Supply & Demand Chain Executive June 2017 by Supply+Demand Chain/Food Logistics

OPPORTUNITIES IN TECHNOLOGY AND ANALYTICS DRIVE THE MODERN 3PL Global Supply Chain Solutions Covering Procurement, Risk, the IoT and More

JUNE 2017

THE IOT REVOLUTION

IoT helps companies generate demand-sensing insights, shorten response times

GONE PHISHING

2017 SDCE 100

Innovative ideas and solutions that lay the framework for supply chain success

Protecting supply chain payment processes from cybersecurity threats

Wal-Mart:

GIVE ME A

GIGATON Global retail giant asks its suppliers to join them in eliminating one gigaton of emissions from the supply chain by 2030

Fresh new content daily at SDCEXEC.COM

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16th Annual

100 GREAT SUPPLY CHAIN PROJECTS This yearâ&#x20AC;&#x2122;s Supply & Demand Chain

Executive (SDCE) 100 highlights supply chain solution and service providers that are working with small, medium and

large enterprises to transform their supply

chains and deliver value to the bottom line. These leaders are helping their customers

meet the challenges of the new normalâ&#x20AC;&#x201D; and laying the framework for successful supply chain transformation.

100 GREAT

SUPPLY CHAIN SUCCESS STORIES

2017 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

June 21

August 30

September 27

October 25

Procurement Trends

Predictive Analytics

Cargo Safety & Security

The Internet of Things II

Sponsored by:

November 15

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The Internet of Things Sponsored by:

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Dates are subject to change.

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June 2017 | Volume 18 | Issue 3

CONTENTS LAYING THE FEATURE FRAMEWORK 16 GOING GREEN

for Supply Chain Success

Innovative ideas and solutions to guide industry leaders in maximum efficiency, profitability and more.

Wal-Mart: Give Me A Gigaton

Global retail giant asks its suppliers to tackle sustainability efforts to eliminate one gigaton of emissions from the supply chain by 2030.

SPECIAL REPORTS

22 THE INTERNET

OF THINGS Supply Chainâ&#x20AC;&#x2122;s IoT Revolution

The IoT helps companies collect realtime data to generate demand-sensing insights and shorten response times.

24 PROCUREMENT Innovation Through Responsible Sourcing

Companies differentiate themselves through sustainability

26 TRADE

FINANCE Protecting Supply Chain from Phising Attacks

21 28

SDCEXEC.COM

28 T RANSPORTATION Technology Drives the Modern 3PL

Investing in technology and analytics creates opportunity for 3PLs.

30 WAREHOUSING

E-commerce Reshapes DC Real Estate Strategies The fast-delivery revolution is disrupting the distribution eco-system.

32 SOFTWARE

& TECH ERP in the Cloud The comfort of on-premise ERP makes way for cloudbased technology.

35 PROFESSIONAL DEVELOPMENT Uncover the Hidden Gems Finding supply chain talent in uncommon places.

COLUMNS

04 EXECUTIVE MEMO 20 MADE IN AMERICA 36 WORK HARD, PLAY HARD

Exclusive online features and solutions for successful supply chain operations

Artificial Intelligence to be One of Biggest Digital Distruptors

Five Mistakes Supply Chain Companies Make that Affect their Success

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Both POS and electronic invoicing systems are at the greatest risk.

EXECUTIVE FOCUS

Closing the Logistics and Supply Chain Gender Gap sdcexec.com/12340667

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EXECUTIVE MEMO By Ronnie Garrett, Editor rgarrett@ACBusinessMedia.com

CLIMATE CHANGE TAKES CENTER STAGE Will you be on stage with Wal-Mart in the fight to keep greenhouse emissions in check?

his issue contains both bad news and good news, which would you like first? The bad news is that the burning of fossil fuels is sending heattrapping gases into our atmosphere, causing the Earth to warm at a rapid rate. In fact, scientists warn that unless we curb global-warming emissions, the average U.S. temperatures could rise 10 degrees in the next century.

Now whether or not you agree with Trump’s assumption, there is science behind global warming and its potential impacts, and there is a need to do something about it today before the supply chain, and those depending on it, feels these impacts. However, there is good news among all of this doom and gloom—there is still time to do something about global warming. And in this issue, we feature one company that stands ready to take the lead role. Global retail giant, Wal-Mart, recently launched Project Gigaton, a first of its kind initiative that calls on its suppliers to take — DEXTER GALVIN, CDP one gigaton of carbon out of the atmosphere by 2030. By But temperature challenging companies all over the world increases are just a to reduce emissions, it is hoped the small part of the global warming issue. initiative will spur suppliers to do more When the climate changes, the globe to reduce their carbon emissions at a will see more unpredictable and extreme scale needed to avert the worst impacts of weather events, and those calamities climate change. threaten supply chains’ ability to move The time is now for every company raw materials and finished goods from to follow Wal-Mart’s lead. Take a look point A to point B. at what your company and your supply Adding to these problems lurking chain are doing to impact climate change. on the horizon is the fact that global As the federal government takes a step warming initiatives have come to a back in addressing climate change, it’s political standstill, at least for the United time for the private sector to take a step States, as President Donald Trump forward. Will you be watching from the announced his intent to withdraw from sidelines? Or taking center stage as Walthe Paris Climate Accord. He maintains Mart has done? the pact imposes unfair environmental mandates on American businesses and workers.

“80 PERCENT OF A COMPANY’S EMISSIONS ARE EMBEDDED IN ITS SUPPLY CHAIN.”

SUPPLY & DEMAND CHAIN EXECUTIVE | June 2017 | SDCExec.com

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Published by AC Business Media Inc. 201 N. Main Street, Fort Atkinson, WI 53538 (800) 538-5544 • www.ACBusinessMedia.com

www.SDCExec.com PRINT AND DIGITAL STAFF GROUP PUBLISHER Jolene Gulley ASSOCIATE PUBLISHER Judy Welp EDITORIAL DIRECTOR Lara L. Sowinski EDITOR Ronnie Garrett MANAGING EDITOR Carrie Mantey ASSISTANT EDITOR Amy Wunderlin SENIOR PRODUCTION MANAGER Cindy Rusch ART DIRECTOR Kayla Brown AUDIENCE DEVELOPMENT DIRECTOR Wendy Chady AUDIENCE DEVELOPMENT MANAGER Angela Kelty ADVERTISING SALES (800) 538-5544 JOLENE GULLEY, jgulley@ACBusinessMedia.com STEPHANIE PAPP, spapp@ACBusinessMedia.com EDITORIAL ADVISORY BOARD LORA CECERE, Founder and CEO, Supply Chain Insights TIM FEEMSTER, President, Foremost Quality Logistics JOHN M. HILL, Director, St. Onge Company, and Board of Governors, Material Handling Industry of America RORY KING, Analytic and Big Data Advisor, SAS Institute KAREN MASTER, Vice President of Communications, SAP Ariba WILLIAM L. MICHELS, CEO, Aripart Consulting JULIE MURPHREE, Founding Editor, Supply & Demand Chain Executive ANDREW K. REESE, Senior Portfolio Marketing Manager, IHS, and Former Editor, Supply & Demand Chain Executive BOB RUDZKI, President, Greybeard Advisors CHRIS SAWCHUK, Global Managing Director and Procurement Advisory Practice Leader, The Hackett Group RAJ SHARMA, CEO, Censeo Consulting Group KATE VITASEK, Founder, Supply Chain Visions CIRCULATION & SUBSCRIPTIONS P.O. Box 3605, Northbrook, IL 60065-3605 (877) 201-3915, Fax: (800) 543-5055 Email: circ.sdcexec@omeda.com LIST RENTAL Elizabeth Jackson, Merit Direct LLC (847) 492-1350, ext. 18, Fax: (847) 492-0085 Email: ejackson@meritdirect.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 2017 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. Periodicals postage paid at Fort Atkinson, Wisconsin and additional entry offices. POSTMASTER: Please send all changes of address to Supply & Demand Chain Executive, P.O. Box 3605, Northbrook, IL 60065-3605. Printed in the USA. SUBSCRIPTION POLICY: Individual subscriptions are available without charge in the United States, Canada and Mexico to qualified individuals. Publisher reserves right to reject nonqualified subscribers. One-year subscription to nonqualified individuals: U.S., $30; Canada and Mexico, $50; and $75 for all other countries (payable in U.S. funds, drawn from U.S. bank). Single copies available (prepaid only) for $10 each. Return undeliverable 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 is believed to be accurate. The publisher cannot assume responsibility for the validity of claims or p erformances of items appearing in editorial presentations or advertisements in the publication. June 2017 / Volume 18 / Issue 3

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2,700 containers go overboard each year*. But, you’re absolutely, 100% protected, right? Containers are lost at sea every week. Many are intentionally dumped by the captains of ships in distress. In accordance with maritime law, when a captain must dump containers, all shippers sharing the vessel share the loss. So even if your shipment doesn’t go overboard, you still pay. News to you? Not to us. With more than 100 years of expertise, UPS Capital Insurance Agency, Inc. will customize a policy that protects you from maritime laws and other surprises in your supply chain. We’ll even cover your losses for their full retail value. Protect yourself. upscapital.com

UPS Capital insurance Agency, Inc., and its licensed affiliates are wholly owned subsidiaries of UPS Capital Corporation. Insurance coverage may not be available in all jurisdictions. Insurance is underwritten by an authorized insurance company and issued through licensed insurance producers affiliated with UPS Capital Insurance Agency, Inc., and other affiliated insurance agencies. ©2016 United Parcel Service of America, Inc. UPS, UPS Capital, the UPS brandmark and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. *World Shipping Council – Survey Results for Containers Lost at Sea – 2014 Update.

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LAYING THE FRAMEWORK

for Supply Chain Success The 2017 Supply & Demand Chain Executive 100 outlines innovative ideas and solutions to guide industry leaders in maximum efficiency, profitability and more.

FEATURED PROJECTS

ENABLER: 3GTMS — www.3gtms.com CUSTOMER: Corsicana Bedding PROJECT GOAL: Enable new business initiatives that

would increase automation and streamline operations SOLUTIONS: 3G-TM system BUSINESS IMPACT: Corsicana required substantial business changes during implementation and after the go-live, particularly around order fulfillment. 3GTMS’ responsive teams and flexible software enabled every change. In addition, Corsicana’s improved automation and business intelligence have improved efficiencies.

ENABLER: AGISTIX — www.agistix.com CUSTOMER: Top 10 utility company PROJECT GOAL: Global supply chain visibility and

execution platform SOLUTIONS: Robust suite of REST APIs, web services, EDI integration and automation BUSINESS IMPACT: The project continues to evolve as new use cases surface, but hard and soft dollar savings are greater than 22 percent.

ENABLER: ALLEN LUND COMPANY/ ALC LOGISTICS — www.alclogistics.com CUSTOMER: Top 10 international retailer PROJECT GOAL: Automate and centralize the dock

scheduling of all 40 locations for 1,000,000 appointments SOLUTIONS: ALC Logistics Customized Dock Scheduling Module, a part of the full transportation managment systme (TMS)suite built on the Oracle platform BUSINESS IMPACT: ALC Logistics automated the dock scheduling, so that carriers could make their own appointments. Those appointments now automatically show up in an integrated TMS. The solution cut out hundreds of thousands of phone calls, giving visibility to all locations and making the entire system more efficient.

ENABLER: ALOM — www.alom.com CUSTOMER: Connected car navigation

solutions company SOLUTIONS: Read/write Compact NAND Flash memory with embedded Digital Rights Management software PROJECT GOAL: Create worldwide automotive GPS over air navigational system software installation and update supply chain program for 2018-2024 vehicles BUSINESS IMPACT: The customer is poised to enter full production on schedule having achieved all project objectives. Due to the extent of firmware customization that ALOM required, a new grade level of commercially available Compact Flash SD card media is being manufactured that is less expensive to produce than higher cost automotive grade SD card media. This will save $3 to $6 for each card, multiplied by millions of vehicles produced each year. More significant than media component savings, however, is the navigational map content update benefit gained. This technology will benefit the automobile manufacturer by allowing over air update of navigation data, eliminating the need for card hard swap updates.

