost savings annually. value-added tasks.
FLEET RIGHT-SIZING— AND RIGHT-TYPING
determine when you may have heightened equipment needs.
The data aggregation telematics systems offer can also expose patterns of equipment inefficiencies and assist with how to right-type your fleet. Telematics systems can help assess which trucks are working the hardest and which trucks can be removed from the fleet based on utilization data. After nine months of using telematics systems, a company with 76 trucks reduced its fleet to 67, removing one counterbalance forklift, one orderpicker, three pallet jacks and three swing-reach trucks. Reducing its equipment by 12 percent led to approximately $72,000 in cost savings, which includes the telematics system monthly fee, truck maintenance and staffing expenses. Another aspect of fleet right-sizing that telematics systems can help with is determining when it is better to rent or buy equipment. Telematics systems monitor peak operations seasons and can determine when you
evaluate operational costs, it can be challenging to correlate a direct cost to impact. At a high level, a metrics report may show that product is being moved quickly in and out of the warehouse. What may not be visible on the reports is that, while operators are moving quickly, you’re losing $5,000 in damaged equipment or racking repairs. Telematics systems provide visibility into how often these impacts are happening, key areas in the warehouse where accidents are occurring and impact frequency per operator and per truck. Additionally, the data shows high-impact zones that may be due to blind spots, rough areas on the floor or staging with bad corners that are leading to severe truck damage.
COMPLIANCE COST SAVINGS Can you calculate how much time your operators spend on Occupational Safety and Health Administration (OSHA) checklists each year? We can.
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BEHAVIORAL AND PERFORMANCE METRICS Telematics systems also provide cost savings by improving operators’ accountability and behavior. Often, when operators know performancebased data is being collected, warehouses experience a reduction in equipment impacts and an increase in operator productivity. Most telematics systems can provide custom reports to measure and track specific key performance indicators to tailor the system to your business and operator benchmarks. With today’s increasingly shortened production deadlines, tracking and analyzing your warehouse data will help your company remain stable, profitable and ahead of competition.
ABOUT THE AUTHOR JOHN ROSENBERGER is the director of iWAREHOUSE GATEWAY and Global Telematics at The Raymond Corporation. JASON FIUME is the manager of iWAREHOUSE Professional Services.
SDCExec.com | March 2018 | SUPPLY & DEMAND CHAIN EXECUTIVE
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EXECUTIVE FOCUS
{ PROFESSIONAL DEVELOPMENT}
By Bill Michels
Supply Chain Talent Shortage:
GAP CRISIS? OR
The attitude toward supply chain has changed significantly as its importance in many industries has increased. While talent is still scarce, opportunity abounds.
W
hen speaking to many supply chain executives and human resource recruiting professionals about attracting and retaining supply chain talent, there is agreement that it’s a challenging task. For every graduate with a supply chain degree, there are six to eight jobs available to fill. This imbalance of candidates to available jobs is evidence of the talent shortage gap. Much of the current supply chain workforce is now reaching or beyond retirement age, which is creating a crisis when we analyze requirements for the near term.
SUPPLY CHAIN GAINS RESPECT For many years, the supply chain profession had been considered a dead-end career. In this environment, there were limited opportunities for incumbents to demonstrate business and strategic skills, compounding the attitude that the skillset is limited. This attitude has changed significantly as the supply chain has increased its importance in many industries. Savvy CEOs now understand that the supply chain is the vital link to organizational success. 56
The reality is that the supply chain is the largest contributor to increasing shareholder value in most organizations.
A NEW ERA EMERGES We now operate with an Amazonera mentality, where deliveries are expected to be made sooner rather than later. Customers expect immediate shipments with 100 percent product availability 24/7. Any miss in deliveries is considered a performance failure. This new way of thinking has changed what business expects from supply chain teams. Today’s supply chains require agility, speed, flexibility, asset utilization and efficiency to deliver value to end customers. With shorter product lifecycles, the ability of supply chains to be first to market is a real source of competitive advantage and can make the difference in winning or losing market share. Not all organizations understand that the supply chain contributes higher shareholder value than almost any other business function, but they are learning fast. If their organizations cannot execute value-driven procurement, aligned to the business strategy, they are at a disadvantage as industry moves to more integrated supply chains. The ability to manage cash and company assets to deliver materials and services to the customer
SUPPLY & DEMAND CHAIN EXECUTIVE | March 2018 | SDCExec.com
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PROFESSIONAL DEVELOPMENT
in a just-in-time delivery model must be a core competency of any organization just to compete in today’s business environment.
