BONUS PULLOUT: Global Enabled Supply & Demand Chain Map 30.0 SEPTEMBER 2015
GLOBAL SOLUTIONS FOR SUPPLY CHAIN ROI
FOOD TRACK TRACE INCREASING EFFICIENCY
Telematics brings advancements for effective, streamlined, real-time logistics. PAGE 6
Supplier Risk Awareness PAGE 16
CONFLICT MINERALS UPDATE
PAGE 12
SDCEXEC.COM | Exclusive online features and solutions for successful supply chain operations. | Fresh new content daily.
Saia team members have one goal: timely, claims-free shipping. For our dockworkers, it’s a responsibility they take personally. Their training begins with several weeks of extensive one-on-one mentoring, where they learn the critical knowledge they need to succeed. Accountability is Saia’s number one priority. That’s why every dockworker’s forklift carries a tablet that tracks all the freight they handle, while protective packing materials are used to prevent damage during transit. With the right people, the right technology and the right attitude, we’re exceeding our customers’ expectations — one shipment at a time.
1-800-765-7242 / www.saia.com
CONTENTS September 2015 | Volume 16 | Issue 4
HARMONIZING YOUR SUPPLY CHAIN TO SOCIAL SENTIMENTS
04} EXECUTIVE MEMO A Rule That’s Time Has Come
With the help of social media analytics, consumer products manufacturers can be one step ahead of the production curve.
Mandate on electronic logging devices is to become final; compliance will make everyone safer.
10} FEATURE
30} C ASE STUDY
Is it Time to Recall Your Recall Process?
Inside the Country’s Largest Home Furnishings Warehouse
There’s no excuse for not being proactive in mitigating risk.
12} FEATURE
40} B EST PRACTICE
Start a Chain Reaction of Success with The Right Supply Chain Execution Software
Nebraska Furniture Mart’s warehouse systems deliver the goods.
Conflict Minerals: The Pressure Remains On
Distribution leaders should focus on advanced capabilities to gain improved productivity and profitability.
32} O N THE FLOOR
As the courts affirm current U.S. filing requirements, Europe is developing its own, perhaps even more stringent, legislation
The Era of the Automated Storage and Retrieval System Customer demand for distribution speed and accuracy is driving AS/ RS implementation.
16} FEATURE
42} FINAL THOUGHTS
3PLs Rising to the Challenge of Omnichannel Demands
36} BEST PRACTICE
What’s Your Supplier Risk Level?
4 Steps to Choose a Business Intelligence Solution
Keep your sights set on these six critical factors
18} FEATURE
Helping mid-market companies cut through the clutter.
Manufacturing is being Revolutionized Once Again, This Time in the Cloud
Cloud computing provides manu facturers with massive amounts of computingpower, storage, data and analytical tools.
22
Key to the strategy is a data-driven, innovative solution that is essentially customized for a business’ precise needs.
pg 06 COVER
26} GLOBAL FOCUS
Automakers Driving to Mexico
INCREASING EFFICIENCY IN FOOD AND BEVERAGE LOGISTICS
As original equipment manufacturers move into the country, suppliers and related industries bring economic growth.
28} BEST PRACTICE
Raising the Stakes on Producting Steaks (and Other Food)
The booming telematics industry is bringing advancements for efficient track-and-trace operations.
Food poisoning, hospitalization and death are three reasons we need more automation in food manufacturing.
Cover Photo courtesy of: Barcoding Inc.
NEWLY UPDATED! SPECIAL INSERT following page 22.
GLOBAL SUPPLY CHAIN MAP 30.0
SDCExec.com | September 2015 | SUPPLY & DEMAND CHAIN EXECUTIVE
3
SEPTEMBER 2015 / VOLUME 16 / ISSUE 4 ®
EXECUTIVE MEMO Global Solutions for Supply Chain ROI
By Barry Hochfelder, Editor bhochfelder@ACBusinessMedia.com
www.SDCExec.com Published by AC Business Media Inc.
A Rule that’s TIME HAS COME Mandate on Electronic Logging Devices is to become final; compliance will make everyone safer
I
t’s almost here. By the end of this month, the Federal Motor Carrier Safety Administration (FMCSA) is expected to publish the final rule mandating the use of electronic logging devices (ELDs). In two years, all carriers and truck operators will be required to have them installed on vehicles. Paper logs will no longer be allowed. While there is some grumbling by carriers, it’s a generally popular advance. For example, the American Trucking Associations (ATA) trade organization is all for it. “For ATA’s members safety is the highest priority,” ATA President and CEO Bill Graves said, “and, as such, we stand behind the agency as it advances a common sense solution to improving the safety of our nation’s highways … We know these devices can improve safety, so it makes sense for FMCSA to do all they can to encourage adoption of electronic logging devices.” John Gaither, East Coast sales manager at GPS Insights, and advocate for electronic logging, said, “I have a lengthy history in onboard computers and telematics. I did one in 1991 for Food Lion [grocery chain]. Drivers are safer, more rested, conscious of their surroundings and less likely to be influenced by their employer or customers to do things that might be risky.” Many food distributors embraced ELDs early on, as in the Food Lion example, on the theory that these logs 4
allow them to observe driver behavior. “It makes good sense and value for fleets,” Gaither reported. “The last thing a board of directors wants to see is its truck on the 6 p.m. news.” This plays well with the hours of service rules. The driver will get a visual cue from the system that tells him (or her) that there are three hours left and six stops to go, and he (or she) is more than an hour from home. The driver can call in and ask what the next step is to avoid a compliance problem. The ELD data set includes date, time, commercial motor vehicle (CMV) location, engine hours, vehicle miles, driver or authenticated user identification data, vehicle identification data and motor carrier identification data, which determine if the fleet is affected by the mandate. As you read this issue, you’ll notice a different look. We updated it for a cleaner, more airy look that will make all of our great content even easier to read. Hats off to Art Director Kayla Brown for her great design work. Let us know what you think. There’s a lot of great content in this issue—everything from food track and trace to a status report on conflict minerals to business intelligence and how consumer packaged goods companies are using social media techniques in their businesses. Enjoy the read. SDCE
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
201 N. Main Street, Fort Atkinson, WI 53538 (800) 538-5544 • www.ACBusinessMedia.com
PRINT AND DIGITAL STAFF PUBLISHER Jolene Gulley EDITOR Barry Hochfelder ASSOCIATE EDITOR Carrie Mantey ASSISTANT EDITOR Eric Sacharski ART DIRECTOR Kayla Brown AD PRODUCTION MANAGER Cindy Rusch SR. AUDIENCE DEVELOPMENT MANAGER Wendy Chady AUDIENCE DEVELOPMENT MANAGER Tammy Steller 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, Board of Governors, Material Handing Industry of America RORY KING, Director, IHS WILLIAM L. MICHELS, CEO, Aripart Consulting JULIE MURPHREE, Founding Editor, Supply & Demand Chain Executive ANDREW K. REESE, Former Editor, Supply & Demand Chain Executive BOB RUDZKI, President, Greybeard Advisors 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 EXECUTIVE VICE PRESIDENT Kris Flitcroft CFO JoAnn Breuchel VP CONTENT Greg Udelhofen VP MARKETING Debbie George DIGITAL OPERATIONS MANAGER Nick Raether DIGITAL SALES MANAGER Monique Terrazas Published and copyrighted 2015 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 performances of items appearing in editorial presentations or advertisements in the publication.
$2 million worth of product hits the dock. Without insurance, it’ll take $33 million in new sales to cover it. It’s simple math. At a profit margin of 6%, it would take more than $33 million in additional sales to cover a $2 million loss. Most companies don’t think of that until it happens to them. Before it happens to you, call UPS Capital. UPS Capital Insurance Agency, Inc. can provide a customized policy that covers losses up to their full sales value. Protect yourself before a problem becomes a disaster. upscapital.com
© 2015 United Parcel Service of America, Inc. UPS, UPS Capital, the UPS brand mark and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. 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. *Business Continuity Institute and Zurich Insurance Group, 2014 Supply Chain Resilience Survey
COVER STORY
{ FOOD TRACK & TRACE}
By Wyn Partington
INCREASING EFFICIENCY
IN FOOD AND BEVERAGE LOGISTICS The booming telematics industry is bringing advancements for efficient track-and-trace operations
6
E
fficiency and timing are crucial for any company in the food and beverage industry. Managing a facility with product coming in and out can be a difficult task without the proper solution. To help streamline processes and increase productivity, food logistics professionals can utilize technology solutions such as global positioning system (GPS) fleet tracking. This technology provides realtime fleet data and simplifies day-today tasks, all while helping companies increase revenue and decrease costs. When transporting food and beverage items, especially perishable goods, it’s important that deliveries are on made on schedule. GPS fleet tracking allows management to monitor truck activity from a computer or mobile device. Fleet managers can view the location of their trucks in real time, and see where they were throughout the day, week or month. Automated alerts can also be set up to send instant notifications when vehicles enter or exit specified locations. This helps to ensure products are being picked up and dropped off on time. With multiple trucks making deliveries at various times, an automated job-scheduling tool can be
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
beneficial for dispatchers or employees in charge of scheduling. With a GPS fleet-tracking solution, businesses can use a drag-and-drop scheduling tool to streamline the process. This allows dispatchers or the appropriate staff to quickly and easily schedule jobs, and view all assignments on one screen. This helps increase productivity and eliminate the errors that typically come with paper processes. Routing helps keep processes running smoothly as well. Fleet management solutions provide an automated routing feature that takes all stops in a driver’s itinerary and orders them to create the shortest, most efficient routes to all locations. This especially benefits drivers who make multiple deliveries in a day. If traffic congestion or road delays pop up, dispatchers can quickly pull up the location of their drivers on the map and re-route them on the fly. Efficient routing not only prevents delays, but also gets drivers to locations quicker, so they can get more done throughout the day. There are many regulations in place regarding the safe transportation of perishable items. To ensure food and beverage safety, certain products must be kept in a refrigerated unit at specific temperatures. Fleet management
Managing Your Fleet BLINDFOLDED?