ENABLER: AVERCAST LLC — www.avercast.com CUSTOMER: Apparel manufacturer and distributor SOLUTIONS: Avercast Sales Forecasting (ASF) PROJECT GOAL: Implement forecasting and demand

planning software

BUSINESS IMPACT: Streamlined the forecasting and demand planning process. Improved forecast accuracy through feedback from sales personnel. ENABLER: BLUE RIDGE — www.blueridgeglobal.com CUSTOMER: Ace Hardware SOLUTIONS: Blue Ridge Supply Chain Planning PROJECT GOAL: Implement a global demand

forecasting solution to improve service level, optimize fill-rates, and keep inventory levels at a minimum

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SDCE 100 » 2017

By Editorial Staff, Supply & Demand Chain Executive There are many facets to developing world-class supply chain management capabilities. One of the most important activities a company can pursue to develop and implement best practices is leveraging well-organized, well-scoped projects that are relevant to a company’s strategic objectives. The outcomes from projects provide insight, innovation and opportunity for improved operations. The 2017 Supply & Demand Chain Executive 100 spotlights a few of the industry’s most successful and transformational projects that deliver value to enterprises across a range of supply chain functions. The supply chain projects featured in this awards program offer a forwardlooking perspective for the industry on new opportunities designed to drive operational success. This year’s projects were selected by management professors and key executive practicum advisors at North Carolina State University as part of the project-based practicum curriculum in the university’s supply chain management program.

BUSINESS IMPACT: Through a combination of initiatives, Ace Hardware reduced out of stock numbers to stores by more than 40 percent. In conjunction with this, they have been able to lean inventories by 8 percent. Moreover, the software has exposed some notable issues to buying far beyond their needs. The single largest benefit is the amount of time saved with placing buys. This used to be a laborious, manual task that the team dreaded, but with the onset of the new system, buys are a very small fraction of the day and are done more effectively. ENABLER: B-STOCK SOLUTIONS — www.bstock.com CUSTOMER: Fortune 500 multi-channel consumer

electronics retailer SOLUTIONS: B-Stock’s B2B Enterprise Technology Solution PROJECT GOAL: Execute a branded business-tobusiness (B2B) marketplace for the retailer’s trade-in mobile inventory BUSINESS IMPACT: B-Stock connected the retailer’s trade-in mobile inventory directly to qualified business buyers. Right out of the gate the retailer found that it was just as easy to accept bids from thousands of buyers as it was to sell to a small handful of liquidators. Through its demand generation programs, B-Stock connected its existing global buyer base to the marketplace and continues driving new buyer traffic. The constant stream of new buyers has allowed the retailer to expand its tradein business significantly by providing better pricing intelligence and by giving inventory access to an ever-expanding buyer base. The buyer base has grown over 1,700 percent since site inception. What’s more, the marketplace provides a fully accountable and documented transaction trail, where every point of the process, including price determination and revenue recognition, are recorded systematically. This allows for rigorous compliance and reduces risk.

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ENABLER: CELESTICA INC. — www.celestica.com CUSTOMER: Celestica Inc. SOLUTIONS: SAP GTS, Google Drive, Google

Documents, Google Sheets, Google Slides, Winshuttle, Strive Project Status, Smart Sheets, Webex PROJECT GOAL: Deploy Global Trade Services (GTS) to automate Celestica’s compliance with international trade laws and regulations governing the export of cross-border transactions BUSINESS IMPACT: Celestica deployed SAP’s GTS Compliance Management module throughout the global network to replace a manual trade compliance management processes. These manual processes put Celestica at risk for non-compliances as well as limited Celestica from entering into key markets with high trade compliance requirements. The deployment of GTS enables the automation and standardization of transactional denied party screening and export license determinations. Since the first release in July 2016, Celestica has successfully screened 320,958 sales orders and 28,785 customer and vendor records in GTS with no negative customer impact.

ENABLER: CONEXIOM — www.conexiom.com CUSTOMER: Edwards Garment SOLUTIONS: Conexiom Sales Order Automation PROJECT GOAL: Maintain a high level of customer

service, while processing orders with 100 percent accuracy and shipping within one day BUSINESS IMPACT: With the goal to remove as much manual data entry as possible to free up the time for customer service representataives (CSR) to perform more revenue generating tasks, Edwards Garment streamlined their order processing, resulting in faster order cycles.

ENABLER: DECISIV — www.decisiv.com CUSTOMER: Oakley Transport SOLUTIONS: Decisiv Service Relationship

Management (SRM)

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SDCE 100 » 2017 PROJECT GOAL: To reduce triage, downtime and

lower total cost of ownership (TCO), while improving the efficiency of service and repair events BUSINESS IMPACT: Prior to adopting the Decisiv SRM platform, Oakley Transport was handling scheduled and unscheduled service and repair events using a phone-intensive, manual and time-consuming process. They now are using the platform for about 200 external repair orders per month, as well as required towing requests. The customer has saved $60,000 annually by eliminating outside systems, reducing paper forms, and improving documentation and communications; $50,000 in savings, a 9 percent improvement in five months, by ensuring all warranty claims on covered items are filed and recovered; $40,000 by transferring a breakdown specialist to the company’s operations department; $20,000 annually by eliminating estimate-invoice mismatches; 10 percent improvement in asset utilization by collaborating to exchange incontext information, including asset service histories, specifications, inspection reports, campaigns, recalls and preventative maintenance needs; a drop in turnover rate from 95 to 65 percent; and 50 percent less time on the phone by receiving automatic status updates on trucks that are in service provider shops.

ENABLER: DEMAND SOLUTIONS — www.demandsolutions.com CUSTOMER: Siemens Healthineers SOLUTIONS: Demand Solutions DS1 and DSX PROJECT GOAL: To migrate off of a homegrown

supply chain planning (SCP) solution to improve the forecast accuracy on reagent and consumable planning BUSINESS IMPACT: The entire supply chain has realized benefits from implementing the software, as the forecasting methodology has improved; reporting and analysis are more efficient; and transparency and collaboration have improved by having the details of the data available, which enabled the team to make precise decisions more rapidly. The customer aimed to meet or exceed 85 percent forecast accuracy, and now is consistently at or above that figure throughout their global demand planning organization.

ENABLER: ELEMICA — www.elemica.com CUSTOMER: Top 10 global tire and rubber company SOLUTIONS: Elemica’s Supply Chain Operating

Network, Elemica’s Supplier Management Suite, Elemica’s VMI and Logistics Management and Risk Management PROJECT GOAL: Automate the procure-to-pay business process for the purchase of direct materials in the company’s rubber divisions BUSINESS IMPACT: The company significantly increased productivity and improved operational efficiencies. Other improvements include: improved trading partner relationships, on-time payments improved communications, less work for both sides, and better priority from supplier, who can help address 8

transportation capacity issues. The company also experienced efficiency gains upstream and unlocked further benefits downstream, such as the ability to calculate the total cost of ownership, increased supplier performance visibility, standardized processes, eliminated paper and freed-up IT resources. The company says the system has allowed them to do a better job of supply chain planning, and reduced its need for “firefighting.” The use of expedited freight, for example, has dropped significantly over the last couple of years, with the company’s ability to detect problems earlier. It has realized seven-digit savings in that area alone. And while headcount reduction wasn’t the goal from the start, the company has saved additional money by reducing the number of new hires it would otherwise have needed to keep pace with growth.

ENABLER: INSITE SOFTWARE — www.insitesoft.com CUSTOMER: Express Pipe & Supply SOLUTIONS: InsiteCommerce Suite, Insite Software PROJECT GOAL: Provide a digital e-commerce

experience for plumber contractors and others working with local branch teams of Express Pipe BUSINESS IMPACT: Due to the capability of the new e-commerce solution, the company has already recovered a previous customer that represented more than $1 million in sales per year. In addition, Express Pipe expects to increase annual sales by 10 percent, based on its new e-commerce functionality, which is not a small number considering the company generates more than $1 billion per year in annual sales. Another key benefit is that Express Pipe is now able to realize revenue from change orders based on product availability, accessible real time via the new e-commerce site. Beyond the considerable realized and planned growth in sales due to the new e-commerce solution, the increased efficiency for sales representatives and CSRs has been immediate.

ENABLER: INTELLIGRATED — www.intelligrated.com CUSTOMER: Bee Sweet Citrus SOLUTIONS: Two Alvey 910 series high-speed in-line

palletizers, 28 lanes of Accuglide accumulation conveyor, 215 feet of pallet conveyor, two Orion stretch wrappers, SSI mezzanine, and IntelliSort sliding shoe sorter PROJECT GOAL: Switch from manual palletizing to an automated palletizing system, while maintaining flexibility to accommodate diverse product and packaging requirements BUSINESS IMPACT: The facility continues to meet its throughput target of 50,000 cartons per day, but does so far more efficiently with fewer and shorter shifts. Palletizing labor requirements dropped from 60 to 10 employees—an 80 percent reduction. The new system enables employees to avoid the most stressful manual work, alleviating lifting and twisting, while reducing congested forklift traffic. Furthermore, as the minimum wage in California rises, the timetable for Bee Sweet’s

SUPPLY & DEMAND CHAIN EXECUTIVE | June 2017 | SDCExec.com

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2017 SDCE 100 return on investment continues to shrink. Rather than an initial estimate of seven years, they expect a timeframe closer to five or six years. The overall solution design also provides for additional automation, with room for a third palletizing line.

ENABLER: INTRIGO SYSTEMS INC. — www.intrigosys.com CUSTOMER: Albemarle Corporation SOLUTIONS: SAP IBP Software PROJECT GOAL: Reduce working capital

requirements, enhance visibility for sales and business forecasting, and develop and implement global S&OP process with tighter integration between manufacturing planning BUSINESS IMPACT: Defined a process to review all demand signals and historical data, and reduced S&OP cycle time from four weeks to two and a half weeks.

ENABLER: JOHN GALT SOLUTIONS — www.johngalt.com CUSTOMER: Continental Tire SOLUTIONS: Atlas Planning Suite PROJECT GOAL: Implement a planning process for vendor managed inventory

BUSINESS IMPACT: Atlas Planning Suite allowed Continental Tire to build a robust planning process centered around an accurate sales forecast. Orders are now placed daily based on point of sale (POS) data, such as sales data and inventory levels. Additionally, Continental Tire can now set strategies for each individual product and category with seasonal safety stock. The planners can manage by exception to meet demand and manually make changes to the forecast if certain SKUs sell faster than expected. ENABLER: KENANDY — www.kenandy.com CUSTOMER: Primus Power SOLTUIONS: Kenandy Cloud ERP PROJECT GOAL: Implementation of first ERP system BUSINESS IMPACT: An engineer can now

implement a product idea or improvement in the product lifecyle management (PLM) system, and within minutes, the new part number is generated. Instantly, people can find parts because there is a pricing history for it, a supply history. People no longer have to ask for status updates on parts. They can find the purchase order and the promised delivery date. Workflows that used to be difficult to track now can be efficiently executed by engineers.

We make a big deal over the tiniest items. Old Dominion’s focus on premium service means every item arrives with one of the lowest claims ratios and one of the best on-time records in the industry. OD Domestic offers: • More than 225 service centers nationwide • Competitive transit times and pricing • Proactive shipping solutions

For more information, visit odfl.com or call 1-800-235-5569. Old Dominion Freight Line, the Old Dominion logo, OD Household Services 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. © 2017 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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SDCE 100 » 2017 ENABLER: KUEBIX — www.kuebix.com CUSTOMER: Holman Parts Distribution SOLUTIONS: Kuebix Salesforce PROJECT GOAL: Create visibility by capturing costs,

tracking information and invoice auditing within the logistics network BUSINESS IMPACT: The return on invement (ROI) has been a savings of $100,000 annually, due to the information being displayed to show the best carrier for the shipment based on price and shipping times. The rejection of incorrect invoices also has helped add savings to the freight expenses. A time savings of 6 minutes per shipment has been recorded; a shipment now takes about 2 minutes to process utilizing the TMS. Tracking time frames also have been shortened to a 10-20 second process. In addition to financial results, the TMS provided visibility into shipping volume and spend that Holman never had before. They now have the ability to select the best price from freight providers, audit the invoice on the payment side, and report on volume and spend.