MARKET CHANGES PROVIDE OPPORTUNITIES It should be said that the supply chain profession is expanding rapidly at a pace that outstrips the ability to keep up with change. It’s changing faster than workers can adapt and become qualified. The image of supply chain and its legacy of a dead-end career has a direct impact on recruiting millennials to the profession. There is a need to enhance the image of supply chain and promote it as a function requiring the brightest and best strategic minds in the organization.
BUILD TALENT FROM WITHIN Some companies have come to the realization that they are not going to find ready-made supply chain talent and are building development programs to mold and develop talent. They start early in career fairs in high schools. They follow the brightest and best students to college, offer internships and weed out people that won’t make the grade. Once these students graduate, they are put in rotational programs and rotate them through different business units, functions and countries. The company is building development and training programs tailored to the business and leadership roles they will assume. In many cases, these new employees are assigned to a mentor who coaches their development. The programs are difficult and the rotations are hard, but those that survive the program can quickly make a contribution. Those who wash out of the program are enhanced through the experience. A process like this requires investment and is usually a program 58
Is it a talent GAP or CRISIS? Five Keys to Recruiting Talent:
WWBuild a solid recruiting plan
and strategy. It is best to build a comprehensive strategy for recruiting supply chain talent. This should consist of college recruiting, training and development for the existing team and looking across all industries.
WWBuild a brand for supply
chain and the company. It is best to identify how the company fits in the industry as well as how it values the supply chain as a source of increased value.
WWBuild strong compensation
and benefits plans to attract the best talent.
WWBuild specific career ladders
showing how people will progress through to the C-suite.
WWEncourage problem solving and innovation.
for a larger company. It is essential that even a midsize or smaller firm think about talent development programs or they may be at a considerable competitive disadvantage in the future.
RETENTION IS CRITICAL While it is critical to recruit talent, it is equally important to find a way to retain the team. The culture of the company is extremely important when considering talent management. The best cultures are ones of collaboration and teaming. When the company mission and values are clear, employees can align with the values and have a sense of purpose. If the culture is accepting to new ideas, innovation and creativity, it is likely that employees will stay. Mentoring and good supervision with a sense of fairness will appeal to most employees.
It is extremely important to realize that other companies in your industry are understanding the increased value and opportunities to drive competitive advantage and market share through an agile supply chain. It is likely that you will be competing for the same resources and, in some cases, your competitors will be looking to your firm for talent. Since the resource is scarce and all of the experts predict it will get worse before it gets better, it is naive to think that your company will stand out from the pack without creating points of differentiation. This is a case where spending more money will not be the sole consideration of the talent you want to attract. The following are also considerations that potential recruits will consider: ❯❯ Challenging work ❯❯ Team environment ❯❯ Opportunities for development ❯❯ Diverse business culture ❯❯ Career growth ❯❯ Opportunities to learn ❯❯ Exposure to different cultures and countries ❯❯ Value for innovation and creativity ❯❯ Team work We are in a challenging industry with scarce resources to keep our organizations moving forward. Top talent is hard to attract and even harder to keep. Bringing in people on a mission with a shared sense of purpose and a growth plan can make your organization a fierce market competitor. ABOUT THE AUTHOR BILL MICHELS is currently vice president of operations, America for CIPS (the Chartered Institute of Procurement & Supply). Bill has served as CEO and founder of Aripart Consulting, President ISM Services and CEO of ADR North America. In addition to his consulting career, Bill has held senior procurement and supply chain positions in manufacturing, and the paper and food industries.