Gain Visibility with: GPS INSIGHT TRK#1
78mph William Barker
• Real-time Vehicle Locations • Instant Notification of Activity • Keep Deliveries on Time • Provide Proof of Delivery
Fleet Intelligence for
Freight & Goods Transportation Vehicle & Asset Tracking Software 877-466-6577
a 866-477-4321 l gpsinsight.com gpsinsight.com
FOOD TRACK & TRACE
When transporting food and beverage items,especially perishable goods, it’s important that deliveries are made on schedule. Scorecards can help with tracking.
solutions provide an easy method of monitoring temperatures with the use of temperature sensors. If temperatures move outside of a specified range, fleet managers can receive an immediate alert. Additionally, with temperature reports, management can view a record of temperature readings for any time period selected. This helps reduce product loss and improve shipment quality. Because managers can’t be in the field with their drivers at all times, there’s no fool-proof way to validate the time employees spend on the job. However, after implementing a GPS fleet-tracking solution, one leading food and beverage supplier realized that certain drivers were padding their hours. Because the technology acts as a virtual time card, the organization was able to verify hours worked, reducing 8
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
overtime costs by 50 percent and saving the company more than $80,000 in overhead expenses. In addition to reducing overtime costs, fleet management solutions can help cut back on fuel spending. Fuel is a major operating cost for any business with vehicles in the field and, with constant fluctuations in price, it can be a difficult expense to manage. Businesses that use fuel cards can take advantage of fuel card integration, which allows managers to monitor all aspects of fuel usage. Automated reports provide a detailed view of fuel and maintenance purchase activity, including the purchase location, date and amount spent. This helps compare usage between trucks and eliminate abuses. There are also fuel reports that identify wasteful behaviors and pinpoint trucks burning more fuel than they should. Using a fuel slip audit report, managers can identify and mitigate fuel slippage and theft. It points out events in which a purchase was made, but wasn’t made within close proximity of a gas station. This report shows any purchases that exceed the amount of fuel a truck’s tank can hold. Using automated fuel reports can help businesses better understand driver behavior and improve fuel management. Implementing a GPS fleet-tracking platform, furthermore, can improve driver safety and reduce the risk of vehicle crashes. While it’s important that product is coming in and out on time, safety should always be top priority. Speeding, and aggressive and distracted driving not only put truck drivers and other motorists at risk, but can also lead to even greater delays and expensive liability claims. Driver safety reports can identify dangerous behaviors such as speeding,
FOOD TRACK & TRACE
harsh braking, rapid acceleration and sudden cornering. Managers can see which employees practice safe driving habits and which are in need of further coaching. Real-time alerts can also be set up to send notifications when drivers exceed the posted speed limit of a roadway or a user-defined speed limit. Monitoring driver behavior patterns allows businesses to hold drivers accountable and provide further training for those who need it. As a bonus, certain auto insurance providers offer discounts of anywhere from 5 to 15 percent to businesses that use GPS fleet-tracking technology to improve safety. This lets fleet managers take advantage of savings while protecting their drivers and business. While many companies have policies regarding cell phone use, it is difficult to determine if drivers are following the rules. Distracted driving is a major concern among commercial fleets. To ensure employees are focused on the road, businesses can use a technology that prevents calling, texting, emailing and surfing the web while a vehicle is in motion. Once the vehicle returns to a safe state, all functions are enabled and drivers can use the mobile devices again. Having a cell phone policy and distracted driving solution shows employees the importance of safety. Food and logistics professionals can improve operational efficiency, increase revenue and decrease costs using a fleet management solution. Companies that implement the technology can save up to 20 percent in fuel and labor costs, and achieve a return on investment in as little as one month. With the telematics industry still growing, there will be plenty of advancements in the functionality and features designed specifically for the food and beverage industry. SDCE
ABOUT THE AUTHOR WYN PARTINGTON is the vice president of marketing at NexTraq. The company’s applications—Fleet Dispatch, Fleet Metrics and NexTraq Connect—deliver the real-time data needed to optimize fleet operations.
SDCExec.com | September 2015 | SUPPLY & DEMAND CHAIN EXECUTIVE
9
FEATURE
{ AUTOMATING THE RECALL PROCESS}
By Jack Payne
IS IT TIME TO RECALL YOUR RECALL PROCESS? There’s no excuse for not being proactive in mitigating risk
T
he number of U.S. food products recalled, and the cost associated with those recalls, nearly doubled since 2002, according to several reports. With the recent influx in food safety issues, it’s no surprise the spotlight is burning brightly on supply chain management. Fatal mistakes made by well-known brands, like Blue Bell Creameries, called into question how manufacturers—and supply chain executives specifically— are executing two major components of food safety: prevention and response. Could it be time for supply chain executives to recall their own processes? Some still leverage antiquated and error-prone manual techniques, while others aren’t properly using the track-and-trace technology they have. With advancements in these solutions, supply chain executives have no excuses for not being more proactive in mitigating risks. When it comes to reducing the number of food recalls, preparation is prevention’s greatest ally. Continual 10
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
process refinement paired with the proper use of track-and-trace technology can greatly reduce the occurrence and effects of food safety issues. Establishing automated preventive measures, including mandatory product check points and quality tests during the procurement and manufacturing stages of the supply chain, can help identify issues faster and more consistently. If used correctly, track-and-trace solutions can notify manufacturers in real time so issues are addressed before the product leaves the production floor. Furthermore, accurately implementing track-and-trace technology into the supply chain provides you with greater visibility and actionable insight to improve pre-distribution processes. At the same time, in the event that a recall needs to be issued, track-and-trace technology can also quickly and easily kick-start the recall process in a more strategic manner—aiding in avoiding common pitfalls. Let’s say you manufacture a particular type of sauce and leverage a variety of outside vendors to source its ingredients. You also supply the sauce to thousands of grocery stores throughout the country. News hits about a listeria outbreak at one of your vendors’ plants. Now what? Without a clear understanding of the flow of product and materials coming and going, you jeopardize your brand and the well-being of consumers.
AUATOMATING THE RECALL PROCESS
Properly using track-and-trace technology can allow you to document your sauce’s ingredients and suppliers while also identifying—in real time— where sauce produced during the outbreak is located within the supply chain. This enables you to quickly determine every point of possible contamination and recall accordingly. Seemingly simple answers to questions like where, when, and what quantities products were shipped to and from are being missed daily by supply chain executives. Not knowing the ins and outs of your product’s lifecycle during a recall can truly cost you. In fact, according to Food Safety News, in more than half of the recalls occurring over the past 15 years, the recall cost affected each company more than $10 million.
Some lost more than $100 million and a few closed their doors for good because of the excess cost. Many supply chain executives have product tracing systems, but they differ in quality based on precision, and how far forward or backward in the supply chain they can track. Whether or not they can provide full control over the end-to-end process is critical to meeting compliance and maximizing efficiency.
NOT KNOWING THE INS AND OUTS OF YOUR PRODUCT’S LIFECYCLE DURING A RECALL CAN TRULY COST YOU.
Amidst growing consumer concern and compliance demands, increasingly more changes to the supply chain are necessary. Now is the perfect time to re-evaluate your recall processes to ensure you’re using the right technology to minimize revenue losses and maximize consumer safety. SDCE ABOUT THE AUTHOR JACK PAYNE is the vice president of solution consulting at Aptean. For the past 20 years, he has worked with the Ross ERP solution for process manufacturers and helping customers get the most value out of Ross ERP. He continues to work closely with the product management and development organization in providing input into future functionality requirements, and with the services organization in application of new functionality. He has authored several whitepapers and articles on a variety of topics, and has presented at several industry associations.
®
+1(412) 294-1990 info@nextlevelpurchasing.com
SDCExec.com | September 2015 | SUPPLY & DEMAND CHAIN EXECUTIVE
11
FEATURE
{ CONFLICT MINERALS UPDATE}
By Barry Hochfelder
Conflict Minerals:
THE PRESSURE REMAINS ON I As the courts affirm current U.S. filing requirements, Europe is developing its own, perhaps even more stringent, legislation
12
f you don’t think you’re affected by conflict minerals, just take a look around your house, office, plant, warehouse or fleet. They are there. Four common metals—tin, tantalum, tungsten and gold, often called the 3TGs—are present in products such as electronics, wiring, seat cushions, plastics, batteries, tools, glass, sensors, clothing and more. Why the concern? The warravaged Democratic Republic of the Congo (DRC) is vastly rich in natural resources, including cobalt, copper, cadmium, diamonds, gold, silver, uranium, tin, tungsten and more. Estimates of its mineral value are as high as $24 trillion, yet the country is poor—its gross national income is $190, the world’s lowest—and for almost two decades has been torn by civil war as rebel group after rebel group tried to establish control. More than 5 million people died since 1998 as a result of the wars and countless women raped. Control of the mineral wealth is behind some of the most violent atrocities. That’s where many conflict minerals come from, and that’s why supply chain professionals—actually, anyone in business who relies on these minerals to produce their products— are well aware of the Securities and Exchange Commission (SEC) conflict minerals rule. That rule now requires publicly traded companies to disclose whether they manufacture products
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
that contain conflict minerals as required by Section 1502 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. And if covered, comanies must disclose the facilities used to produce these conflict minerals, what efforts they have made to determine the mine or locations from which the conflict minerals came, and, ultimately, what actions they are taking to ensure that their use of these minerals does not contribute to the atrocities in the DRC, as well as eight surrounding countries in central Africa. Jane C. Luxton is an attorney with Clark Hill PLC in Washington, DC, who advises companies on conflict minerals compliance. She says that the Aug. 18, 2015 decision from the U.S. Court of Appeals for the D.C. Circuit reaffirmed that the SEC cannot force companies to state that their products have been found to be (or not) “DRC conflict free,” but it still requires reporting enterprises to disclose the results of their supply chain inquiries. “Even those who have taken steps to comply may not realize some corporate risks associated with supply chain diligence and transparency programs like the conflict minerals initiative, such as brand reputational exposure and heightened attention to anti-bribery law enforcement,” she says. “Savvy businesses should be considering measures to reduce vulnerability on multiple fronts as
CONFLICT MINERALS UPDATE
they implement new conflict minerals policies and procedures. “The rules,” she adds, “compel publicly traded companies—and by implication, their upstream suppliers— to trace the origins of any 3TGs contained in their products all the way back to the mine.” Manufacturers whose products contain the metals must conduct a reasonable country-of-origin inquiry, seeking information from vendors on whether the metals come from recycled materials, locations in the DRC or surrounding countries, known sites elsewhere or unknown sources. Depending on those answers, Luxton says, “Companies are required to undertake further diligence, potentially including an independent third-party audit. Regardless of the ultimate source of the metals, publicly traded companies that manufacture products containing conflict minerals must disclose the scope of their inquiry and file a Form SD with the SEC.” She says that even companies not subject to SEC requirements are being challenged by their customers who are demanding that their suppliers obtain the information, dragging ever-wider networks of companies into the scopre of the reporting scheme.
of industry solutions at MetricStream, a governance, risk and compliance apps company in Palo Alto, CA, agrees: “Building and maintaining a strong corporate reputation is paramount in business today, and generally speaking, companies want to be viewed as good role models and socially responsible in the eyes of consumers. They don’t want to be perceived as supporting corrupt practices that violate human rights. For this reason, the pressure from activists and watchdogs has traditionally been the bigger impetus for corporations to follow the law.”