ENABLER: LOGISTICS PLUS INC. — www.logisticsplus.net CUSTOMER: Fortune 500 power and energy company SOLUTIONS: 2x trailers and 16-axeled modular lowbeds PROJECT GOAL: Deliver a 200-ton stator (the stationary portion of an electric generator) from Gdynia, Poland, to the Yatagan Thermal Power Plant in Mugla, Turkey BUSINESS IMPACT: Cargo was delivered on-time and intact according to the desired delivery specifications.

ENABLER: NEOVIA LOGISTICS — www.neovialogistics.com CUSTOMER: Global automotive manufacturer SOLUTIONS: SAP/SPP (Service Parts Planning) PROJECT GOAL: Improve parts availability, lower

inventory and improve cash flow across the supply chain BUSINESS IMPACT: The SPP implementation was a resounding success, with no major system outages or negative impacts to customer service. Neovia exceeded customer expectations and drove significant results for the client’s distribution network, including a seamless transition to the new inventory planning system, a 7.1 percent reduction in total supply chain inventory, $20 million improved cash flow, 0.5 percent increase global network facing fill, 20 percent reduction in dealer back orders, 7.2 percent forecast accuracy improvement, and 30 percent reduction in air freight costs.

ENABLER: ONPROCESS — www.onprocess.com CUSTOMER: Fortune 500 communications provider SOLUTIONS: OnProcess’ asset recovery managed

services leveraging OnProcess’ proprietary analytics and visibility platform PROJECT GOAL: Increase set-top box recovery, so the provider could refurbish older ones instead of purchasing new boxes, saving millions of dollars annually 10

BUSINESS IMPACT: The client gained a 14-point lift in set-top box returns from voluntary disconnected customers and an 18-point lift in non-pay recovery. This enabled them to save money, plus generate revenue with existing assets, instead of stranding those assets and their revenue potential in the field. Additionally, based on the provider’s volume, OnProcess enabled $60 million in annual cost avoidance. The returns process also is much simpler for consumers, who no longer have to find a shipping container, package up their set-top boxes and bring them to the provider or UPS. Instead, every disconnecting customer, whether voluntary or non-pay, is sent a recovery kit that includes a fitted shipping box and prepaid UPS label. ENABLER: OPTRICITY — www.optricity.com CUSTOMER: Leading global logistics company and

third-party logistics provider (3PL) SOLUTIONS: OptiSlot DC™ PROJECT GOAL: Slot product within the warehouse by category and velocity, and support the building of more stable pallets BUSINESS IMPACT: The team was able to balance their competing goals and constraints, and implement their new and refined slotting strategy to achieve a high percentage of productivity improvement, while also supporting the ability to build more stable pallets within each chamber. The company achieved a 42 percent increase in lines per hour (increase in getting product out of the warehouse and on the road) and a 39 percent reduction in travel time to pick orders.

ENABLER: REDWOOD LOGISTICS — www.redwoodlogistics.com CUSTOMER: Ariens Company SOLUTIONS: RedwoodConnectSM PROJECT GOAL: Successfully connect Ariens with

their distribution and warehousing partners, material suppliers, and customers by integrating their multiple disparate systems BUSINESS IMPACT: Through enhanced visibility and control Ariens’ transportation costs reduced by more than $1.4 million in year one. Additionally, with the automation and optimization achieved via the TMS and Redwood’s freight managers, Ariens increased their cycle time, decreasing the time from shipment to customer invoicing.

ENABLER: ROAMBEE — www.roambee.com CUSTOMER: Roambee Corporation SOLUTIONS: Internet of Things (IoT) sensors, cellular

infrastructure, sensor analytics platform and open APIs PROJECT GOAL: Improve supply chain efficiency with better on-time delivery and quality of products BUSINESS IMPACT: Eliminated unexpected disruptions, and provided better real-time response to delays, temperature changes and route deviations. ROI

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2017 SDCE 100 gained through reduced insurance premiums, reduced retailer claims and reduced shipment expenses (due to better in-transit times). Plus, enhanced customer satisfaction due to transparency and immediacy of information on deliveries.

ENABLER: SPENDWORX LLC — www.spendworx.com CUSTOMER: City government SOLUTIONS: Self-Service Procurement Analytics PROJECT GOAL: Implement a self-service analytics

solution to provide the city’s purchasing division with accurate and timely information for strategic procurement decision making BUSINESS IMPACT: From total annual city expenditures of over $1 billion, approximately $600 million of currently unmanaged procurement spend was identified as addressable through strategic sourcing. Subsequent analysis of 16 individual spend categories revealed total potential cost savings in the range of $50 to $90 million. Implementation of the solution enabled centralized reporting of spend for over 1,200 supplier contracts, most of which were managed locally by city departments. Annualized savings of $3 to $5 million were identified from improved contract compliance

opportunities. The market intelligence functionality of the solution identified numerous situations where supplier price increases were not supported by market trends. In one case, a paper supplier increased price by 11 percent over a 12-month period, when the corresponding market index reported by the solution had fallen by 4 percent over the same period. In this and other similar cases the purchasing division was able to secure immediate price reductions, and in several cases, also obtain cash refunds to compensate for the unsupported price increases.

ENABLER: SYNCHRONO — www.synchrono.com CUSTOMER: Orbital ATK SOLUTIONS: SyncKanban pull-based ekanban

replenishment and supply chain collaboration software from Synchrono PROJECT GOAL: Right-size inventory levels, and reduce the number of systems and steps involved in the materials replenishment process BUSINESS IMPACT: In implementing SyncKanban, the company’s areospace structures division (ASD) was able to eliminate 16 systems/steps in the replenishment process. Lost productivity due to material shortage also improved, and overall, there is far less disruption on the

When you’re driven by details, the world is a smaller place. Old Dominion simplifies global shipping by doing more than delivering freight. Our focus on premium service means every shipment arrives with one of the lowest claims ratios and one of the best on-time records in the industry. OD Global offers: • Personalized, single point of contact for status on all shipments • Nationwide Container Drayage from most major rails and ports • Direct service to or from Canada, Mexico, Puerto Rico, Alaska and Hawaii

For more information, visit odfl.com or call 1-800-432-6335. Old Dominion Freight Line, the Old Dominion logo, OD Household Services 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. © 2017 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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SDCE 100 » 2017 production floor. After three months on SyncKanban software, ASD is projected to recognize a cost avoidance of $9.7 million over the life of the program. Their scrap due to out-life materials is now nearly zero.

ENABLER: TRADESHIFT — www.tradeshift.com CUSTOMER: DHL SOLUTIONS: Tradeshift Pay PROJECT GOAL: Onboard around 5,000 of DHL’s

suppliers, and enable digital transactions on a single platform BUSINESS IMPACT: For the five focus countries this project launched in, DHL set a key performance indicator (KPI) of 50 percent. The project now shows above 50 percent electronic invoices. It was achieved by 2015. Through use of the Tradeshift platform, DHL has converted 20 to 30 percent of invited suppliers every month.

ENABLER: TRANSPLACE — www.transplace.com CUSTOMER: Transplace’s North American Control Tower SOLUTIONS: MapQuest, Aeries Weather,

ElasticSearch, TMS, Java PROJECT GOAL: Provide a snapshot of customer’s current freight with predictive analytics, weather alerts and traffic alerts

BUSINESS IMPACT: The North American Control Tower has had a positive impact on the customer. Customers now can proactively know what shipments will most likely be affected by weather delays, and can keep track of arrival and departure issues. This information can be relayed back to the drivers to either take alternate routes or expedite because of known delays. ENABLER: TRANSPORTATION INSIGHT — www.transportationinsight.com CUSTOMER: National retailer of athletic apparel,

footwear and accessories SOLUTIONS: Transportation Insight’s integrated Enterprise Logistics solution PROJECT GOAL: Optimize logistics operations to directly align with the retailer’s long-term strategy of achieving rapid, efficient growth through expanded e-commerce offerings BUSINESS IMPACT: The retailer has developed a more effective shipping program, a competitive market position and total transparency into shipping data. Annual savings reached more than $9 million. Results include: increased visibility of carrier performance and package-level transportation costs to enable more informed executive decision-making; improved customer service, with added insight into service failures and operational performance gaps; reduced parcel and freight billing errors through audit process; optimized utilization of parcel and less than truckload (LTL), a critical factor in selling commercially versus direct to the customer; established ideal carrier selection services based on the retailer’s shipping profile; and ensured smooth transition from B2B relationships to e-commerce operations by leveraging industry knowledge, understanding the carrier network and knowing the retailer’s prior metrics.

ENABLER: UPLAND SOFTWARE INC. —www.uplandsoftware.com CUSTOMER: Trane Residential Systems, an

www.intrigosys.com

Ingersoll Rand Company (IR) SOLUTIONS: Ultriva Collaborative Supply Portal (CSP) Module with external supplier e-Kanban, Ultriva RFID Module for 3PL, and Ultriva Lean Factory Management with internal e-Kanban module with production leveling, sequencing and scheduling PROJECT GOAL: Establish LEAN supply, distribution and factory processes and systems across IR Trane’s extended enterprise value chain BUSINESS IMPACT: More than $750 million in annual material spend managed in CSP. More than 20,000 purchase order (PO) requisition and receipt transactions between Upland Ultriva and Oracle, and more than 10,000 inventory transfers from Ultriva and Oracle. A 98 percent RFID success rate, and an estimated 25 percent reduction in inventory.

SUPPLY & DEMAND CHAIN EXECUTIVE | June 2017 | SDCExec.com

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MORE SDCE 100 RECIPIENTS WW3rd Wave, www.3rdwave.co WW4flow, www.4flow.com WW4SIGHT Supply Chain Group, www.go4sight.com WWA. Duie Pyle, www.aduiepyle.com WWAgileapt Solutions, www.procurengine.com WWAmazing Print, www.amazingprint.com WWArgus Logistics, www.argussolutions.net WWBAM, www.bamwire.com WWBasware, www.basware.com WWBeelogix, www.beelogix.ca WWC3 Solutions, www.c3solutions.com WWCargo Chief, www.cargochief.com WWCBX Software, www.cbxsoftware.com WWCelonis, www.celonis.com/en WW Censeo Consulting Group, www.censeoconsulting.com WWChainalytics, www.chainalytics.com WWCHEP Pallecon Solutions, www.cheppallecon.com

WWClearMetal, www.clearmetal.com WWConvey, www.getconvey.com WWCorcentric, www.corcentric.com WWCorporate United, www.corporateunited.com WWCoyote Logistics, www.coyote.com WWDiCentral, www.dicentral.com WWDMW&H, www.dmwandh.com WWE2open, www.e2open.com

WWEfficio Consulting, www.efficioconsulting.com WWenVista, www.envistacorp.com WWEpicor Software Corporation, www.epicor.com WWExtenData, www.extendata.com WWFortna Inc., www.fortna.com WWFourKites, www.fourkites.com WWGEP, www.gep.com WW Greybeard Advisors LLC, www.GreybeardAdvisors.com WWHaven, www.haveninc.com WWHighJump, www.highjump.com WWInmar, www.inmar.com WWIntegration Point Inc., www.integrationpoint.com

WWInvata Intralogistics, www.invata.com WWJVKellyGroup, www.jvkg.com WWKinaxis, www.kinaxis.com WWKNAPP Logistics Automation, www.knapp.com WW LexisNexis Business Insight Solutions, www.lexisnexis.com WWLiquidity Services, www.LiquidityServices.com WWLogility, www.logility.com WWMatchBack Systems, www.matchbacksystems.com WWMemorial Sloan Kettering Cancer Center, www.mskcc.org