SUPPLY & DEMAND CHAIN EXECUTIVE | March 2018 | SDCExec.com
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GET THE RECOGNITION YOU DESERVE! 18th Annual
2018
PROS to 2018 KNOW
SUPPLY CHAIN
11 th Annual
PROS TO KNOW AWARDS Honoring leading executives for improving the global supply chain through sustainable and proactive business initiatives. Winners announced in March 2018 issue.
SDCE 100 AWARDS
Transforming Supply Chains with Software & Technology The annual SDCE 100 is a project-based award that recognizes leading software and technology providers that are helping transform supply chains with their products and services.
NOMINATION DEADLINE: Applications Closed Winners announced in June 2018 issue.
GREEN SUPPLY CHAIN AWARDS Recognizing companies that implement green practices as a core function of their supply chain operations.
NOMINATION DEADLINE: 9 / 7 / 1 8
Winners announced in December 2018 issue.
Each year, Supply & Demand Chain Executive recognizes individual and corporate leaders in the global supply chain. Plan now to enter your company, executive or a cutting-edge client or vendor in one of these industry-leading recognition programs.
Award results, information and nominations posted on:
SDCEXEC.COM/AWARDS
Nomination dates and issues may change. Consult the call-for-entries email and nomination survey for confirmation.
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WORK HARD, By Amy Wunderlin
Smooth SAILING Yacht racing captures marketing guru David Cahn’s competitive spirit.
A
competitive streak is no surprise in the average supply chain executive. It’s a trait that carries many industry professionals to great heights of success. Yet for others, it manifests not only in the office, but through personal passions. Elemica’s Product Marketing Manager David Cahn’s need to compete has carried him through many seasons of life, beginning as a four-year-old Long Islander first learning to sail. “I’ve been sailing since I was probably around four years old and got involved in racing not much later, because once you’re in a sailboat and you see another sailboat, you tend to want to race them anyway. So racing kind of is in the competitive nature of it all,” he explains. In fact, Cahn’s favorite part about yacht racing is that competitive spirit. “You want to win; you’re really competitive and there’s a lot of strategy and teamwork involved in the race —which paths you take and which angles to take and which way the current is going. So the team has to make some very key decisions as part of its strategy. Sometimes you win, sometimes you lose, but at the end of 60
the day it’s great fun.” A high school track star, Cahn attended college on a full track scholarship, competing as a high hurdler in several state and national championships. “I’ve always kind of had this competitive spirit that drives me not only in my hobbies, but it also drives me at work. I’m very focused, very driven to get things done on time and achieve results,” he says. Cahn participated in his first yacht race when he was 10 years old around Connecticut on the Long Island Sound, which is a 110-mile tidal estuary of the Atlantic Ocean. As he got older, Cahn ventured away from the city, racing from New York to Bermuda. “After that, I fell in love with (the sport),” he recalls. Yacht racing involves sailing yachts and larger sailboats in direct competition around a course marked by buoys or other fixed navigational devices or racing longer distances across open water from point-to-point. It can involve a series of races when buoy racing or multiple legs when point-to-point racing. Cahn has participated in both types of races, including races from New York to London and Sydney to Hobart,
New Zealand, as well as race weeks in Antigua and Bermuda. The Sydney to Hobart Yacht Race is an annual event, stretching approximately 630 nautical miles (1,170 kilometers), and is widely considered to be one of the most difficult yacht races in the world. On the flipside, Cahn also enjoys sailing as an escape. Each year his family rents a sailboat somewhere in the world and sails for a few weeks with one or two other couples. They’ve sailed throughout the Caribbean, Australia, Belize and the Mediterranean, to name a few. “Sailing is just a passion of mine. So I like to do the yacht racing, the extreme racing, and then I like to do the pleasure cruise with the family and friends,” he says. He adds: “As we get older, I think we understand the value of the work-life balance and the value of family and what that really means in the long run. The hobbies to me have always been an escape, a brain release so to speak. You take that energy and focus and kind of say, ‘Alright I need to release some energy or I need to change my focus.’ And so focusing on a race is a little different than focusing on getting your work done; that’s a totally different kind of energy and kind of mindset. So there is a work-life balance as we get older, and I think we naturally make that transition.”
SUPPLY & DEMAND CHAIN EXECUTIVE | March 2018 | SDCExec.com
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