THE EU STEPS UP The European Union (EU) is developing even stronger conflict minerals legislation, says Sinha. “The EU developed broader legislation than the U.S. It goes down to importers; this is different than the U.S., which says the organization needs to go straight to its supply chain to perform its conflict minerals due diligence directly. “Alternatively, the EU says that, if a company imports metal, then it would need to do the due diligence to understand if there are conflict minerals present. Because the EU legislation is geared more towards importers, it gets closer to the root of the issue than the U.S. version, which starts at the company level. The EU’s legislation may be more comprehensive in the long term.” Another thing that the EU has done, while not adding additional metals to 3TG, is to expand its reach to other countries in conflict areas outside of the DRC, including Indonesia and some South American countries. “If I were a U.S. multinational,” says Luxton, “I’d worry about the EU. It’s looking at every place that has a state of armed conflict. It’s triggering
WATCH OUT FOR THE WATCHDOGS There are watchdogs and activists, including consumer and investor groups, keeping a sharp eye on the proceedings. “In April of 2015, Global Witness and Amnesty International said 80 percent of companies filing with the SEC didn’t meet the minimum requirements. That’s a very high number, and it signaled the kind of scrutiny that is coming.” Sonal Sinha, associate vice president
“The rules compel publicly traded companies—and by implication, their upstream suppliers— to trace the origins of any 3TGs contained in their products all the way back to the mine.” — Jane Luxton
SDCExec.com | September 2015 | SUPPLY & DEMAND CHAIN EXECUTIVE
13
CONFLICT MINERALS UPDATE
“BECAUSE THE EU LEGISLATION IS GEARED MORE TOWARDS IMPORTERS, IT GETS CLOSER TO THE ROOT OF THE ISSUE THAN THE U.S. VERSION, WHICH STARTS AT THE COMPANY LEVEL.” — SONAL SINHA
14
questions. Their clients are saying, ‘Your competitors are disclosing. Why aren’t you?’” Sinha adds that the intent of the EU law is based on what didn’t work in the U.S. “It aims to create a law that is more common sense and easier to implement. However, it is still challenging, and there are still significant questions about how the EU law, if approved, would be enforced and how organizations would be able to effectively comply.”
OBJECTIONS The National Association of Manufacturers (NAM), as well as other organizations, challenged the rule,
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
Sinha says, “time and time again, [but] the law still holds firm.” Interpretation could change based on the outcome of present and future court rulings. NAM originally challenged at the district level, and the court upheld all of the rule and did not allow what is termed a de minimis exception, meaning, Luxton says, that even trace amounts of these metals trigger the conflict minerals disclosure requirements. (De minimis is Latin for “the law cares not for small things.”) “In addition, the final rule incorporated broad and, in some cases, ambiguous terms covering things such as catalysts—unless all of the catalyst material washed out of the product, it
CONFLICT MINERALS UPDATE
practices around conflict minerals. “Lastly, companies should attempt to gain supply chain visibility through audits and assessments, which can be done by third parties, or internally by their own employees who can visit the factories and/or the suppliers, and perform a surprise or planned audit.” While performing this due diligence, companies would be wise to keep their eyes open for other violations. “Where there’s conflict, there’s likely to be corruption,” Luxton says. “It’s not just conflict minerals. You have to be aware of other concerns, like the Foreign Corrupt Practices Act, sanctions laws, and human trafficking prohibitions. These things all have to be centralized
must be considered present and subject to the rule.”
VISIBILITY The question becomes how does a company gain visibility throughout the supply chain so it can comply? Sinha says, “companies must do due diligence with their suppliers. This can be done through surveys or polls, direct outreach and more. Additionally, companies can gain visibility through their distributors and manufacturers. For example, if a company is using a manufacturing partner to provide product development support, it would need to also inquire about that company’s sourcing history and
so you can be alert to all obligations you need to be aware of and handle. “Some of the biggest companies are looking for violations among their suppliers, including human trafficking. For example, Intel has its own on the ground truth squad. It goes through the entire supply chain to certify its suppliers. In 2014, some companies found gold from North Korea in their supply chains. That’s a violation of the Office of Foreign Assets Control (OFAC) of the U.S. Treasury.” Transparency and visibility may be considered by many in business as buzzwords, but if they’re not acted upon, the next business buzzword could be disaster. SDCE
SDCExec.com | September 2015 | SUPPLY & DEMAND CHAIN EXECUTIVE
15
FEATURE
{ SUPPLIER RISK}
By Mark Davis & Karen E. Gray
WHAT’S YOUR SUPPLIER RISK-AWARENESS LEVEL? Keep your sights set on these six critical factors
D
id you ever notice how even a tiny pebble tossed into a lake sends ripples across the water farther than you would expect? The modern global economy is like that lake, and not surprisingly, even a small disruption can ripple out to have a serious impact on business. While it may be easier to anticipate the ripples when the pebble drops in close to shore, even a disruption on the distant horizon can reach across the water to have an impact. Could the lack of rain in Brazil, for example, impact your supply chain? Let’s follow the ripples: A water shortage leads to problems at hydro-electric power plants, which leads to inconsistent power supply to manufacturers, which leads to—you guessed it—critical parts not being delivered where and when you need them. John Glen, Chartered Institute of Procurement and Supply (CIPS) economist, and senior economics lecturer at the Cranfield School of Management, wrote, “With no simple solution, supply chain managers must be the eyes and ears of their business wherever their supply chains lead.” Ongoing risk monitoring is crucial to understanding just how your supplier network could be impacted.
KEEP THESE SIX RISK FACTORS IN YOUR SIGHTS Vetting your suppliers is just the beginning. With bigger problems come bigger waves—and greater potential for damage. Without ongoing monitoring of your suppliers and risk factors that could negatively impact them, you could end up awash in problems. Consider these six risk factors:
ARE YOUR SUPPLIERS MEETING REGULATORY REQUIREMENTS?
The number of regulations continues to climb and you could be at risk of non-compliance—even if that lapse in compliance takes place somewhere along your supplier network. You need only review Foreign Corrupt Practices Act (FCPA) actions taken in recent years to know that a lack of awareness into third-party improprieties does not protect a company from prosecution. For regulators, it’s a case of “if you don’t 16
know, you should.” The Department of Justice, in fact, clearly indicates that companies must not only document third-party due diligence, but also monitor third parties, including suppliers, vendors or other agents, to ensure that the money paid to them isn’t funneled to inappropriate uses. Ongoing monitoring helps you mitigate compliance risk—and the financial and reputational losses associated with it.
ARE YOUR SUPPLIERS GAINING MARKET SHARE? According to
TriplePundit, a sustainability website, “Sustained loss of market share is usually one of the first indicators of a supplier heading toward financial stress in the medium to long term.” Any undercapitalized or fiscally unstable suppliers can pose significant financial risk to the corporation. For that reason, you need to keep tabs on news—especially negative news—
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
about your suppliers’ performance within their markets.
ARE THERE MACROECONOMIC OR POLITICAL TRENDS THAT COULD CAUSE PROBLEMS ALONG YOUR SUPPLIER NETWORK? Currency valuations and fluctuating energy prices can increase pressure on the third parties you depend on. Monitoring these trends can help you develop proactive strategies to adapt as needed. For example, China’s decision to crack down on pollution led to a drop in Chinese rare earth mining. It’s a positive step for the environment, but China is the top producer of rare earths. Since those elements are used in applications ranging from lasers to specialized glass, a sudden production downshift represents a challenge for some businesses—and perhaps an opportunity for others.
SUPPLIER RISK
DO YOUR SUPPLIERS HAVE DIVERSE CUSTOMER BASES?
how quickly natural disasters can hit—and the ripples that can continue for years after. And it’s not just a sudden disaster that you need to worry about. Weather experts are scrambling to anticipate the impact of El Niño, which looks to be the strongest on record.
Having all your eggs in one basket is rarely a good idea; one slip and you’re out of business. Likewise, if your suppliers rely too heavily on a single revenue stream, whether it is a single customer or a singular market focus, a downturn could make it difficult to sustain operations. Financial stability is an ongoing concern, so conducting financial due diligence at the start of your relationship is best complemented by continued monitoring of any risk factors that could eventually lead to less-thanstellar financial standing.
These are just a few considerations that companies must address when managing supplier risk. Successfully tracking supplier risk factors helps protect your company from the ripples that unforeseen circumstances can cause. Are you equipped to handle the challenge? SDCE
ESTABLISHING A PROACTIVE SUPPLIER MONITORING PROCESS While the challenges of monitoring suppliers for risk increase with the globalization of business, the tools for supporting a more robust supplier monitoring process are evolving as well. Rather than relying on historic financial data or supplier-reported information, you can leverage tools that provide near real-time access to critical news and information, so that you can better identify early warning signs of risk and begin the search for a replacement supplier before it’s an emergency. What should you look for in a supplier monitoring tool? ❯❯ A dashboard that facilitates a complete view of your supplier network, along with risk factors, at a glance. ❯❯ A comprehensive collection of global publications and relevant business information, ranging from news publications to trade journals to regulatory publications to analytical sources. ❯❯ Integration features that allow you to incorporate news and risk score results into your workflow for more efficient tracking and monitoring of suppliers. ❯❯ Alerts to keep you up to date with areas of interest, market trends and risks that could impact suppliers.
DO ANY OF YOUR SUPPLIERS HAVE A REVOLVING DOOR FOR EXECUTIVES? Constant change
among senior management can signal underlying problems that can lead to financial stress. The reverse can also be detrimental; a lack of change can be an indicator that suppliers are not evolving to meet a shifting marketplace. Keeping track of executive moves can improve your ability to foresee potential problems— whether caused by instability or resistance to change.
IS MOTHER NATURE ABOUT TO DISRUPT YOUR SUPPLIER NETWORK?
Sudden natural disasters and weather anomalies can have far-reaching consequences on supply chains. Recently, air travel around Indonesia was disrupted after an active volcano spewed forth a great ash cloud. Tsunamis, earthquakes and volcanic eruptions are all stark reminders of
ABOUT THE AUTHOR MARK DAVIS is an integrated solutions specialist at LexisNexis. He has 20 years of experience in technical sales and customer technical support. Prior to joining LexisNexis, Davis worked at other enterprise software companies in roles ranging from software development to pre-sales support. Most recently, he was the chief technical officer at SafeSourcing, an e-procurement software provider. KAREN E. GRAY is the senior supply management specialist for North America at LexisNexis. Serving as senior leader of managing supply management implementations, Gray is the point person in engaging with product and content planning to ensure LexisNexis solutions are maintained and enhanced in ways most beneficial to customers. She has over 30 years of experience in product engagement, implementation support and quality assurance.
SDCExec.com | September 2015 | SUPPLY & DEMAND CHAIN EXECUTIVE
17
FEATURE
{ MANUFACTURING}
By Gavin Davidson
Manufacturing Is Being Revolutionized Once Again,
THIS TIME IN THE CLOUD
Cloud computing provides manufacturers with massive amounts of computing power, storage, data and analytical tools
By taking a cloudbased approach, manufacturers can more quickly scale up (and down) and repurpose its manufacturing facilities without having to incur the massive information technology costs, time and maintenance overheads that would be required to effect change in antiquated on-premise systems.
18
E
ach major technology shift or revolution in the manufacturing industry includes the identification and then harnessing of a new type of utility. First, it was water and steam power, which brought about the mechanization of the production process. Next, came electricity, which enabled mass production, followed by the rise of electronics and computers, which then substantially increased automation of the production process. Now, in what may be called the fourth industrial revolution, the new utility is cloud computing and manufacturers are exploring this powerful change agent, which has the potential to remake the entire industry again.