WWModusLink, www.moduslink.com WWMyRouteOnline, www.myrouteonline.com WWNext Generation Logisitics, www.nextgeneration.com

WWNGC Software, www.ngcsoftware.com WWOpen Sky Group, www.openskygroup.com WWOracle, www.oracle.com WWPace Harmon, www.paceharmon.com WWPINC, www.pinc.com WWPOOL4TOOL, www.pool4tool.com WWPROACTIS, www.proactis.com WWProcurify, www.procurify.com WWQuintiq, www.quintiq.com WWRisk Methods, www.riskmethods.net/en WW Saddle Creek Logistics Services, www.sclogistics.com WWSAP Ariba, www.ariba.com WWSmartDrive Systems Inc., www.smartdrive.net

WWSource One Management Services LLC,

www.sourceoneinc.com WWSpend Management Experts, www.spendmgmt.com WWSPS Commerce, www.spscommerce.com WWSupply Vision, www.supply-vision.com WWSynergy North America Inc., www.snapfulfil.com/us WWSyspro, www.syspro.com WWUNEX Manufacturing, www.unex.com WWWarehouse Mobile Solutions, www.warehousemobilesolutions.com WWWestfalia Technologies, Inc., www.westfaliausa.com

We’re on time when time is scarce. When you need something shipped immediately, Old Dominion Expedited delivers. Our focus on premium service means every shipment arrives with one of the lowest claims ratios and one of the best on-time records in the industry. OD Expedited offers: • Next-day arrival • Delivery at a guaranteed time • Weekend Promise: guaranteed Friday to Monday delivery

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ADVERTORIAL

DRIVEN BY COMMITMENT TO INNOVATION AND SERVICE

ver the past 16 years, John Costanzo has grown Purolator International from a small forwarder to a leading provider of third party logistics services in North America. Under his leadership, the company has expanded into 30 U.S. markets, doubled sales every five years, and significantly expanded its services portfolio. Today, Purolator International serves diversified clients, from manufacturers and distributors, health science companies, and large chain retailers to companies specializing in e-commerce. This success did not happen by chance. Rather, Costanzo’s commitment to innovation and service has driven Purolator International forward. Never content with the status quo, Costanzo continually inspires employees to come up with creative ways to help clients better serve their customers.

EVOLVING SERVICES TO MEET CUSTOMER’S CHANGING NEEDS E-commerce has changed the way people shop. It allows B2C organizations to reach markets well beyond their traditional sales regions with very little financial outlay and zero physical presence in that market. By offering an expertise in cross border shipping, Purolator International had a unique opportunity to help U.S. based retailers enter the Canadian marketplace through ecommerce sales. Costanzo spearheaded the development and introduction of Purolator International’s ecommerce solution, PuroPost. The service offers guaranteed delivery to all residential locations in Canada within 2-8 days, due to Purolator International’s unique relationship as part of the Canada Post Group of Companies, the country’s national postal service. Shipments are picked up, forwarded and pre-cleared 14

into Canada before arrival at the border, then inducted deep into the Canada Post network for delivery by the consumer’s local mail carrier. No other logistics provider offers a similar service option. Its launch in 2013 has proven to be highly successful for Purolator International, with B2C commerce now making up half its current shipment volume. To build on this success, Purolator International enhanced the PuroPost service offering in 2016 with a faster delivery option, PuroPost Plus. This service accommodates customer demand for even faster delivery offering all of the benefits of PuroPost along with an enhanced 2-5 day delivery. Costanzo’s responsiveness to client needs is also apparent in the way solutions are tailored to meet specific markets – such as Purolator International’s new aircraft-on-ground (AOG) service for the aviation industry. Since an airline, aircraft manufacturer or one of their suppliers never knows when or where a breakdown may occur, a guaranteed solution for an immediate parts delivery must be readily available. Purolator International’s air and ground fleet network offers the capability to make that solution possible, meaning aviation professionals can trust Purolator International to make the urgent delivery on time, every time. In 2017, Costanzo is committed to expanding Purolator International’s intra-U.S. capabilities. Though Purolator International has acted as a forwarder from the beginning, the bulk of the business has been focused on cross border trade with Canada. In 2017, he began to raise awareness of Purolator International’s Expedited Forwarding services for the intra-U.S. market, which offer the capabilities and coverage of the large providers, combined with the elevated level of personal service and flexibility of being a niche provider. Purolator International’s Expedited

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Forwarding service provides broad coverage both in the air and on the ground, and utilizes a connected distribution network made up of hubs, airports, offices and qualified transportation partners to achieve complete coverage of the U.S. and Canada. Moreover, Purolator offers an on average, on-time arrival rate of 99.4% and competitive pricing.

COMMITTED TO HIS CUSTOMERS’ SUCCESS Beyond the suite of services, Costanzo works with his employees to ensure they are delivering the best quality service to help customers control shipping costs while meeting expectations among their customers for fast, on-time delivery. This is especially true regarding costs associated with an integrated omni-channel distribution strategy. All businesses – large and small – must meet strong customer expectations for “all of the above” options with regard to fulfillment and delivery options. Here are some of the strategies Costanzo utilizes in creating a cross border logistics and supply chain plan for customers shipping to Canada: Consolidation. Not every logistics company has the ability to consolidate shipments, but this is something at which Purolator International truly excels. Through consolidation, smaller parcel and LTL shipments are combined into a single larger shipment. This single consolidated shipment allows for lower shipping rates and, for international shipments, significantly lowers the cost to clear customs at the border. Route optimization. Under Costanzo’s leadership, Purolator International has made significant investments in technology which, among other things, have added tremendous efficiency to ground solutions. For example, it wasn’t that long ago when distribution center (DC) stopovers were “normal” parts of a transit plan. A shipment would be placed on a truck and forced to travel to a DC that could be hundreds of miles out of the way, since that’s what “best available” thinking mandated. Now, thanks to technology and a customer focused approach,

Purolator International shipments travel via the most logical solution, and can often skip the unneeded DC stopover. In fact, Costanzo frequently uses the term “flying trucks” to describe the speed with which Purolator International can transport a shipment – via ground – into Canada. Superior access and coverage. Under Costanzo’s leadership, Purolator International has developed an extensive, flexible distribution network in the U.S. As such, clients have access to a broad range of service options – from expedited forwarding to standard ground services– and are not locked into the “one size fits all” approach that describe many competitors’ service offerings. Last mile service. Arguably the most critical phase of the entire supply chain process is the last mile - the point at which a consumer either has a positive or poor experience. Costanzo recognizes the enormous trust this requires from customers, and therefore has invested in ensuring flawless last mile deliveries by creating a proprietary technology platform that integrates directly with a client’s existing IT platform to provide access to tracking data and delivery information from inception to final delivery. Customs expertise. Purolator International’s expertise in the Canadian market also extends to the intricacies of the border clearance process. Unlike most of its competitors, Purolator International team members take the time to evaluate each shipment and ensure that (a) the right tariff classification is assigned; (b) eligibility has been determined for free trade agreement benefits; (c) the proper terms of service (Incoterm) have been assigned; and (d) if applicable, that paperwork is filed to allow for ease of duty drawback. Each of these steps takes extra time, but can have tremendous benefit to customers overall experience in fulfilling their orders. Costanzo understands the importance of listening to customers and developing solutions that fix their problems, not just offering today’s “latest and greatest.” He remains enthusiastic about the future of Purolator International, and of the U.S. and Canada trade relationship. ■

PurolatorInternational.com 888-511-4811 SDCExec.com | June 2017 | SUPPLY & DEMAND CHAIN EXECUTIVE

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FEATURE

By Ronnie Garrett

Wal-Mart:

GIVE ME A GIGATON

Global retail giant asks its suppliers to tackle sustainability efforts to eliminate one gigaton of emissions from the supply chain by 2030.

n June, President Donald Trump announced his intentions to withdraw the United States from the Paris climate accord. In a speech from the Rose Garden, the president stated his belief that the 2015 pact imposes unfair environmental mandates on American businesses and workers. However, environmentalists working for climate change have expressed a different point of view, namely that the decision will weaken efforts to prevent global warming. As all of this plays out on the political stage, the private sector is marching to a different environmental drum. “We are seeing some real momentum in the private sector around trying to tackle climate change. I’m optimistic that the AT A GLANCE private sector is stepping up, not backing down, and is sending an important message that they see climate change as a critical The reduction in emissions Wal-Mart threat to their businesses,” says is asking from suppliers by 2030 Sheila Bonini, who leads the Private Sector Engagement team at the World Wildlife The number of suppliers participating Fund (WWF). in the launch of Project Gigaton Dexter Galvin, who heads the supply chain program at CDP (formerly the Carbon Disclosure Project), agrees with The average percentage of emissions Bonini’s sentiment but cautions embedded in a company’s supply chain

PROJECT GIGATON

1 GIGATON

250

80%

that companies still have a long way to go. He states corporations, while engaged in addressing climate change internally, have done little to impact carbon emissions in the supply chain, adding that few companies are actually engaging suppliers in “any meaningful way” on climate change. It appears, however, the tides of change are sweeping in as Wal-Mart announces its intentions to engage suppliers in reducing emissions in their own operations and supply chains. Dubbed Project Gigaton, the initiative will provide suppliers with an emissions reduction toolkit in an effort to eliminate one gigaton of emissions from the supply chain by 2030. “That is equal to three times the annual emissions of the state of California. And is the equivalent of taking more than 211 million vehicles off of U.S. roads and highways for a year,” Wal-Mart reports in a press release. The measure marks a giant leap toward making an impact on global warming. Greenbiz.com reports that in 2014 the global carbon emissions from fossil fuel use was 9.75 gigatons. To limit global warming by 2 degrees Celcius, as spelled out in the Paris Accord, the world must not exceed a carbon budget of 335 gigatons in the future. In a world where every gigaton counts, and up to 80 percent of an organization’s emissions are embedded in the supply chain, Project Gigaton could pave the way for a greener tomorrow. “Wal-Mart is the largest global retailer. The impact they can have if they can really get their suppliers on board is tremendous,” says Bonini.

SUPPLY & DEMAND CHAIN EXECUTIVE | June 2017 | SDCExec.com

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“Wal-Mart is the largest global retailer. The impact they can have if they can really get their suppliers on board is tremendous.”

Elizabeth Sturcken, managing director of corporate partnerships for the Environmental Defense Fund (EDF), one of Wal-Mart’s partners in the Gigaton challenge, adds, “Project Gigaton shows real leadership in engaging the supply — SHEILA BONINI, chain. It is critical, WORLD WILDLIFE FUND and it is needed, especially today when the federal government appears to be taking a step backward.”

PUTTING THE PIECES IN PLACE Wal-Mart serves 260 million customers per day in 11,695 stores in 28 countries, and has e-commerce networks in 11 countries. Its carbon footprint is extensive, but the retail giant understands its environmental impact and has been hard at work for some time to reduce its Scope 1 and 2 emissions up to 18 percent by 2025. Project Gigaton simply attacks the retailer’s remaining bucket of emissions—those from upstream and downstream Scope 3 sources. “We are proud of the improvements we’ve made in reducing our own emissions, but we aim to do more,” reported Kathleen McLaughlin, senior vice president and chief sustainability officer for Wal-Mart, in an official press release about Project Gigaton. The company plans to work with 250 of its top global suppliers, working across multiple product categories, to employ these targets in reducing supply chain emissions. Laura Phillips, senior vice president for global sustainability, reported to GreenBiz.com, “Our goal is to [eventually] have as many suppliers as want to join in. This is a big tent, and there is a part for everyone to play.” Doug McMillon, CEO of Wal-Mart, told attendees at the company’s annual Milestone Summit that Project Gigaton requires the entire value chain to be optimized, which includes considering human rights, environmental impacts, transportation and logistics, product design, sales,

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and disposal of products at the end of their lifecycle. “If you think through the whole system you end up helping all stakeholders,” McMillon said. To that end, the company has identified six key pillars to help companies hit the Gigaton mark, states Sturcken. These include helping suppliers target emissions reductions in energy, agriculture, waste, packaging, deforestation, product use and design. To help suppliers make commitments to emission reduction or establish emission reduction projects, Wal-Mart collaborated with WWF and EDF, and other like-minded organizations, to

Wal-Mart already is the No. 1 commercial solar energy user in the United States. They are on track to double their number of on-site solar energy projects at Wal-Mart stores, Sam’s Clubs and distribution centers by 2020. That is about 480 new sites.