CLOUD ENABLES LOCATION IRRELEVANCE AND THE OMNICHAIN Cloud computing provides manufacturers with massive amounts of computing power, storage, data and analytical tools. In contrast to earlier revolutions, in which manufacturing locations were determined by ready access to water, fossil fuels or electricity grids, the cloud effectively drives
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
location irrelevance. By moving entire operations to the cloud through a cloud-based business management suite, manufacturers have the opportunity to rethink and redefine their underlying supply chain operations. Instead of each factory and warehouse being separately managed and monitored like separate links in a chain, manufacturers can establish an omnichain, a single cloud-based environment built around a unified data set that fully integrates all supply chain business processes regardless of where they occur. In this cloud-based world, manufacturers can not only manage their own operations, but also those of their partners—so controlling and gaining insight into their entire supply chain, and therefore, the entire lifecycle of their manufactured products from prototype through finished product. As manufacturers and their suppliers work more closely together and share more information, third-party logistics providers (3PLs) and other partners effectively become a virtual part of the manufacturer’s own organization. By taking a cloud-based approach,
LLamasoft – the all-in-one platform for continuous supply chain optimization Supply chain design is a must-have capability for businesses to continuously optimize their supply chain operations and adapt to ever-changing supply chain design platform for credible, data-backed answers to tough what-if questions.
Service
production
Visualize and optimize your current supply chain... design and test the supply chain of tomorrow. We’ll help you get there.
Visit LLamasoft at booth #903 at CSCMP, September 27-30.
COST Inventory BENCHMARKING
.com
DataAnalytics SIMULATION
.com
DEMAND
risk
TRANSPORTATION
+1 866-598-9831
www.llamasoft.com/cscmp/sdce
MANUFACTURING
manufacturers can more quickly scale up (and down) and repurpose its manufacturing facilities without having to incur the massive information technology (IT) costs, time and maintenance overheads that would be required to effect change in antiquated on-premise systems.
CLOUD HELPS SHIFT FOCUS FROM MASS PRODUCTION TO MASS CUSTOMIZATION Having complete control and real-time visibility across the supply chain is vital today. We live in a customer-centric world in which customer expectations for product design, quality and availability are set high. It’s also a more disposable and faddish world in which the customer appetite is strong for the latest and greatest products, meaning the lifecycle for many products, particularly consumer electronics, is continually shortening. Customers are also interested in more personalized products, which means many manufacturers are leaning more toward mass customization— the mass production of individually customized products—than traditional mass production. As an aside, there may also be more interest from certain consumers in traditional, non-digital manufacturing techniques and a desire to purchase hand-crafted products, leading to the establishment of more boutique manufacturing plants. To meet the demand for mass products, which are then tailored to the needs of specific individuals, manufacturers need to determine when that personalization occurs, whether on the shop floor or, given rapid changes in buying patterns, as close to the point of ultimate purchase as possible—in the warehouse or even the store. The manufacturing process is 20
going to continue to become more digitized. Manufacturers will have to use new and emerging materials and technologies. They will have to put into place business processes that enable them to collaborate more closely on innovation and design with a broader set of communities, including partners, customers and potentially anyone around the world with some useful input and expertise. Some manufacturers may find that their primary purpose shifts, so while they still make and produce products, their core business is more about the paid services attached to those products. For example, today’s provider of a smartwatch is tomorrow’s web services expert provider. So, the watch becomes less of the business focus and more of a free item complementing the subscription services that provide that watch with all manner of easily consumable and useful data.
THE INTERNET OF THINGS AND 3D PRINTING’S IMPACT ON MANUFACTURING The emergence of the Internet of Things is also set to change the manufacturing process, and many manufacturers’ business models and focus. As more devices include embedded intelligent sensors, components and finished products can start communicating with manufacturers and each other from the shop floor. By having real-time access to transmitted component or product status information, manufacturers can act quickly to improve product quality since any issues or defects within components and products can be quickly communicated. There’s also the possibility of hooking the end customer into the machine-to-manufacturer two-way
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
communications, so the consumer can take ownership of the product and influence its design as it’s built. 3D printing is another technology with the potential to disrupt manufacturing, and not only the manufacturing of simple products and components. While today, manufacturers mostly use 3D printing to prototype products, in the future, as the printers become commodity items, they may become a household fixture in the hands of many consumers. Once that happens, some manufacturers may shift to focus purely on product design, while consumers make the products via their printers.
THE CLOUD FUELS AND FACILITATES THE MANUFACTURING REVOLUTION Cloud computing is providing the initial spark for the fourth industrial revolution and will remain its primary utility. As manufacturers are required to reinvent their businesses and processes to take account of mass customization, the Internet of Things and 3D printing, the cloud can help support those major shifts, and enable manufacturers to be more agile and responsive to all the forces of disruptive change. SDCE ABOUT THE AUTHOR GAVIN DAVIDSON, a vertical market expert for manufacturing, brings to NetSuite more than 25 years of industry experience. In his current role, he is charged with using his understanding of the product, marketplace and customers to increase sales, improve customer satisfaction and retention, and drive the solution maps for partner and product offerings. Prior to joining NetSuite, Davidson completed an apprenticeship in production engineering before taking on several consulting roles implementing a variety of manufacturing software products, such as Epicor, Microsoft Dynamics, Experlogix and Visual Manufacturing.
Demystify
your supply chain
in a highly digitized global world, getting your products from point A to point b accurately and quickly can make your Supply Chain seem like a troubling mystery.
TRANSPOREON GROuP CAN hElP yOu REmOvE All mySTERy fROm yOuR SuPPly ChAiN whilE POwERiNG GROwTh, iNNOvATiON AND AGiliTy fOR yOuR buSiNESS.
Are you ready to break the barriers of traditional Supply Chain transportation management approaches to unlock: • Growth? • Visibility? • The advanced technologies and capabilities of the cloud? • And, hidden strengths to improve your operations?
Then let’s talk.
Not only does TRANSPOREON Group provide global award winning carrier connectivity, SaaS networked TMS and e-Sourcing solutions recognized by Gartner with Notable Mention, we provide a partnership approach to solving your greatest and smallest Supply Chain transportation challenges. With 850 Shippers, 40,000 Carriers and 100,000 users worldwide, TRANSPOREON simplifies communication and connectivity between Shippers and Carriers, which leads to increased efficiency, streamlined execution, decreased costs, and increased profitability for both Shippers and Carriers.
Demystify your Supply Chain – contact us today and let us partner with you to solve your Supply Chain mystery. TRANSPOREON Group Americas 500 Office Center Drive Suite 400 Fort Washington, Pennsylvania 19034
Phone: 267-281-1555 ext. 2 Email: information@transporeon.com Web: http://www.transporeon-group.com/us
BEST PRACTICE
{ SOCIAL MEDIA ANALYTICS}
By Mark Osborn
Harmonizing
YOUR SUPPLY CHAIN TO SOCIAL SENTIMENTS
With the help of social media analytics, consumer products manufacturers can be one step ahead of the production curve
T
echnological evolution allows consumers to connect with the world through a handheld device, gaining (and providing) access to a wealth of information. Through social media channels, we’re able to instantly share news, pictures, videos and personal preferences. For consumer product brands, this means that the ability to predict consumer preferences just got a lot easier—and harder—at the same time. The data is right there, but how do we gather and analyze data, and put the insights into action? Figuring this out is key to harnessing preference information and can help consumer product companies develop proactive plans that deliver the right products, at the right time, to buyers that already want them.
ALIGN THE SUPPLY CHAIN TO FIT DEMAND
for materials, colors, footwear styles and prints around the world. For example, 65 percent of North Americans, and 67 percent of people in Europe, the Middle East and Africa noted denim as the preferred material for the upcoming season, while 87 percent of Middle Eastern Europeans favored fur and feathers. By tapping into global preferences like these, consumer product companies can begin to re-align supply chain strategies to suit consumer Material Matters Are you using consumer insights to coordinate your distribution centers? Give consumers the hot summer trends they want. By aligning your supply chain to customers’ buying behaviors and attitudes, you can purchase the optimal mix of materials. Social media analytics allows you to use real-time customer insights to inform your purchase decisions — and meet consumers’ fashion expectations.
Top Global Consumer Material Trends (percentage of mentions)
21%
42%
DENIM SUEDE SHEER
LEATHER
18%
3% 3%
LACE
13% FUR & FEATHERS
Follow @SAP_Retail, #SAPsupplychain, and #SAPfashion for more insights.
A recent SAP analysis of more than 175,000 social media mentions around summer fashion trends revealed some interesting insights about preferences 22
preferences and anticipate the items that may be more popular across different regions. As companies create products in response to this demand, another opportunity opens up. By correlating social sentiment with historical demand data from point-of-sale (POS) and syndicated data, brands can focus in on whether significant changes in consumer sentiment—positive or negative—contributed to corresponding swings in actual demand. The comparison findings can be used to identify where to prioritize production and promotional efforts in order to optimize inventory and availability to maximize levels of on-shelf availability and consumer satisfaction.
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
North America
Europe, the Middle East, and Africa
Denim – 65% Leather – 13% Lace – 12%
Denim – 67% Fur & Feathers – 17% Leather – 13%
Top three materials per region
Middle Eastern Europe Fur & Feathers – 87% Denim – 11% Lace – 1%
SOCIAL MEDIA ANALYTICS
Every Season Has Its Colors
Top Color Mentions
Are your in-store promotions streamlined for success?
Recent analysis shows that metallics are favorable in the Middle East and Europe, while reds are favorable in the greater China region, the Asia Pacific and Japan.
Understanding consumers’ buying behaviors around key fashion trends, including color, can help you align your supply chain procedures to optimize promotions, prices, and markdowns, resulting in increased customer satisfaction and inventory turnover.
Follow @SAP_Retail, #SAPsupplychain, and #SAPfashion for more insights.
IMPROVE THE CONSUMER EXPERIENCE Harmonizing the supply chain with trending audience preferences can improve the consumer experience by helping to ensure consistency and dependability. But recognizing which products consumers are hungry for is a critical part of creating an in-demand brand. One easy place to start is to uncover color preferences. In our recent analysis, the data showed metallic as favorable in the Middle East and Europe, while reds took precedence in the greater China region, the Asia Pacific and Japan. Simple insights like these, combined with historical behaviors, can be used to inform long-term planning. And, because social data can be gathered continuously, if color and style variations change to no longer align with long-term demand and supply plans, companies have an opportunity to make adjustments to product innovations.
METALLICS
BLACK & WHITE
BLUES
REDS
18,242 mentions
17,117 mentions
15,420 mentions
13,074 mentions
Send the right colors to the right markets: Metallics: Middle East and Europe
Black and white: North America Blues: North America
Reds: Greater China region, Asia Pacific, and Japan
Top color per region
Best Foot Forward
Top Shoe Trends Worldwide (number of mentions)
Top Shoe Types Worldwide (number of mentions)
Is your supply chain agile enough to ship the right products to the right places?
LEATHER
ATHLETIC
Consumers know what they want this summer. Stock up with the right materials with an optimized supply chain management system that lets you manage inventory accurately across many locations and operate a holistic logistics network.
Leather – 9,197
Athletic – 18,981
Boots/Booties – 4,616
Dress – 9,008
Lace-up – 2,176
Boots – 4,344
Ankle Straps & Buckles – 721
Sandals – 3,568
Gladiators – 460
Flats – 3,310
With the agility you need to move products quickly, you can ensure a fast, seamless, omnichannel customer experience, at any time and anywhere.
Follow @SAP_Retail, #SAPsupplychain, and #SAPfashion for more insights.
Lace-up: Latin America – 80%
for corresponding items can point to emerging materials trends that can help support tactical decisions and optimize supply planning, short-term forecasting and inventory management across the globe. With this level of insight, consumer products companies can make other strategic improvements, such as aligning regionally popular items with the correct distribution centers, and planning logistics and shipping details, and even staffing, based on specific distribution center and retail needs. Switzerland-based fast fashion brand TALLY WEiJL leverages SAP merchandising and supply chain management solutions to consolidate
BUILD ON EXISTING SUPPLY CHAIN TOOLS Using consumer preferences gathered from social media, combined with historical data from supply chain management systems, can help consumer product companies better optimize raw materials, logistics and even staffing. For example, the social media analysis revealed that athletic shoes had 18,981 mentions worldwide, while leather shoes had about half as many mentions. Comparing the frequency of mentions with ongoing demand
Gladiators: Europe, the Middle East, and Africa – 23%
Boots and booties: Middle Eastern Europe – 65%
Leather: Asia Pacific and Japan – 42%
Social media analysis revealed that athletic shoes had 18, 981 mentions worldwide, while leather shoes had about half as many mentions.
SDCExec.com | September 2015 | SUPPLY & DEMAND CHAIN EXECUTIVE
23
SOCIAL MEDIA ANALYTICS
Print Shop
Top Global Trends (percentage of mentions)
Are consumer insights determining how you should distribute? ANIMAL PRINTS
Fashion trends are always changing, and your supply chain has to keep up. Supply chain management solutions fueled by real-time insights into consumers’ buying behaviors, lets you accurately forecast and plan for consumer demands while keeping your local and global distribution centers well-stocked. These insights help you maximize sales through greater product availability, reduced inventory costs, and decreased ordering and transport costs due to optimized logistics.
60%
Send the right prints to the right markets: (percentage of mentions)
EXOTIC PRINTS
18% FLORAL PATTERNS
15% STRIPES
3%
Follow @SAP_Retail, #SAPsupplychain, and #SAPfashion for more insights.
POLKA DOTS
North America Animal Prints – 57% Exotic Prints – 18% Floral Prints – 18%
Middle Eastern Europe Animal Prints – 56% Floral Prints – 27% Polka Dots – 13%
2% Europe, the Middle East, and Africa PLAID
2%
Animal Prints – 82% Exotic Prints – 8% Floral Prints – 6% Top three materials per region
Floral prints blossomed in the spring of 2013, but only about 18 percent of North Americans are mentioning floral today.
ABOUT THE AUTHOR As the global lead of industry marketing for consumer products with SAP, MARK OSBORN has responsibility for the SAP Consumer Products marketing portfolio, including strategic planning, global positioning and messaging, analyst and media relations, digital marketing, and global go-to-market enablement for thought leadership, awareness and demand generation. Prior to SAP, Mark served in other executive roles in software solution management, marketing, development and professional services. He has a B.A. in history and English literature from Washington University in St. Louis, and an M.B.A. in management information systems and marketing from the University of Minnesota’s Carlson School of Management. 24
all its performance data and automate the planning process, all of which played a part in the brand’s average annual growth rate of 30 percent. With nearly 800 stores across the world, customizing for regions is top of mind. By tapping into social sentiment data, consumer product companies and fashion brands can add to the historical demand data and syndicated data they already rely on. Correlating trending keywords and other indicators of sentiment with available inventory and actual demand for key products in each region can give fast fashion brands an early warning system to spot and address potential issues, and prioritize how and where to focus to meet regional or seasonal demands. This ability to meet consumer demands as they change is a key growth driver for all progressive brands.
CONTROL INVENTORY Because preferences constantly evolve, it can be difficult for consumer products companies to keep up with trends. For example, floral prints blossomed on the runway in the spring of 2013; today, only about 18 percent of North Americans are mentioning floral prints. Consumer products companies that ignore the buzz around hot trends and simply push products out to consumers may be missing huge opportunities.
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
Similarly, brands that neglect to pay attention to consumer reactions may find themselves as the targets of negativity in social channels. For example, before Target launched its Lilly Pulitzer partnership, we can assume that marketers researched the audience and sought out a trend that coordinated to its customers’ needs. It seems that Target did not, however, anticipate the degree of the purchase response—which is something brands should be equally equipped to handle. By analyzing consumer social media conversations around a previous campaign (such as the Missoni for Target line) and correlating this with actual Missoni for Target sales, Target may have been able to predict the spike in demand for the Lilly Pulitzer line, and fine-tune its marketing and inventory availability (nationally or based on each region’s behaviors) to match. With the right insights, supply chains are able to get ahead of opportunities to deliver product that’s already in demand and maximize revenue by optimizing all stages of the supply chain. While harmonizing the supply chain to deliver on fashion trends based on social media analytics may feel like charging into unfamiliar territory, it’s a real-time insight into what consumers are thinking and feeling aligned in real time to what they’re actually buying (or not buying). Understanding what shoppers like, don’t like and what they’re looking for can add an increasingly valuable dimension of demand analysis to the distribution process, inventory management, expenses and growth—a win-win for all. SDCE
Control the chaos. Today’s manufacturing companies are challenged to optimize the logistical complexity throughout the supply chain. iManage™, a new Numerex Solution, helps companies use the power of the industrial Internet of Things (iIoT) to monitor the flow of parts, assemblies, and racks across their supply chains and among geographically dispersed suppliers and plants. Receive instant alerts when the tracked assets deviate from preestablished routes, or when stoppages, slowdowns, or problems occur. Numerex’s scalable IoT solutions including devices, network, and applications deliver actionable data to help customers make informed decisions. We simplify the complexity of machine interconnectivity—enabling the Internet of Things—so you can solve business challenges, produce new revenue streams, create operating efficiencies, and improve your bottom line. To learn more about iManage call 1-877-980-6208 today or visit numerex.com © 2015 Numerex Corp. All rights reserved. Numerex is a registered mark of Numerex Corp.
GLOBAL FOCUS
{ MEXICO}
By Barry Hochfelder
AUTOMAKERS DRIVING TO MEXICO
As original equipment manufacturers move into the country, suppliers and related industries bring economic growth
I
t may be a surprise to some that Mexico is the world’s eighth largest automaker and fourth largest exporter of auto parts in the world. According to the Detroit Free Press, virtually every automaker is adding capacity in the country. They include General Motors, Ford, Toyota, Mazda, Honda, Volkswagen, Audi, BMW, Kia, Nissan, Chrysler and more. Over the next five years, according to a recent PricewaterhouseCoopers (PwC) study, the growth rate of the Mexican automotive industry could reach the 5 to 9 percent range. The Mexican Automotive Industry Association says the automotive sector accounts for 6 percent of the country’s gross domestic product and 18 percent of its manufacturing production. About 80 percent of its total vehicle production is exported. Mexico has 10 free-trade agreements that give it access to 45 countries (and 1.2 billion people). Many manufacturers and industries are moving to Mexico for the less expensive labor force rather than outsourcing manufacturing to Asia. Companies looking to return from 26
further abroad are choosing Mexico (and Brazil) for their near-shoring access. “Investments have been announced by major manufacturers throughout the supply chain,” says the PwC study. “Local suppliers are increasingly being exposed to nontraditional markets and are developing their relationships with foreign suppliers, thus fostering the emergence of a strong local supply base.” Foreign direct investment also is on the rise in Mexico. Statistics from ProMexico, a government agency that strategizes to strengthen the country’s participation in the global economy, indicate that the automotive and autoparts sectors in the country accounted for 20.8 percent of total foreign direct investment. Investments between 1999 and 2013 by automakers in Mexico reached more than $30 billion. Companies in the light vehicle industry have 18 production complexes in 11 Mexican states. Work ranges from assembly to casting and stamping of vehicles and engines. Around 50 car and light-truck models are produced in the country. Business is just as good with heavier vehicles: 11 commercial vehicle manufacturers and two engine manufacturers for heavy trucks have production facilities in the country. Needless to say, related businesses are jumping into the arena. According to Eduardo Vega, managing director of Mexico-based Toyota Material Handling Capital. “We expect 100 to 150 Tier 1 and Tier 2 companies coming into the region this year.” He attended Cargo Week
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
Americas in Mexico City in June. Tier 1 companies are direct suppliers to the original equipment manufacturers (OEMs) and develop components that include engine parts, steering and suspension systems, air conditioning systems, electronic components and more. Tier 2 suppliers manufacture equipment and products used in the most advanced and specialized components of the automotive industry, such as forged, stamped, plastic and machined parts. Tier 3 suppliers provide inputs and raw materials to Tier 2 manufacturers. According to ProMexico, “The innovation of the automotive industry and the greater level of sophistication of the products that are manufactured force companies to improve processes and generate technology that fulfills the requirements of the terminal industry. As a result, auto parts manufacturing has followed the same trend, and within the development of the industry, companies focus on investing capital to ensure they have skilled staff and state-of-the-art machinery and equipment to supply assemblers.” The agency adds that many global corporate offices are beginning to delegate some autonomy to regional offices, giving the supply chain more efficiency with local companies that can meet their requirements, and are located through contacts between regional offices and local supply chains. Whether manufacturing for export or its own market, Mexico is a key player in the automotive market. SDCE
OCTOBER 5–7 | LAS VEGAS, NEVADA
YOUR KNOWLEDGE. YOUR CAREER. YOUR COMPANY. Be where supply chain is going at APICS 2015. Presented by the premier professional association for supply chain and operations management, APICS 2015 is the leading supply chain learning event of the year. Advance your impact with more sessions, more facility tours and more opportunities to exchange ideas than any other conference.
REGISTER TODAY!
APICS 2015 KEYNOTE SPEAKER:
APICS 2015 attendees will learn real-life business solutions and receive a free copy of The Real-Life MBA, written by Jack and Suzy Welch. This powerful duo delivers another business best-seller that serves as a modern guide for “winning the game, building a team and growing your career.”
JACK WELCH
Jack Welch is the legendary management expert and megastar CEO who led General Electric Company for 20 years to undisputed prominence. During his time, he grew the company’s market capitalization from $13 billion to over $400 billion. Learn from Jack at APICS 2015 as he shares his experiences and insights to help business leaders at every level advance their careers and companies.
apicsconference.org.