Why B2B and B2C eCommerce Experiences are Not Coverging View the whitepaper online at: insitesoft.com/diverge

To learn more about Insite, visit us online at www.insitesoft.com or call 866-746-0377

SDCExec.com | June 2017 | SUPPLY & DEMAND CHAIN EXECUTIVE

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FEATURE “Project Gigaton shows real leadership in engaging the supply chain. It is critical, and it is needed, especially today when the federal government appears to be taking a step backward.” — ELIZABETH STURCKEN, ENVIRONMENTAL DEFENSE FUND

build a set of tools to get suppliers to voluntarily participate, and help them hit the gigaton reduction target. According to Bonini, the toolkit will be a digital resource center filled with research materials, videos and other information to help suppliers on their way to emissions reductions. It is here that they will learn how they start their journey toward meeting an energy reduction target, working on deforestation, addressing food waste and other issues.

Bonini adds there is a great amount of sophistication among Wal-Mart suppliers, with many of them, such as PepsiCo, Dell and General Mills, already using science-based targets. The online toolkit offers some simple guidance, but also provides case studies from these forward-thinking companies. According to Bonini, one of the first challenges for many corporations can be finding out just who their suppliers are farther downstream to get a sense of the risks they pose in the six identified areas. For this reason, the toolkit provides guidance to get more visibility into their supply chains. “It’s very difficult to tackle the emissions problem if you lack visibility into your supply chain and are unsure exactly where the problem sits,” she says. “Once they have visibility, companies need to set policies to get the sustainability results they want. How to enforce that is also very difficult; that is making sure suppliers several links back in your supply chain are actually adhering to the policies you set.”

SUSTAINABLE SUPPLIERS ALREADY ENGAGED

SUPPLY & DEMAND CHAIN EXECUTIVE | June 2017 | SDCExec.com

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Though Wal-Mart has not made the Gigaton challenge mandatory for its suppliers, the company has a history of getting voluntary compliance from them in its other sustainability initiatives. In 2015, the company put a spotlight on suppliers that stood out on sustainability by dedicating a section of its website to those who made the cut and explaining the reasons for putting them on the list. Today, more than 3,000 products are tagged with the company’s “sustainability leader” badge. One of Wal-Mart’s existing sustainability leaders, Land O’Lakes Inc., a leading supplier of butter, snack and deli cheeses and refrigerated desserts, became one of the first to join the Project Gigaton initiative. The food company reported in a press release that the initiative fits well with its existing efforts to be more sustainable in its Land O’Lakes SUSTAIN program. With Project Gigaton, the company will assess 100 percent of its farmermember milk supply, where it will focus on continuous improvement of enteric emissions and yield potential, including greenhouse gas emissions manure systems and securing 20 million acres on the Land O’Lakes SUSTAIN Agronomy platform to continuously improve fertilizer optimization, soil health and water management.

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FEATURE Land O’Lakes reports ground, particularly in it will meet their Gigaton challenging areas like commitments by equipping deforestation,” Bonini farms and ag-retailers with explains. insights, technology and tools She adds they will to implement and track need to work toward “We are proud of the improvements an agreement on on-farm sustainability practices. The company to ensure we’ve made in reducing our own metrics hopes to reduce 10 that apples to apples million metric tons emissions, but we aim to do more.” comparisons are of greenhouse gas being made. — KATHLEEN MCLAUGHLIN, WAL-MART emissions by 2025. Though work remains, Carter Roberts, president and CEO of TOOLS TO TRACK RESULTS WWF, remains confident on the final results of As it has done in the past, Wal-Mart plans to Project Gigaton. “Project Gigaton is a testament highlight top performers in Project Gigaton by to the transformative impact that leaders of employing survey tools from The Sustainability the industry can have on our greatest common Consortium to track supplier performance and results. challenges. As more companies follow in the The program will rely on existing thirdfootsteps of Wal-Mart and their suppliers, we can party verified systems to make sure that what’s achieve the critical mass needed to address climate reported is actually happening. “There needs to change. This is an important step toward a safer be some verification of what’s happening on the and more prosperous future.”

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SDCExec.com | June 2017 | SUPPLY & DEMAND CHAIN EXECUTIVE

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MADE IN AMERICA By Jen Bradley

International Warehouse Automation C

KEEPS OPERATIONS IN THE S

While it’s one thing for OPEX products to be American-made, company leaders say it’s quite another to stay American-made in today’s economic climate.

“I

t was during the time you could tape a dime to a postcard and send it in, then get 12 albums,” says James Liebler, vice president of corporate and legal affairs for OPEX Corporation. The time Liebler is referring to is the 1970s, when OPEX’s current chairman of the board, Al Stevens, was given the task of automating the mail processing system in Columbia Records’ Indiana mailroom. Stevens came across an article in the The Wall Street Journal written about OPEX, which had just began manufacturing mail-opening equipment. “That intrigued him, as he immediately understood its enormous potential to change the industry,” Liebler explains. Columbia Records bought two of the first systems (OPEX 4.0) for $50,000 each. The systems used a conveyor belt to feed open envelopes to operators seated at work stations. Stevens eventually took a job as the sales manager at OPEX, and when the company later faced financial ruin, he and his wife Joanna mortgaged everything they owned and bought the company, turning OPEX into a successful enterprise that celebrated its 40th anniversary in 2015. His son David Stevens is the current president and CEO, while a second son, Mark Stevens, is the chief operating officer of this New Jersey-based, American-

made mail processing and warehouse automation manufacturing company.

CARRYING FORWARD THE TECHNOLOGY TRADITION As the industry evolved, OPEX moved from handling mail to developing mail sorters and document scanners. In 2012, the company became heavily involved in warehouse automation by utilizing technology it had used in its mail processing systems, and applying it to tasks such as inventory fulfillment and e-commerce. Liebler says that while OPEX still manufactures a large variety of mail handling equipment, its engineers have evolved that technology into several proprietary applications that specifically address needs that are unique to warehouse automation. “At our core, we’re all about looking at processes for handling things, to see how we can expedite those processes and eliminate unnecessary steps,” he says. “It’s the same core principle of looking at a process and paring it to the essential elements.” Two new products were recently released at the ProMat 2017 materials handling trade show in Chicago—the goods-to-person warehouse automation technology, Perfect Pick HD, and Sure Sort, a new sorting technology that replaces antiquated put wall processes. Perfect Pick HD provides twice the storage of the single Perfect Pick aisle, while the Sure Sort is a smaller item (under 5 pounds) robotic sorting system that automates sorting at a rate of up to 3,600 items per hour.

SUPPLY & DEMAND CHAIN EXECUTIVE | June 2017 | SDCExec.com

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n Company

managing a mail room of Columbia Records’ size, that responsiveness of vendors, product reliability and the ability to offer targeted solutions is essential for business success. “His experience taught him that the best way to do that was to be as close to the PROUD TO STAY customer as possible. By manufacturing AMERICAN-MADE here in the United States, we are able While it’s one thing to be to very quickly respond to a customer’s American-made, Dave Andrews, needs, and if they come to us with a facilities manager for OPEX, says it’s question, to really understand what’s quite another to stay American-made behind that question, and then address in today’s economic climate. a design need quickly,” Liebler says. “I think that’s a really important Supporting the community where discussion, and something we’re all OPEX is headquartered extends to proud of here,” he notes. “While cultivating local talent and providing there are many options for overseas intensive training. “As a result, we production of OPEX products, the develop highly qualified employees company has made it a priority to who choose to stay here,” Andrews provide local jobs, as well as retain local explains. “I think we’ve worked really control of manufacturing quality. hard to provide an atmosphere that “We prefer to use local vendors for encourages growth.” both parts and raw materials,” Andrews “We cultivate the talent we have adds. “This helps to drive the economy right here in our own backyard,” adds in our own geographic area and allows Liebler, explaining that OPEX recruits us to provide unsurpassed innovation from trade schools, junior colleges and and quality.” large universities. The company also Liebler concurs. He says Stevens offers apprenticeship and mentorship knew from his own experience in programs. “We take pride in the fact that we find At our core, we’re all about looking at Americans, employ and train processes for handling things, to see Americans Americans,” he how we can expedite those processes concludes, quickly adding: “That’s and eliminate unnecessary steps. not to say — JAMES LIEBLER, VICE PRESIDENT OF CORPORATE we ignore AND LEGAL AFFAIRS, OPEX CORPORATION the rest of the world. It’s just that when it comes to our manufacturing needs, we know we are best served staying local whenever possible.”

E STATES

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OPEX Corporation has long valued sustainability and Net Zero Energy Building Certification. Two Moorestown buildings hold this certification, operating solely on solar enery.

SEEKING SUSTAINABILITY The OPEX leadership team has long held the goals of sustainability and Net Zero Energy Building Certification for its facilities. Two Moorestown buildings, a total of 250,000 square feet of space, currently hold this certification, operating solely on solar energy. The first system was installed in April 2012, and at the time, it was the largest installation statewide for a privately held manufacturing company. Another Net Zero facility is currently being renovated in nearby Pennsauken, New Jersey. Additionally, stewardship is important to OPEX’s corporate objectives, from creating environmentally-friendly facilities to investing in its employees and local communities. Andrews explains that OPEX understands its core areas of expertise and makes decisions with care. Liebler says that a main rule OPEX follows is to not manufacture anything that is environmentally destructive or dangerous, such as PC boards. “We subscribe to the idea that we’ve been given certain resources to take care of, to shepherd and be accountable for,” he adds. “That includes the environment around us and knowing we should not waste those resources. This all goes back to Al Stevens’ vision for what a company should be.” ABOUT THE AUTHOR JEN BRADLEY is a freelance writer who specializes in aviation, agriculture and supply chain topics. She is based in Fond du Lac, Wisconsin.

SDCExec.com | June 2017 | SUPPLY & DEMAND CHAIN EXECUTIVE

6/13/17 8:03 AM

SPECIAL REPORT THE INTERNET OF THINGS By Ronnie Garrett

companies to generate demandsensing insights. This information can be used in a whole host of business decisions, including making inventory reallocation decisions to prevent outof-stock situations, tracking inventory in real time across the supply chain, and in deploying inventory to the right distribution center or warehouse.