BEST PRACTICE
{ FOOD SAFETY}
By Kelly Kuchinski
RAISING THE STAKES ON PRODUCING OUR STEAKSr Food) (and Othe
Food poisoning, hospitalization and death are three reasons we need more automation in food manufacturing
28
W
e, like generations before us, are innovators. We seek to create advances in technology to make life easier. When we want it, we get it. We created and adapted to streamlining processes through automation, and it made work-life easier. But, in our automated glory, there is still one industry that lags behind, but not for lack of resources. The food and beverage industry seems hesitant to join the world of automation to the degree to which we need it. As recalls consistently rise, we must ask what can be done to better prevent these recalls. What are the critical elements manufacturers should know about automating the processes that play vital roles in these recalls? Let’s start with the landscape. Manufacturers’ first priority should be around the safety of their consumers. Yet, we still face these statistics that are direct results of food recalls: ❯❯ The economic cost of a recall is $77 billion annually. ❯❯ The average cost of a food recall ranges from $10 to $90 million. ❯❯ Consumer loyalty and confidence tend to decline following recalls. ❯❯ The stock price of an organization can fall 22 percent within the first two weeks of a recall.
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
There are three types of recalls that make up these statistics: ❯❯ CLASS I: the most severe recall as use or exposure causes serious harm and sometimes death. ❯❯ CLASS II: recall tends to be temporary or easily treatable, something like an allergen. ❯❯ CLASS III: recall typically harmless to the public, but in violation of Food and Drug Administration (FDA) regulations. The most common reasons that food and beverage products are recalled are: contamination with a pathogen, an undeclared allergen, a labeling or manufacturing error, or foreign object contamination. You may ask yourself why the industry is not taking proactive measures to prevent all of this and why it is not better regulated. In reality, the government recently took large strides in the fight against recalls. One example is the FDA’s Food Safety Modernization Act (FSMA), passed by Congress in 2010. Automation is the
FOOD SAFETY
ABOUT THE AUTHOR
ultimate objective of the FSMA, as it creates a more standardized operation industry-wide, better access to data, and more accountability if and when these requirements aren’t addressed. The act mandates comprehensive food safety hazard plans that call for the frequent evaluation of potential hazards, controls and critical points throughout the manufacturing process. Food companies must be vigorous in taking preventive measures against possible threats and have tactics to address any that may appear. The ruling exposed not only a generation interested in food quality and safety, but also preventing food recalls. So really, manufacturers only need to adopt this more comprehensive automated food safety management system. By doing so, they can eliminate the inefficiencies, risks and wastes that come with a manual paper-based system, and ensure they comply with food safety standards and procedures. This is the perfect opportunity for companies to implement quality management software (QMS), which can automate everything from complaints to investigations to corrective actions and change management to establish a closed-loop process across the entire enterprise. Cloud platforms simplify connecting to suppliers and contract vendors anywhere in the world in real time. This way, manufacturers don’t have to wait until an ingredient is received at the warehouse before submitting to a supplier. A QMS supplier quality management module provides the interface needed to address issues with specifications or non-compliance before it leaves the supplier’s facility, enhancing collaboration and visibility. So let’s demand the food and
beverage industry raise our steaks, and the stakes on food safety in the United States. SDCE
KELLY KUCHINSKI is vice president of product marketing at Sparta Systems.
CLOUD-BASED, EASY TO SET UP & USE
INCREASE REVENUE and PROFIT With BizSlate’s awardwinning software
Supercharge your business with powerful tools to manage orders, inventory and logistics from one, powerful, easy to use solution—at a price you can afford. » The right tool for measurable business improvement » Enable collaboration, visibility, and order continuity » Better information for better business performance » FREE lifetime, US-based support
FOR MORE INFORMATION OR TO SCHEDULE A DEMO
Email: info@bizslate.com | Call: 646.878.6405 | www.bizslate.com/sdc
SDCExec.com | September 2015 | SUPPLY & DEMAND CHAIN EXECUTIVE
29
CASE STUDY
{ DISTRIBUTION CENTERS}
By Del Williams
INSIDE THE COUNTRY’S LARGEST HOME FURNISHINGS WAREHOUSE Nebraska Furniture Mart’s warehouse systems deliver the goods
With a retail showroom big enough to fit three Wal-Mart supercenters inside and 8 million shoppers expected per year, getting the warehouse logistics right was essential.
30
W
hat does it take to run the country’s largest home furnishings store, Nebraska Furniture Mart’s DallasFort Worth location? After all, it’s a 1.3-million-square-foot distribution center with an attached warehouse and 560,000-square-foot retail showroom on 100 acres. With a retail showroom big enough to fit three Wal-Mart supercenters inside and 8 million shoppers expected per year, getting the warehouse logistics right was essential. Despite its massive size, one goal was to give customers the option of convenient delivery of purchased products to their cars within 8 minutes, according to Haynie Mayhew, a systems integrator at Precision Warehouse Design, a Dallas-based
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
warehouse systems design integrator that worked on a portion of the Nebraska Furniture Mart warehouse project. “Nebraska Furniture Mart had about 65,000 square feet of space above the customer pick-up area where customers come to get [their purchases] loaded and wanted a two-level storage system that could quickly deploy conveyable items down to the customers’ cars,” says Mayhew. He added that it was necessary to maximize storage by stock-keeping unit (SKU) and product volume in the area above the customer pick-up area, and a two-level pick module was perfect for that. Pick modules allow dense product storage, reduced material handling, and the ability to quickly and accurately fulfill multipleSKU customer shipments, particularly when designed as a multi-level racksupported system. To accomplish this, Precision Warehouse Design designed a twofloor, rack-supported, 62,000-squarefoot pick module. Since the pick module is so large, three vertical lifts were placed on one side of the structure to transport carts and palletized items to the top floor, and multiple conveyors installed on both levels to transport orders out of the storage space. About half of the pick module’s top floor is dedicated to pallet locations, with the remainder used for hand-
DISTRIBUTION CENTERS
stack bulk racking and shelving of primarily electronics and home goods, which are able to be conveyed. To ease access to the pick module and meet building code for fire egress, 10 staircases were installed within its structure. Since the pick module needed to support the weight of full pallets, picked product and several conveyors per level, the SK2000, a closed tubular, boltless pallet rack by Steel King Industries, a manufacturer of materialhandling and storage racking products, was chosen to meet strength, stability, durability and maintenance goals. Compared to open-back roll-formed columns, the closed tubular uprights are 44 times more torsion/twistresistant, with 250 percent greater frontal impact resistance and 68 percent greater side impact resistance. All beams are constructed of highstrength steel, and holes are placed on the column’s face, not the corners, minimizing strength loss. “With the pick module, we basically built a bridge over the top of the customer pick-up area, and some spans were over 15 feet holding up the top level, so the strength of Steel King’s closed tubular uprights made everyone comfortable with the design,” says Mayhew. To efficiently get pallets of product to the pick module’s top floor for storage, three PFlow vertical lifts were installed with specific cutouts within the pick module. While these three vertical lifts bring pallets of product up for storage, a fourth vertical lift integrated with a pallet-handling conveyor also brings large bulky product down from the top floor of the pick module as needed.
From the pick module, all items picked by hand are carried by one of six TGW and Alba conveyor system lines through one of two five-sided Datalogic scan tunnels. The first scan tunnel determines whether picked product goes down one of the approximately 35-foot-tall AmbaFlex spiral conveyors to the customer pick-up parking lot. There, store employees may match it with purchased items from other on-site storage locations and load it into customers’ cars for them, says Mayhew. The second scan tunnel and conveyor handle larger items, and similarly decide which picked product goes down a PFlow lift with an onboard conveyor to a different part of the customer pick-up area, where it may be matched with other purchased items and loaded into customers’ cars. Product not diverted to the customer pick-up area is conveyed about three quarters of a mile through the distribution center, where it goes down another spiral conveyor or PFlow lift to the replenishment area, which stocks the retail showroom floor. According to Mayhew, since the pick module was built over the store’s customer pick-up area and the floor was not level, care was taken to securely position and anchor it. Unlike some
racks with single anchor holes that make tougher access for anchoring, the Steel King SK2000 closed tubular, boltless rack has multiple offset anchor holes for flexibility in anchor placement and its heavy-duty nesting ridge helped to properly shim it into position for secure anchoring on the uneven floor. While boltless assembly eased the rack’s installation, its flushto-column base helps to evenly disperse load weight. After Nebraska Furniture Mart softtested its warehouse delivery system with purchases by friends and family about a week before opening to the public, the store had its grand opening to much acclaim. “Customer service is extremely important and Nebraska Furniture Mart of Texas is expected to serve the entire population of the Dallas-Fort Worth metro area each year, as well as many shoppers from surrounding cities and states. Thus, proper integration of the warehouse systems behind it is key to making that happen flawlessly,” concludes Mayhew. SDCE
COMPARED TO OPENBACK ROLL-FORMED COLUMNS, THE CLOSED TUBULAR UPRIGHTS ARE 44 TIMES MORE TORSION/TWISTRESISTANT, WITH 250 PERCENT GREATER FRONTAL IMPACT RESISTANCE AND 68 PERCENT GREATER SIDE IMPACT RESISTANCE.
ABOUT THE AUTHOR DEL WILLIAMS is a technical writer based in Torrance, California. For more information, please visit www.steelking.com.
SDCExec.com | September 2015 | SUPPLY & DEMAND CHAIN EXECUTIVE
31
ON THE FLOOR
{ AUTOMATED STORAGE AND RETRIEVAL SYSTEMS}
By Carrie Mantey
THE ERA OF THE AUTOMATED STORAGE & RETRIEVAL SYSTEM Customer demand for distribution speed and accuracy is driving automated storage and retrieval system implementation
32
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
“Y
our neighborhood dry cleaner likely installed a garment-onhanger carousel in the 1970s to hold more garments in the same space, give you your dry cleaning faster, and be certain they give you your suit and not your neighbor’s,” analogizes Chris Lingamfelter, vice president of integrated system sales and strategy, Intelligrated. Now, warehouse and distribution organizations are doing the same thing with automated storage and retrieval systems (AS/RS), and for basically the same reasons: to increase storage density, boost pick rate, improve order accuracy and decrease labor costs. An AS/RS employs various computer-controlled systems to automatically place and retrieve loads from pre-specified storage locations. As opposed to a laborer physically moving from location to location, the AS/RS transports the items or stockkeeping units (SKUs) to the appointed laborer or destination. “Increased online shopping now requires most distribution centers to pick, pack and ship smaller, more frequent orders. The most efficient way to process these orders is to use miniloads or shuttles, which bring a case or tote to a goods-to-operator (GTO) picking station. Most distribution centers in the United States operate on a principal of operator to goods (OTG) whereby the operator has to travel to the product, either by walking or by riding on a vehicle,” continues Lingamfelter. “An AS/RS turns this
AUTOMATED STORAGE AND RETRIEVAL SYSTEMS
dynamic around, using a mini-load or shuttle system to automatically bring product to the operator. By eliminating the travel time, the operator becomes 25 percent more efficient in a highly dense batch-pick environment, and up to 75 percent or more in a large distribution center (DC) with singleorder picking across very long travel distances. As with all automation equipment, DC operators trade capital investment in return for reduced operations expense.” Other benefits of an AS/RS include: ❯❯ A return on investment (ROI) that, although it varies, can range from three to five years. ❯❯ Maximized storage density, potentially delaying costly brick-and-motor expansions. ❯❯ Reduced labor and equipment costs, while increasing workplace safety. ❯❯ Increased warehouse efficiency, accuracy and productivity. ❯❯ Better inventory accuracy and reduced inventory levels. ❯❯ The flexibility to grow the system in storage capacity and throughput. ❯❯ A prospective lifespan of 20 to 25+ years. ❯❯ Less land usage, lower energy consumption, less waste and lower maintenance costs.
According to Chris Castaldi, director of business development at W&H Systems, there are three basic kinds of AS/RS:
MINI-LOAD AS/RS
This AS/RS provides a high-speed, high-density buffer that replaces conventional static rack to maximize vertical storage space within a compact footprint. The mini load AS/RS moves and stores irregularly shaped goods or parts placed in: stacking totes, collapsible totes, nesting containers and case/cardboard boxes. Items are transported to and from this AS/RS by conveyor, shuttle fork, side belt, side clamp, sorting transfer vehicle (STV) or automatic guided vehicle (AGV).
GANTRY-LOAD AS/RS
This AS/RS incorporates a gantry or lifting beam design for optimum volume utilization and maximum performance. This type of AS/RS is designed for small load applications, and may be installed across a length of up to 32.8 feet and can be used for building heights of up to 59 feet. It accommodates different types of load handling devices, working as a compact and highly dynamic storage and retrieval solution for single- or double-deep storage of totes, cartons or trays.
PALLET-LOAD AS/RS
This heavy-duty AS/RS automatically handles pallet loads, rolls or containers using lifting carriages with telescopic forks and/or cabs. Single- or double-deep loads can be accommodated, and pre-engineered extraction and insertion devices are available to suit your product type and size. Large products are handled gently and consistently.
for delay, errors or delivery of lowquality products. Integrating an AS/ RS with warehouse materials-handling systems simplifies the picking process to improve order fulfillment. “Due to driver shortages and high turnover rates, the reliability of trucks is adversely affecting the warehousing industry. In order to overcome today’s trucking and transportation issues, and make the entire logistics plan more reliable, warehousing and distribution companies are implementing just-intime ( JIT) order fulfillment strategies. The idea behind JIT order fulfillment is to prepare orders right when the truck arrives on site, as efficiently and
WHY AS/RS? According to Staci Cretu, marketing and communications manager at Westfalia Technologies, Inc., “Order fulfillment is a more complex process than ever. In today’s fast-paced business environment, customers demand and expect more, as their orders are more frequent, contain more diverse SKUs and require more customized solutions. There is no room
quickly as possible. However, with a manual labor force and a traditional warehouse storage system, JIT order fulfillment is almost impossible. Instead of spending more money, increasing staff or expanding existing real estate, organizations are looking to an AS/RS.” Another reason that AS/RS implementation is steadily on the rise now is because omnichannel fulfillment is exponentially becoming a business must. “Omnichannel fulfillment processes are placing critical constraints on materials-handling processes, in particular meeting specific shipping criteria—same day
SDCExec.com | September 2015 | SUPPLY & DEMAND CHAIN EXECUTIVE
33
AUTOMATED STORAGE AND RETRIEVAL SYSTEMS
“With Baby Boomers nearing retirement age, distribution centers are finding themselves having to increase productivity and accuracy with less labor. Adding an automated storage and retrieval system that reduces the labor content is an attractive solution for many distribution center operators.” or next day,” Chris Castaldi, director of business development at W&H Systems, says. “An AS/RS in this situation can stage items for shipping, and then properly sequence them for distribution, helping managers streamline their operations more efficiently. Ever higher speeds and multiple flows of items in storage are among the trends currently being seen in AS/RS for wholesale, retail and production warehousing.” Furthermore, there is more than one way to take advantage of an AS/RS’s benefits. While the primary function of an AS/RS is the storage and retrieval of inventory, other applications can additionally enhance operational efficiency. These AS/RS applications can include: ❯❯ Order picking to replace manual labor by automating the fulfillment process. ❯❯ Product sequencing or buffering to improve the pallet-building process by enabling the sequenced palletizing of items in ways that comply with customer requests. This supports mixed-unit load, full-case break-pack order fulfillment, order consolidation and sequencing for route-based delivery. ❯❯ Manufacturing buffering to decouple manufacturing processes, permitting greater efficiency in staging or assembly. 34
Lingamfelter adds, “We believe that more and more AS/RS will be sold in North America. As these systems gain popularity, prices will fall, opening up more opportunity to apply the technology more broadly, benefiting more DC operators. They have been popular in Europe for some time, where land, wages and labor regulations are higher. However, a shrinking workforce and wage pressures, such as increases in the minimum wage, are creating a market in the USA that more closely resembles Europe. With Baby Boomers nearing retirement age, DCs are finding themselves having to increase productivity and accuracy with less labor. Adding an AS/RS system that reduces the labor content is an attractive solution for many DC operators.” “Especially when it comes to travel time between pick locations,” Cretu concurs. “An AS/RS brings the products close to the shelves with high velocity, while the storage and retrieval machine (S/RM) assures that the picker always has product available in the right position. There is no redundant or repetitive manual material handling, so human error is minimized. On top of greater productivity and faster picking, distributors increase order accuracy and reduce product damage. Also, an
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
AS/RS helps keep workers safe. There is no need for arduous lifting and forklifts are not driving around in the same aisles as people.”
WHAT’S OUT THERE? The most advanced contemporary AS/RS can accommodate virtually any order-picking strategy. Cretu elaborates, “It is possible to incorporate pick tunnels within the rack structure to operate with pick-to-light/voice technologies, as well as configure the system to handle products of various shapes and sizes, high movers and slow movers, and even non-palletized items. With an AS/RS, organizations can establish efficient picking processes, routes and sequences to enable better overall performance of the warehouse. Although the methods behind order picking will stay the same, the tools enabling it will become more advanced and in line with companies’ specific needs.” Lingamfelter believes that return on investment is driving the implementation of AS/RS solutions: “Unlike other vendors who sell a widget, we design a solution around the customer’s business objective. The technology used depends on the customer’s objectives and the physical environment. Some of the factors we consider include the size of the warehouse, whether or not the product is ambient, the necessity of a cooler or freezer environment, how many SKUs in inventory and shipped per day, full or mixed-load pallets, semi-automated or fully automated, etc. Taking all of the design criteria and customer objectives into consideration assists us in determining the best solution to implement at a certain location.” SDCE
The problem with ERP isn’t the box it comes in. It’s the box it puts you in.
The old-fashioned software-based approach to supply chain management definitely has its limits. But what‘s really unfortunate is the limit it puts on your company‘s global trading potential. At GT Nexus, we set you free by putting your entire supply chain in the cloud. ERP is slow; the cloud is fast. ERP is expensive; the cloud is cost-efficient. ERP leaves you talking to yourself; the cloud gets you talking with your whole network. On-demand and in real time, you‘ll be able to respond to every opportunity and every challenge with the kind of speed and precision you‘ve never known before. It all translates into higher profits. Isn‘t it time you started thinking outside the box? Get your supply chain in the cloud.
gtnexus.com
BEST PRACTICE
{ BUSINESS INTELLIGENCE}
By Donna Fritz
W
TO CHOOSE A BUSINESS INTELLIGENCE SOLUTION
hile the concept of business intelligence (BI) has been around for a while, advances in Big Data have driven a number of new solution providers into the market. This variety is good news for midmarket companies because BI has long been considered an expensive and complicated tool that could only be afforded by larger enterprises. Increased competition, however, is quickly driving prices down, features up and expanding deployment options to meet a number of business models. And while mid-market companies stand to benefit from all these new providers, the influx of solutions has created a noisy marketplace. This article can help mid-market companies cut through the clutter by providing cost-saving advice for choosing supply chain BI solutions.
KNOW YOUR DATA SOURCES.
36
KNOW HOW AND WHAT YOU NEED TO MEASURE NOW AND IN THE FUTURE. Like any system that drives decision-making and is heavily data-dependent, incorrectly implemented BI can produce misleading reports and encourage decisions based on inaccurate information. Consider: ❯❯ Existing key performance indicator (KPI) measurements. If you have formalized KPI measurements, such as a balanced scorecard, you know that compiling that information requires a good deal of manual data-gathering and chart-building. Before looking at new BI solutions, evaluate your current KPIs. Determine if your current reports are sufficient and cost-efficient. Do you have future enhancements to the reports planned? Those should also be evaluated. Then determine the scope of the reports you would like covered in the BI tool. If other areas of the company—such as finance, sales or customer service—also use a balanced scorecard, you may be able to combine requirements by implementing a more centralized solution. ❯❯ Informal KPIs. If you operate with more informal KPIs, it may be time to formalize your measurement system, and implement some disciplined data collection and evaluation processes around your critical indicators. Formalization doesn’t have to be time-consuming and complicated; it can be a simple, standard process that states the indicator, how often it is measured, thresholds, why it is important, the source data, the calculations required and the department/position resources responsible. Reports are only as accurate and valuable as the data that drives them. BI tools are designed to integrate data from multiple systems, which all need to be able to export the data into the BI tool’s data warehouse or other storage area. To ensure this process runs smoothly: ❯❯ Identify each system that stores data for the reports. If the data is housed in multiple places, understand the differences between those storage units. Knowing your data storage sites is important when complex calculations are leveraged for more sophisticated reporting. ❯❯ Identify the data’s accessibility. You need to know the amount of effort required to export your data, whether or not the export can be automated, and if the export is in a format that is easily usable.
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
BUSINESS INTELLIGENCE
KNOW WHY AND HOW YOUR COMPANY MAY USE THE DATA. Some companies work from a wish list rather than a needs list simply due to the dramatically expanded BI options. The result can be very costly, especially if the wish list includes data from less accessible systems or reports that add little overall value. Keep in mind these three steps when creating your needs list of reports from the system: ❯❯ If you already have a formalized KPI measurement practice, it’s a good time to revisit the objective, tangible value of each metric you want to include. ❯❯ If you measure KPIs informally, loosely mock up what you would like your reports to look like, including the data sources, how the metrics are calculated and, most importantly, the tangible decisions that can be driven by the data. ❯❯ Brainstorm with key stakeholders to understand what data and reporting could be more beneficial to decision-making, such as, “If we had this, we could do this.” Vet each requested report carefully by asking hard questions like, “What tangible business benefits can it provide?” Many companies have reports that provide little to no meaningful contribution to the organization’s decision-making at any level, and simply consume resources and margin.