Supply Chain’s IoT Revolution The IoT is helping companies collect real-time granular data to generate demand-sensing insights and shorten response times.

hile often touted as the latest and greatest technology to ever hit the supply chain, the Internet of Things (IoT) really isn’t new, says Guy Courtin, vice president of Industry & Solution Stategy, Retail and Fashion at Infor Retail-GT Nexus. He explains the effort to further connectivity within the supply chain and into retail, actually began when Wrigley put a barcode on a pack of gum, and it was scanned in a supermarket in Ohio. What is new, however, is that the price of connectivity dropped, 22

IDENTIFY YOUR PROBLEMS But using data to derive actionable supply chain insights begins before the first 1s and 0s are in hand. Courtin says, “There is way too much information out there. The first question must be going through business uses to determine what specific data to be looking for. It’s not a one-size-fits-all solution.” Companies, he notes, need to set goals before collecting data. “They need to know the problems they are trying to solve so they can develop a solution for them,” he says. “If it’s just basic replenishment, they want to focus

lightning fast cellular networks are widely available, and sensors are small and easily placed just about everywhere. This is the real reason supply chain is seeing an explosion of IoT use, Courtin adds. “Now, the IoT can do more than provide a passive understanding of transactions. It can provide data that enables us to better monitor and understand usage, and understand and anticipate demand at a much higher level,” he says. — GUY COURTIN, INFOR RETAIL-GT NEXUS And the need for a demand-driven supply chain is going on usage data. But if they want to get to be increasingly necessary as retail more sophisticated, they are going to markets become more competitive and need to go beyond how fast they are customer loyalty drops, while customer depleting an item, and understand how demands increase. These changes the customer is actually using it.” require retailers to tighten up their planning windows from months and REFINING THE DATA weeks to days and hours. There’s a saying that if “I pour oil Fortunately, the IoT can make this out of Saudi Arabia, it does me no possible by capturing and storing good until I refine it.” The same is true real-time granular data, enabling for IoT data; it does no one any good

“... THE IOT CAN PROVIDE DATA THAT ENABLES US TO BETTER MONITOR AND UNDERSTAND USAGE, AND UNDERSTAND AND ANTICIPATE DEMAND AT A MUCH HIGHER LEVEL.”

SUPPLY & DEMAND CHAIN EXECUTIVE | June 2017 | SDCExec.com

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until it’s refined by data analytics and demand management tools, and analyzed, says Courtin. One area where Courtin sees IoT data being particularly useful is in inventory, specifically in forecasting and in the estimated time of arrival and outages. He says a lot of time is wasted trying to figure out why a shipment has not yet arrived. “There are still a lot of blind spots in the process,” he says. Take Fed Ex for instance. Though you have a tracking number available to you, and you get updates periodically, there are still times where you have no idea where your product is. It’s the same with truckloads of retail products. “The IoT can eliminate those blind spots,” he adds. “By putting smart sensors on pallets or containers, on trucks and in warehouses, it gives the user an understanding of exactly where something is at any point in its lifecycle of this supply chain. I can start getting more granular in understanding when things are going to arrive, why they don’t arrive and what the delay might be, and I can start rebalancing my supply chain in real time.” Short-term demand might be one of the first areas the IoT would be useful, adds Karin Bursa, executive vice president of marketing for Logility. “Companies can collect actual usage or demand information from a device and aggregate that data together to create a demand signal. This can help identify, in the short term, what daily demand or near-term replenishment might look like.” It also might be useful in demand validation or as part of a collaborative planning environment. A supplier may have a collaborative vendor management inventory program underway, and it can bring in replenishment material to be used in the product that gets packaged and shipped to retail. The data collected by the IoT can automate that process, says Bursa, and also identify patterns that can be compared to the expected demand plan for the business. Bursa is quick to note, however, that this does not replace the need for demand planning and forecasting. She says, “Even with the IoT sensing demand closer to its actual need, you still have lead time associated with production and the distribution of your goods to customers.” The data simply firms up the demand or forecasted plans for the business, she adds, so that companies can validate it and adjust. The IoT holds great promise in the demand-based supply chain, but first companies need to set goals, determine the right data to collect, figure out what it means to them, and then apply this knowledge to help them make sound business decisions. While Courtin is correct in saying the IoT has been around for a very long time, supply chain hasn’t begun to use it to its fullest potential—yet.

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WE GO REAL ESTATE CenterPoint Properties is focused on the development, acquisition and management of industrial property and transportation infrastructure for supply chain efficiency.

6/13/17 8:11 AM

SPECIAL REPORT PROCUREMENT

By Jean Bennington Sweeney

HOW TO DRIVE INNOVATION

Through Responsible Sourcing and Supply Chain M By focusing on sustainability, companies can differentiate products and services, and make a marked difference on their balance sheet and brand.

ddressing the challenges facing our global community today requires persistence, creativity and a child-like curiosity. It’s no coincidence that these same three traits are critical drivers of business success and innovation for the world’s most successful organizations. In an ideal world, natural resources are readily available; local communities are prioritized; and everyone has access to clean water, food and education. Global supply chains play a leading role bringing this reality to fruition— making the world better off for everyone, while simultaneously creating an environment that drives business value and innovation. While this balance shines through at many organizations across the globe, some companies fail to see the big picture, and instead, look at innovation and sustainability as competing forces. The reality: sustainability and innovation aren’t separate goals, but complementary strategies companies must master to create lasting value and impact.

SUSTAINABILITY AND INNOVATION In some cases, sustainability and corporate social responsibility (CSR) requirements are perceived as roadblocks to innovation and creativity. But this mindset couldn’t be further from the truth. Focusing on 24

sustainability can differentiate products and services, and make a marked difference on a company’s balance sheet and brand. A few examples: 1) The product development 74 percent find their job more fulfilling parameters that come with a when they are provided opportunities to sustainability framework force make a positive impact at work. companies to think outside the Sustainability should influence every box. Many companies that adopt decision a company makes—from a sustainable approach to product the products they develop and the development end up with more suppliers they partner with, to how innovative products because they and where materials are sourced. By ditch the status quo, enabling creative making sustainability a critical part of thinking and manufacturing. the business instead of an afterthought 2) Today’s or check box consumers care for compliance, An effective more about companies can drive sustainability program product innovation sustainability than ever before, as 55 and establish sets measurable, percent of global a competitive online consumers achievable goals that advantage over across 60 countries those who fail to see are monitored over time. reveal they are the big picture. willing to pay more for products and services provided by ENABLE INNOVATION companies committed to positive social THROUGH SUSTAINABILITY and environmental impact, a Nielsen An effective sustainability program study reports. sets measurable, achievable goals that 3) Employees are arguably the most are monitored over time. While this valuable assets a company has. Those isn’t a new concept, many organizations who are passionate about the company’s miss the importance of establishing vision and mission will act as the best clear objectives and tracking progress. advocates for the business, and be more To truly be successful in committed to making a difference. sustainability, goal-setting must be real. The Nielsen study also found that 51 It’s not enough to say you want to be percent of employees won’t work for a more sustainable or green—you need company that doesn’t have strong social real targets, with realistic action plans and environmental commitments, and for reaching them. The following are a

SUPPLY & DEMAND CHAIN EXECUTIVE | June 2017 | SDCExec.com

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SPECIAL REPORT PROCUREMENT

ABOUT THE AUTHOR

in Management

JEAN BENNINGTON SWEENEY is chief sustainability officer (CSO) for 3M Company. Sweeney has held a diverse array of positions at 3M, ranging from product development to manufacturing. Her leadership includes assignments as manufacturing director at 3M Australia and New Zealand, managing director of 3M Taiwan and vice president of Environment, Health, Safety and Sustainability.

few initial recommendations that must be considered: ❯❯ Identify your corporate values and map them to goals. Driving real change starts at the top, with an executive team that values sustainability. For supply chain teams, identifying how sustainable procurement maps back the broader business goals and vision is a critical first step to creating a plan that will get company-wide support. ❯❯ Ask the question: “What constraints do our sustainability goals bring?” Change is inevitable. Find out what you need to change within your operations to meet your goals, and make sure you understand what alternatives are out there and the impact it will have on your business. ❯❯ Brainstorm how you can use these restrictions to bring about innovation. You’d be surprised at how well tight parameters foster creativity and innovation and create the potential to make the world a better place. ❯❯ Collaborate and align with your partners and the community. The true opportunity for sustainabilitydriven growth is found in collaboration, deriving purpose from common challenges and developing solutions that meet the needs of multiple stakeholders. Ultimately, it is important to remember that it is everyone’s job to help improve the quality of life for citizens of the world. Businesses stand to gain immensely, and more importantly, play a key role in making this utopia a reality.

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SDCExec.com | June 2017 | SUPPLY & DEMAND CHAIN EXECUTIVE

6/13/17 8:17 AM

SPECIAL REPORT TRADE FINANCE

By Eyal Benishti

Protecting Supply Chain Payment Processes from

PHISHING ATTACKS

n recent years, phishing has evolved from a mere nuisance into a global epidemic. And the supply chain, of course, isn’t immune to cybersecurity threats. The number of attack vectors in the supply chain is indeterminable, yet attackers commonly only use a handful of attack techniques to infiltrate a network. According to a report by Trend Micro, spear phishing is among the most popular. And as you likely know, it was a spear-phishing attack that facilitated the most publicly damaging supply chain event to date: the 2013 attack on Target.

WHO & WHAT ARE VULNERABLE TO PHISHING? While not all supply chain cyber attacks begin with phishing, financiallymotivated attackers can use phishing to deliver ransomware, malware and other forms of business email compromise (BEC) to disrupt and defraud the transaction process. Within the supply chain, both Point of Sale systems (POS) that manage real-time transactions and the more popular electronic invoicing systems that automate manual payment processes for better accuracy and efficiency are at the greatest risk from phishing. 26

Within the supply chain, both Point of Sale systems (POS) that manage realtime transactions and the more popular electronic invoicing systems that automate manual payment processes for better accuracy and efficiency are at the greatest risk from phishing.

As with invoices, change addresses of where any spearchecks are sent, and discover banking phishing information for fraudulent withdrawals campaign, and transactions. it only takes one employee PHISHING MITIGATION FOR within the THE SUPPLY CHAIN supply chain to For supply chain vendors, a defenseclick on a malicious email link or in-depth strategy in which various download a dangerous attachment security tools are used to harden for an organization’s corporate the perimeter and maintain the network to become compromised. integrity of devices is advisable. At Once network access is obtained, the same time, organizations should attackers have limited obstacles to understand that employees are the finding and accesing the POS system front line of protection, but they’re database, which stores credit card also the individuals most likely to and other sensitive voluntarily turn over information. information. The same is Unfortunately, true for electronic phishing is not invoicing systems. In going away anytime many organizations, BY THE NUMBERS soon—and neither employees in are electronic human resources, payments. As procurement, organizations and cyberattacks that began with spear-phishing supply chains, both finance and other business groups independently and have access to collaboratively, electronic invoicing. explore new ways phishing campaigns/attacks that contain They facilitate to reduce cyber risk, ransomware these invoices, after phishing mitigation all. Similarly, if should, and will, just one employee continue to play an increase in phishing attacks in the past year important role. were to click on a suspicious link or ABOUT THE AUTHOR email, attackers could gain access to the network and, in turn, the invoicing EYAL BENISHTI is the founder and CEO of IRONSCALES, software, enabling them to falsify the first and only email security provider to combine

GONE PHISHING 95% 86% 65%

human intelligence with machine learning.

SUPPLY & DEMAND CHAIN EXECUTIVE | June 2017 | SDCExec.com

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6/13/17 8:26 AM

EXECUTIVE FOCUS

{ TRANSPORTATION}

By Amy Wunderlin

TECHNOLOGY DRIVES

THE MODERN 3PL Investing in technology and analytics creates opportunity for 3PLs as shippers continue to rely on them for IT needs.

In May, Ryder System launched a cloud-based platform that provides customers with real-time shipment visibility.

he global supply chain is changing rapidly every day, adding complexity to the roles of shippers and their third-party logistics providers (3PLs). The “I want it now” environment, formed out of Amazon’s influence, is creating opportunities for those 3PLs willing to change and adapt to meet those consumer demands. Many 3PLs are responding with increased capabilities and greater technological expectations—something Joe Carlier, senior vice president of sales at Penske Logistics, says is essential to the 3PL’s survival. “Consumer behaviors have changed rapidly over the last several years, increasing the overall collective service levels within the industry. It is impossible to meet those demands without the proper technology on the frontend to execute,” he says, adding, “And those that are not investing, just won’t be around.” Donna Slyster, chief information officer at Saddle Creek Logistics Services, agrees, adding, “Supply chain dynamics are changing dramatically. Technology and analytics are helping shippers and their 3PLs to be more sophisticated about how they anticipate and adapt to this shifting

environment.The use of technology helps 3PL partners predict, or at least recognize, when exceptional events occur.”

OPPORTUNITIES LIE IN TECH And while a multifaceted supply chain creates better opportunities for the 3PL industry, it also adds a level of complexity and new challenges, notes Gary Allen, vice president of supply chain excellence at Ryder Supply Chain Solutions. “With the added complexity that our customers have to go through, we also need to keep up with what’s going on in the industry, which is not an easy thing to do,” he says. “We have to not only stay abreast of what’s going on, but we have to continually look at either partnering-up or using the technologies to enhance our services that drive improvements for our customers.” Allen currently oversees a team devoted to research and development for Ryder System that is tasked with remaining up-to-date on market trends, as well as investing in product development innovation. In the next year, the team will be working on a number of pilots, which include autonomous forklifts, drone pilots for yard checks and inventory audits, Internet of Things (Iot) sensors, and automation of transactional activity. In May, Ryder System launched its latest technological innovation, a cloud-based platform called NaviShare, that provides customers with real-time shipment visibility, predictive alerts and exception dashboards. The technology is accessible through a customer-facing website and mobile application that utilizes cellular and GPS technology to link shippers with onboard vehicle technologies. The system provides real-time visibility

SUPPLY & DEMAND CHAIN EXECUTIVE | June 2017 | SDCExec.com

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TRANSPORTATION

and event management capabilities to shippers, and delivers information updates and routing instructions to drivers. “If they’re outsourcing their transportation to us, now not only will they know where their truck is, but also what’s on the truck, and have a proactive estimated time of arrival and delivery on an app,” explains Allen. C.H. Robinson is similarily focused on providing better supply chain visibility, says their chief information officer Chad Lindbloom. “We are focused on providing real-time information to shippers in a graphical way of what’s going on or where their shipments are and down to what items do they have on those shipments,” Lindbloom says.

notes Carlier. “Now, what they are interested in is how we collect data throughout their supply chain, what we do with that data, and how we present that data back to them.” Carlier adds that the more data they can collect throughout the supply chain, the better model they can build. “So, how can I use what is happening in the data to determine what is going to happen, to present the most costeffective solution?”

98% of 3PLs say data-driven decision making is essential to supply chain success.

ROOM FOR IMPROVEMENT One of the greatest challenges to investing in tech is finding the right employees who understand data and can provide the skills to back operations. “The logistics field has typically not drawn young entrepreneurial talent who are willing to take big risks and change the game. Many logistics companies are owned and run by older

UTILIZING BIG DATA AND ANALYTICS Both 3PLS and shippers are increasingly using information and analytics to drive their decisions. According to the 2017 Third Party Logistics Study, nearly three-fourths of shippers (71 percent) say real-time analytics from 3PLs help them better understand shipping alternatives, and nearly all 3PLs (98 percent) say improved, data-driven decisionmaking is essential to the future success of supply chain activities and processes. Both groups—86 percent of 3PLs and 81 percent of shippers—say the effective use of big data will become a core competency of their supply chain organizations. “Our customers are looking at us as the experts to execute that supply chain, and they’re less interested in the brand of the technology that we’re using, rather the execution capability,”

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professionals who may have learned the industry in the cab of a truck,” explains Michael Pederson, manager, Solutions Development, Yusen Logistics (Americas) Inc. Allen and Carlier agree, emphasizing the value of the users of such technology. “The right operating structure is the next critical piece, with the right training, enablers and people,” says Allen. “Technology is just a tool. If you’re not training and developing your talent across your organization, there’s going to be a gap pretty quickly.” Adds Carlier: “You have to have a very efficient supply chain in order to meet the demands of the customer. You cannot have a very efficient supply chain without, not just the technology, but the users of that technology. Technology is great, but not if you’re not able to use it effectively.”

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SDCExec.com | June 2017 | SUPPLY & DEMAND CHAIN EXECUTIVE

2/25/13 11:57 AM

6/13/17 8:33 AM

EXECUTIVE FOCUS

{ WAREHOUSING}

By Gary Wollenhaupt

E-COMMERCE RESHAPING DISTRIBUTION CENTER REAL ESTATE STRATEGIES Companies are reconfiguring their warehouse space as the fast-delivery revolution disrupts the warehousing and distribution eco-system.

ven if Amazon were to go out of business today, the fast-delivery revolution that the online giant has wrought in the retail space would continue to disrupt the warehousing and distribution eco-system for the companies left behind. “Our culture has already accepted this idea that shopping is always on, items are available for purchase anywhere, and customers want to be able to pick them up anywhere or have them delivered to them no matter where they are,” says David Schwebel, senior director of business development at Swisslog Warehouse & Distribution Solutions. “Omni-retail is turning into omni-purchase.” E-commerce is leading the transformation in retail, although online buying accounted for 11.7 percent of total U.S. retail sales in 2016, reaching $394.9 billion. Industry watchers expect online sales to grab an increasingly larger portion of sales for the foreseeable future. Thanks to Amazon, consumers increasingly expect not only overnight delivery but also same-day fulfillment. A small but growing segment of retail sales is driving fundamental changes in

the way shippers conceive of and use logistics spaces. Meanwhile, retailers are trying to reconfigure their fulfillment and warehouse space in a market where demand is outstripping supply. CBRE Group reports the cost of commercial leasing has soared, and in some major markets, such as Los Angeles and Seattle, up to 95 percent of total warehouse capacity has been leased. “We’re continuing to see industrial demand keeping up every bit with new deliveries, especially in those top markets,” says Ben Conwell, senior managaing director and national practice leader for E-commerce and Electronic Fulfillment Practice at Cushman & Wakefield’s.

E-COMMERCE IN CHARGE Prologis reports that e-commerce leasing accounts for approximately 20 percent of new leasing, up from less than 5 percent five years ago, driven by global e-commerce sales that are forecast to grow by more than 150 percent over the next five years. Changing consumer behaviors are compounded by the fact that e-commerce-driven retailers are intensive users of logistics real estate;

SUPPLY & DEMAND CHAIN EXECUTIVE | June 2017 | SDCExec.com

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WAREHOUSING

transition of purely online retailers into the brick-and-mortar world, Conwell says. A number of companies, including Amazon, Warby Parker and Bonobo, have opened brick-and-mortar locations to reach shoppers in new ways. “They’re coming to recognize the top line and bottom line benefit of building a physical presence,” Conwell says. “But will it be a one-to-one per square foot absorption of space from retail closings? We don’t think so.” Retailers are getting creative in adapting existing space to the new retail environment. For instance, some have adapted mall anchor square footage to support buy online, pick up in store fulfillment, converting dormant retail space into fulfillment operations.

because it might have only an 18foot ceiling height. In urban markets where these older, smaller buildings are in close proximity to the shopping demographic, “these are being leased like hotcakes because occupiers are willing to settle for maybe only a couple of doors. Maybe they can’t park a bunch of trailers on the property, but they’re willing to make that tradeoff to have a golden location,” Conwell says. Older buildings closer to city centers may not need to be redeveloped, but can be used as-is with the help of technology. Robotics, automated guided vehicles and moveable shelving that brings racks to the workers makes picking and fulfillment possible even in low-height areas, according to Schwebel. “Now you can reclaim that unused real estate that’s just sitting there waiting for someone to use, and turn them into urban fulfillment centers,” he says.

Prologis’ research estimates that these users require between two and one haf to three times the amount of logistics space of typical distribution activities. “Even with the advances in technology, robotics and efficiency, we need more fulfillment space, more industrial cube to support the online growth,” Conwell says. While a high number of store closings have been announced, there URBAN ZONES doesn’t seem to be a corresponding To meet consumer expectations for shift in warehouse space entering the faster e-commerce delivery, retailers are market. Currently, retailers closing shifting from million-square foot regional stores are holding on to logistic distribution centers to urban fulfillment PEAK PLANNING assets—at least for the near term. centers that help speed up last-mile One way to manage the rising As a company retools to support an delivery times. These smaller centers are costs of logistics space, as well as e-commerce strategy, real estate costs stocked with smaller quantities of high uncertainties in the market, is to coare actually a small factor in locate or share space that meeting the demands of “Even with the advances in technology, offers flexibility to meet the market. peak demands without robotics and efficiency, we need more paying for excess space the “Retailers know that they have to be in certain fulfillment space, more industrial cube to rest of the year. population bases, and in the “As the vacancy rates support the online growth.” coming years, you’re going continue to be low, it’s to see industrial demand harder for retailers to — BEN CONWELL, CUSHMAN & WAKEFIELD continuing to grow even find short-term leases with retail closures,” says Matt Powers, velocity products, closer to the consumer in order to meet their executive vice president, Retail and base for faster delivery. seasonal spikes,” Powers E-commerce Distribution Real Estate “Nowadays to get close to the adds. “For a lot of retailers, Solutions for Jones Lang LaSalle. “If consumer you’ve got to have a broader it was preferred to control the entire you have to reach the Dallas population, assortment of inventory in more building, but people are being more you’re going to pay that extra rent and buildings closer to the customer to be flexible around that now.” labor costs, because you’re not going ready when he or she orders an item, ABOUT THE AUTHOR to go to rural central Texas where you whether it’s a popular item or is further GARY WOLLENHAUPT is an experienced content might get a better deal, but you’re down the tail,” Conwell says. marketing writer and journalist. He covers transportation, farther from the customer base.” Additionally, the smaller urban Internet of Things business transformations, green One of the factors driving the fulfillment centers can use real-estate building, the maritime industry, automotive industry, digital signage and many other topics. appetite for logistics space is the product that was thought to be obsolete

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SDCExec.com | June 2017 | SUPPLY & DEMAND CHAIN EXECUTIVE

6/13/17 8:35 AM

EXECUTIVE FOCUS

{ SOFTWARE & TECH }

By Amy Wunderlin

ERP UPGRADES BEGIN IN THE CLOUD The comfort of on-premise ERP is making way for the low infrastructure costs and improved accessibility of cloud-based technology.

echnology encompasses every aspect of the supply chain, creating better visibility and control over inventory, increased efficiency, and even helping to reduce operational costs. Tools that once were only accessible to large industrial companies now are increasingly used across the industry, including the implementation of an enterprise resource planning (ERP) system. A fairly simple technological upgrade, companies of all sizes have adopted ERP systems over the last 25 years as they continue to adapt to the ever-changing global market. An ERP system basically controls the day-to-day functions in a business, helping them to operate more effectively. It does the accounting, order processing, purchasing, inventory management, and most importantly, it integrates data and information from all departments across an organization.

TAKING ON A NEW SHAPE As ERP systems continue to find their place in the supply chain, the technology has begun to take on a new form. ERP systems have come a long way since their first implementation in the early 1990s, when the only choice was an on-premise model. The majority of companies still prefer the original, but as the technology has evolved over 32

the last 20 years, vendors are seeing more and more options, such as a cloudbased system that can be distributed through the internet and accessed by end-users via web browsers. So what exactly is the difference between an on-premise ERP and the cloud-based solution? According to an article, “How Cloud ERP Compares to On-Premise ERP,” published by Oracle + NetSuite, the basic difference between on-premise ERP and cloud ERP is all about location. “On-premise ERP solutions are installed locally on your company’s hardware and servers, and then are managed by your information technology (IT) staff, while cloud ERP is provided as a service. With this type of deployment, a company’s ERP software and its associated data are managed centrally (in the cloud) by the ERP vendor and are accessed by customers using a web browser,” the article explains.

FOR YOUR BENEFIT Cloud-based ERP solutions offer four key advantages, including cost, customization, improved performance and accessibility, and deployment speed. 1) Cost: On-premise ERP systems usually require a large upfront cost to purchase and manage the software and related hardware, servers and facilities

necessary to run it. And without a large or experienced IT staff, additional investment in personnel and training can add up quickly. Even more importantly, on-premise systems require a significant amount of time from a company’s IT team, ensuring the system is up and running when it is needed. According to the Oracle + NetSuite article, initial costs for cloud-based ERP typically are much lower because you simply implement the software to your requirements, and then access it through your computer’s internet connection. “The cloud ERP provider hosts and maintains all of the IT infrastructure for you and ensures the system is always running.” Over time, those IT savings add up. When comparing the total cost of ownership of on-premise ERP solutions relative to cloud systems, a study, “The TCO of Cloud Computing in the SMB and Mid–Market Enterprises; A total cost of ownership comparison of cloud and on–premise business applications,” by Hurwitz &

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SOFTWARE & TECH

system by VAI, a software developer 3) Improved System Performance that specializes in ERP. As the business and Accessibility: Cloud ERP often quickly expanded, their original ERP delivers better performance than oncould not keep up with the business’ premise solutions, which can mean growing demands. better application availability than “Our goal was to really transform traditional on-site ERP systems. the way that we do business, to be For example, Oracle + NetSuite more efficient, to be able to service commits to 99.5 percent availability our customer better, to be able manage for its customers, has a 99.97 percent our product and quality better, get a average uptime performance over the real-time accurate inventory count, past 12 months, and makes uptime online portal access,” says Black River performance information available to Produce President Sean Buchanan. all customers at all times online. One of the most innovative tools “We are seeing companies move VAI S2K Enterprise for Food provides to the cloud more and more who is mobile access, which enables every are taking advantage of the built in user in the organization immediate, infrastructure that the cloud provides,” anytime, anywhere computing on any says Joe Sciocia, vice president of device. By delivering software through sales at VAI. “One of the things the a browser via the cloud, VAI can provide the user with a single sign on of all web applications, which simplifies the user experience, increases productivity and minimizes training costs. Additionally, Automated classiﬁcation of spend cloud ERP from all ERP and legacy systems solutions continually are Item level analysis of usage quantity, upgraded by the speciﬁcations and pricing provider, so a business is always Collection and reporting of spend using the latest, through vendor contracts most advanced version of their Access to market intelligence on software and any vendors, pricing and supply risk implemented customizations 2017 SDC100 Award Recipient and integrations spendworx.com | 800.666.8138 automatically carry forward.

Associates, found that cloud-based ERP can cost 50 percent less than on-site ERP for a 100-employee company over a fouryear period. 2) System Upgrades and Enhancements: On-site ERP software can be customized, but those customizations often are tied to a company’s current software deployment and are not easy to re-implement with future versions, explains “How Cloud ERP Compares to On-Premise ERP.” “As your ERP provider releases new product updates and enhancements, your previously implemented customizations will be wiped out when you upgrade, and your IT team will have to start customizing from scratch

All the information you need to make smart procurement decisions. From one solution.

CLOUD-BASED ERP CAN COST 50 PERCENT LESS THAN ON-SITE ERP FOR A 100-EMPLOYEE COMPANY OVER A FOURYEAR PERIOD. again. That’s the main reason many companies simply avoid upgrading their on-site ERP software and settle for running their business on out-of-date technology,” the article explains. Black River Produce, a fresh food distributor based out of Vermont, fell into the second scenario before transitioning to a browser-based

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SOFTWARE & TECH cloud provides that is very attractive is high availability and disaster recovery, meaning that by being in the cloud, they can really improve their uptime and have less of a chance for any type of system outage.” There is, however, some resistance from companies that are 24/7 operations, because being up and running is critical to them. Scioscia says some companies feel that if the server is on-premise, there will be less chance for down time related to an internet outage. VAI offers both on-site and cloudbased ERP systems, but typically leads with the cloud to show companies the unlikelihood of such an outage. “During the implementation process, the customer can choose whether they would like to stay in the cloud or bring in on-premise servers. It gives the

customer the ability to see if the speed, the uptime, the reliability is what they want it to be,” Scioscia says. “We are seeing a lot of customers staying in the cloud who are pleasantly surprised by what the cloud can offer them.” 4) Deployment Speed: Every ERP deployment takes time and requires careful planning, but cloud ERP offers clear advantages when one considers speed of deployment. The Oracle + NetSuite article notes that because cloud ERP requires no additional hardware, a business doesn’t have to waste time procuring and installing IT infrastructure. Instead, it can be easily rolled out across multiple regions, subsidiaries and divisions without added cost. Cloud ERP deployments usually take 3-6 months, compared to the 12 months it typically takes Collaborative, agile to implement procure-to-pay an on-premise solution. gets you there. Black River Produce, which Buchanan says is one of the most complicated food distributors in the market, implemented their VAI solution from ground up in about 10 months. The 7-day a week operation was sales@tradeshift.com Americas +1 800 381 3585 — EMEA +44 (0) 203 751 0412 able to remain open throughout

THE BIGGEST RESTRICTION ON MOVING TO THE CLOUD IS STILL THE AVAILABILITY OF HIGH-SPEED INTERNET.

Procure smarter. Process faster.

the entire process, and the president says “customers didn’t notice any large hurdles” while Black River Produce adapted to the new system. “From an implementation standpoint, cloud solutions let you get up and running a little quicker than an on-premise because basically you’re plugging into an infrastructure that already exists, and you can get started right away,” adds Scioscia.

NO REWARD WITHOUT RISK The benefits of a cloud-based system are significant, but many companies remain concerned, especially in those areas where high-speed internet is limited, notes Scioscia. “The biggest restriction on moving to cloud is still the availability of high speed internet in a location,” he says. “Obviously in major cities high speed internet is readily available, but as we span out across the United States or North America, there are still locations that don’t really have good, reliable high speed internet. So if you don’t have it, cloud is not really an option for you.” Another fear many companies have in regards to cloud-based solutions is the protection of data. “Some people don’t like to put things in the cloud because they are afraid of moving their data out to the open world,” says Scioscia. “But security has really evolved in most cloud solutions, where companies today are much more protected from a data standpoint than they’ve ever been in the past.” Because it’s their core competency, Cloud ERP providers like Oracle + NetSuite make securing their systems a top priority by providing strong, industry standard data security certifications.

SUPPLY & DEMAND CHAIN EXECUTIVE | June 2017 | SDCExec.com

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{ PROFESSIONAL DEVELOPMENT}

UNCOVER the Hidden Gems It’s possible to find supply chain talent in uncommon places if you know where to look.

ith an increase in retirees amongst baby boomers and a strong interest in entrepreneurism seen in millennials, it can be difficult to secure top talent for your supply chain. The traditional channels, such as job postings, online sites and tradeshows, are still viable options, but they’re not necessarily the best or most efficient.

minimize the initial training and orientation phases of your new hires.

THINK OUTSIDE THE BOX It’s important to use the correct strategies when trying to recruit and hire professionals. Nearly any of the traditional channels can be used, but some are bound to be more successful than others. Think outside the box. Consider recruiting on military bases, or working with veterans.

EMBRACE THE EVOLVING WORKFORCE

By Megan Ray Nichols

industry, and in doing so, open up their talent pipelines to a renewable talent source,” she adds. Women also are playing a greater part in today’s supply chain. Although women shied away from such roles in the past, many are bucking tradition to start their own successful careers. By providing guided tours of your factory or warehouse to prospective talent, you can help boost morale and even dispel any myths. Scheduling flexibility, such as accommodating employees who need to drop children off at school or pick them up at the end of the day, is another perk attractive to both men and women.

HOW TO FIND MILLENNIALS Sourcing and securing millennial talent for your supply chain can be challenging. To make the process easier, search for potential employees at career fairs, airline schools, conferences and other community training programs. For greater access to young talent, consider investing in a STEM (science, technology, engineering and mathematics) program.

The traditional channels, such as job postings, online sites and tradeshows, are still viable options, but they’re not necessarily the best or most efficient.

As the workforce within the supply chain is evolving, more companies are becoming involved in the recruiting scene, either through a third-party staffing agency or by targeting potential employees when they’re still in high school. This connects you with top supply chain talent as early as possible. You’ll also want to target recruits who already have the right skill sets in place, such as expertise in interpersonal communications, team leadership, supervision and human resources, which are useful when applied to the supply chain. Apart from bolstering warehouse safety, this also will

“Supply chain is the most logical fit for veterans as they transition out of the military, because the Department of Defense is the largest supply chain provider in the world. Almost every role in the military has some aspect of supply chain theory involved,” says Amanda Veinott, a military talent expert at Miligistix. “Companies have an opportunity to educate service members and veterans about the depth and breadth of roles within the

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EXECUTIVE FOCUS

It can be difficult to secure the necessary talent in the first place, but those who know where to look can start filling their ranks with qualified millennials, women and employees of all types. ABOUT THE AUTHOR MEGAN RAY NICHOLS is a freelance science and supply chain writer and blogger. She can be reached through her website, Schooled By Science, at www.schooledbyscience.com.

SDCExec.com | June 2017 | SUPPLY & DEMAND CHAIN EXECUTIVE

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WORK HARD, By Amy Wunderlin

WITHOUT

MISSING A Ken Fleming’s passion for music prepared him for a career in front of the crowd.

hen Ken Fleming relocated to the Netherlands for a role as chief product and marketing officer at Logistyx Technologies (a software technology firm that specializes in building software for multi-carrier shipping systems), his wife cautioned him he would never have time for his beloved hobby. But the life-long drummer should have known better. “When I was first moving over here, my wife said to me, ‘Look you’re never going to have time to play, why bother shipping everything,’ so I never shipped the full kit. I had two full kits back in America, and I had them in storage,” Fleming recalls. But as Fleming connected with new bandmates, he quickly realized his portable electronic kit wasn’t going to cut it. “I met these guys over here, and I said, ‘This is crazy. I’m dying. I need my real drums.’ ” Easier said than done, however. It turns out, after the cost of international shipping and import duties, transporting a drum set is rather expensive. So Fleming hatched a better plan. 36

“I literally asked my staff that every trip they took, they all had to bring a drum,” he explains. And slowly but surely each piece of the drum kit made its way from Chicago to Hilversum.

when you say work hard, play hard,” he adds. “The hardest thing is making sure you can do both, and one of the biggest challenges I have is that working at a global company interferes with my ability to actually do my play A PASSION FOR ROCK & ROLL hard part. Fleming, who grew up in Scotland, “I really have a passion for has been playing the drums since he something outside of work, and I was a child, beginning first in a pipe think everybody should have that,” and drum band—plaid kilt and all. he continues.” In my particular case, I The drums weren’t his first instrument, enjoy many things to kind of relax and though, as his father, a musician get out of that mindset of constantly himself, wanted him to learn how to working, but drums really work for read and write music first. me. And maybe it’s a psychotherapy, A few years later, after he had allowing it to be therapeutic for me.” grasped the basics of musical In addition to acting as a form of composition on the saxophone, his stress relief, Fleming’s time on stage journey to rock and also has influenced “You just define my roll began. his career path, Fleming’s supply allowing him to life when you say chain career has succeed in more taken him all work hard, play hard...” communicationover the world. based positions. But no matter where he landed, he’s “In my role [in marketing], I do a lot always been in a band. He once even of public speaking and presentations, considered swapping logistics for so I have to get up on stage; I have drumsticks. to feel comfortable in any given “I made a choice, and my choice situation. So having that training [as ended up being in computer science a performer], stage freight has never and supply chain,” Fleming says. “And been an issue for me,” he says. so, for me, my hobby is music. I am fortunate that my job allows me to pursue my hobbies in a big way.”

A MEANS OF PSYCHOTHERAPY Fleming emphasizes the importance of having a passion outside of the office—a statement he says describes the way he lives his life. “You just define my life

SUPPLY & DEMAND CHAIN EXECUTIVE | June 2017 | SDCExec.com

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Get the

RECOGNITION YOU DESERVE! 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:

17th Annual

2017

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GREEN SUPPLY CHAIN AWARDS Recognizing companies that implement green practices as a core function of their supply chain operations.

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Winners announced in December 2017 issue.

SDCE 100 AWARDS Transforming Supply Chains with Software & Technology

PROS TO KNOW AWARDS

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.

Honoring leading executives for improving the global supply chain through sustainable and proactive business initiatives.

Winners announced in this issue.

Winners showcased in March issue.

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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