SHOP AROUND. The emergence of fierce competition in the BI market means that you’re in the driver’s seat. To take advantage, create a prioritized list of requirements to hand your existing technology partners. Here are three tips to help evaluate solutions: ❯❯ Confirm that the solution can be deployed based on your information technology (IT) environment and corporate purchasing policies. Although it’s historically an on-premise offering, BI is increasingly available in the cloud. Both have pros and cons ... ❯❯ On-premise, perpetual license solutions come with higher upfront costs and generally higher total cost of ownership because internal resources are often required for maintenance and upkeep. Software upgrades can be included in maintenance, but implementation of the upgrade is usually a fee-based services engagement. With on-premise licensing, you need to procure the hardware and additional operating system/database licensing to run the solution. ❯❯ Cloud-based subscription (i.e., license lease/rental) solutions come with lower upfront costs and generally lower total cost of ownership because you do not need to purchase hardware and internal resources are far less involved in ongoing maintenance. Upgrades are also typically included in the subscription pricing.
your supply chain Only Logility Voyager Solutions™ can help you leave the competition behind by getting the right products at the right cost to the right place at the right time.
• Grow your Business • Improve Margins • Outperform the Competition
WWW. LOGILITY.COM NA: 800-762-5207 • EMEA: +44 (0) 121 629 7866
SDCExec.com | September 2015 | SUPPLY & DEMAND CHAIN EXECUTIVE
37
BUSINESS INTELLIGENCE
IF YOU DO YOUR HOMEWORK SUFFICIENTLY, YOU SHOULD BE ABLE TO ANALYZE EACH SOLUTION USING A CHECKLIST OR MATRIX WITH THE SAME CRITERIA.
If the solution is multi-tenant, implementation is usually faster and lower cost than on-premise solutions because the data integration connectors are typically pre-built and often require only minor modifications. Some cloudbased offerings do, however, offer a lower level of configuration of standard reports and customization. ❯❯ Make sure the solution is highly regarded within the BI industry. This reputation can stem from analyst and customer grades, and also from the strength of vendor partnerships. ❯❯ Compare apples to apples. It may be a cliché, but to choose the BI solution that is best for your company, you need to cut through marketing and evaluate solutions on a level playing field. Because
The Demand Sensing Revolution How to increase perfect orders and lower your inventory levels
Video case study explains how a top consumer products company is:
• Capturing true consumer demand under constrained supply conditions • Maximizing their revenue and trading partner revenue while minimizing inventory • Gaining insight with smart analytics that give visibility into lost sales, retailer orders, and forecast accuracy
http://go.onenetwork.com/roi
BI is a valuable tool that can help assess and monitor the health of your supply chain operations. It can be used to build stronger relationships with suppliers, secure better pricing and serve as an early warning system for issues, such as supplier on-time delivery performance, that can negatively impact customer satisfaction and your bottom line. While the cost of on-premise BI systems was historically prohibitive, new cloud-based solutions that are priced more appropriately for mid-market companies are entering the market. If you are prepared in your BI evaluation—and ask the right questions and come armed with answers to the negotiating table—you can acquire a BI solution that improves your ABOUT THE AUTHOR business operations and bottom line. SDCE
38
each vendor wants you to believe their solution is unique, they often avoid comparisons with competitors. If you do your homework, you should be able to analyze each solution using a checklist or matrix with the same criteria. There are a host of factors that you should consider, including: WW Do you have the ability to create complex reports or are you limited to basic reports? Can the solution use complicated algorithms to produce outcomes that you need? WW Does the solution have a dashboard with a powerful user interface? Do your current employees need extensive training to learn how to operate the new system? WW Can multiple departments link to the system? Does the dashboard provide just one view or can you have multiple views based on department login? Can you use it as a centralized solution?
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
DONNA FRITZ is the vice president of marketing and product management at TAKE Supply Chain.
BEST PRACTICE
{ SUPPLY CHAIN EXECUTION SOFTWARE}
By Randy Marble
START A CHAIN REACTION OF SUCCESS WITH THE RIGHT SUPPLY CHAIN EXECUTION SOFTWARE address ever-changing shifts in customer demand. As a result, many companies are now using supply chain execution software for better visibility and decision-making to enhance the management of their entire distribution center operations.
SINGULAR VISIBILITY OF DATA
T
he past was a simpler time for distribution operations. Technology was relatively straightforward. The supply chain wasn’t always on. There was no such thing as omnichannel distribution. However, today the supply chain is a lot more sophisticated—by necessity. Technological advancements and improvements are ushering in a new era. These days, software is leveraged to not only manage and improve material-handling equipment, processes and systems, but also to 40
The first decision a business needs to make is whether to build its own supply chain execution software or partner with an experienced vendor. Partnering is typically the best option, so organizations can focus on their core competencies and customer service. Insist on supply chain execution software that delivers business intelligence, analytics and reporting, and culls data from multiple management systems into a single dashboard. Otherwise, users may find they are wasting significant time pursuing the data they need. Often, a warehouse management system looks only at its own database of
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
With an increasing number of solutions available, distribution leaders should focus on advanced capabilities to gain improved productivity and profitability
information; the same holds true for inventory management and purchase order systems. When employees need crucial information for decisionmaking, they have to track down that data from disparate systems. It is a rigorous and time-consuming process. What’s needed is a supply chain execution platform that brings together all of the requisite data for flexible and accurate decision-making. Users can access all of the necessary information from one central hub and, in turn, the solution can guide decision-makers with real-time data to resolve breaking issues.
ASSESSING THE DATA The best supply chain execution solution in the world is worthless to an organization if it does not provide the information that the operation needs most when it needs it. Performance in a distribution center now affects the bottom line. And the supply chain is so much more a component of profitability than ever before. Just
SUPPLY CHAIN EXECUTION SOFTWARE
ask parcel delivery firms, which are long way in bolstering both. solution can help guide the manager experimenting with package pick-up In a distribution center, employees on how to handle interruptions. points to avoid multiple failed homedon’t always enjoy the overtime Managers can use solutions with this delivery stops and the unprofitable last presented them. Many prefer a worklevel of sophistication to forecast how mile of the supply chain. Analytics that life balance. When management takes many employees each shift requires, measure the efficiency measures that help and realize improved productivity and and effectiveness of a achieve the desired profitability. warehouse operation balance, it fosters When it comes to investing in are important, but the good will. And it software for supply chain execution, best tools are the ones ultimately benefits the distribution operations are wise to that can look into the organization as well. take a holistic approach. They should future, not just evaluate The right solution consider a solution that gives them yesterday. should also promote clear visibility into data across disparate Analytics tools workforce flexibility. platforms, insights from advanced are surpassing their For example, if 100 analytics, and a platform to improve traditional origins. employees work productivity and employee satisfaction. Forward-looking in a distribution Their livelihoods depend on it. SDCE analytics solutions center, management are taking advantage often expects that ABOUT THE AUTHOR of technologies 95 percent of those RANDY MARBLE is the vice historically used in people show up on president of software solutions at other industries to a given day. What if Wynright Corp., a wholly owned make a positive impact only 87 percent show subsidiary of Daifuku North America, and a U.S.-based provider of intelligent materialon warehouse distribution. up one day due to an outbreak of the handling systems. Wynright designs, manufactures, For example, demand on products flu? The manager must know how to integrates and installs a full spectrum of such as backpacks increases keep operations running smoothly intralogistics solutions. Marble can be reached at significantly in late summer and early despite the shortage. An advanced rmarble@wynright.com. fall due to back-to-school sales. With numbers from previous seasons in mind, management can decide exactly how much to Results Through Applied Intelligence® accelerate backpack production. Furthermore, using supply Industries JVKellyGroup, Inc. provides cost reduction and risk mitigation solutions for chain execution software, JVKellyGroup has worked some of the world’s largest organizations. By offering an integrated set of with some of the world’s largest organizations across multiple users can leverage planning analytics, sourcing services and technology, JVKellyGroup helps ensure that industries including: a company’s spend is effectively analyzed, sourced, managed, and monitored. capabilities to hire and train » Financial Services » Pharmaceuticals seasonal employees ahead of Why JVKellyGroup, Inc.? » Manufacturing Clients benefit from the expertise of years of experience our consultants have in actual sourcing » Automotive time, rather than scrambling to roles including former CPOs, VPs of Procurement and Sourcing, Buyers, Analysts and Sourcing » Business Information Technology Developers. » Government/Public Sector catch up with the rush.
THE BEST SUPPLY CHAIN EXECUTION SOLUTION IN THE WORLD IS WORTHLESS TO AN ORGANIZATION IF IT DOES NOT PROVIDE THE INFORMATION THAT THE OPERATION NEEDS MOST WHEN IT NEEDS IT.
IMPROVING PRODUCTIVITY AND PROFITABILITY Employee satisfaction and productivity can make or break a distribution operation. Supply chain execution solutions go a
Our services will help decrease sourcing cycle time, increase potential savings capture due to expertise in commodity areas as well as improve supplier relationships and mitigate supplier risk.
» Retail
Experience With a team of professionals, averaging more than 15 years of hands-on, industry experience, our projects provide practical solutions and quantifiable benefits. JVKellyGroup has led engagements across a diverse range of industry verticals and worked with virtually every category of indirect spend.
CONTACT US TODAY! phone: 631-427-2888
email: info@jvkg.com
web: www.jvkg.com
SDCExec.com | September 2015 | SUPPLY & DEMAND CHAIN EXECUTIVE
41
FINAL THOUGHTS By John Costanzo
3PLS RISING TO THE CHALLENGE of Omnichannel Demands Key to the strategy is a data-driven, innovative solution that is essentially customized for a business’ precise needs
I
t used to be that “you can pick it up in 20 minutes” was strictly the purview of the takeout pizza industry. But nowadays, customers expect fast and flexible delivery options. And as my company learned recently through a survey of U.S. and Canadian online consumers, price can be a determining factor in just how fast a customer wants a shipment, with a majority saying they would sacrifice speed for low-cost— preferably free—shipping. The good news, though, is that third-party logistics providers (3PLs) are rising to the occasion and leading the way. Third-party providers are helping businesses not only adapt to the new reality of omnichannel, but also embrace the concept as an opportunity to distinguish themselves
phones, tablets, connected vehicles and appliances is never analyzed or acted upon. Further, as much as 60 percent of this data begins to lose value within milliseconds. This is why businesses are relying on 3PLs to capture the truly useful information and put it to work. The result? Better inventory management, optimal route planning, cost analysis, and perhaps most important, full visibility into everything. Effective data analysis has many benefits, not the least of which is providing a competitive advantage. In fact, a separate analysis by IBM noted that organizations that successfully integrated analytics outperform their peers by 220 percent. The key to all of this is a highly integrated technology solution—a
SMART 3PLS ARE REALLY SHINING IN THREE KEY AREAS: technology, innovation and collaboration. from competitors and offer a superior customer experience. Smart 3PLs are really shining in three key areas: technology, innovation and collaboration. I frequently hear from our customers that they are “drowning in data, but starved for information.” This supports analysis by IBM, which estimates that as much as 90 percent of all data generated by devices such as smart 42
warehouse management system that can talk to a transportation management system, with everything linked directly to the 3PL that ties everything together with a big-picture logistics strategy. At the core of that strategy is a data-driven, innovative solution that is essentially customized for a particular business’ precise needs. A medical-products manufacturer in
SUPPLY & DEMAND CHAIN EXECUTIVE | September 2015 | SDCExec.com
Canada, for example, faced an ongoing challenge of having its business-tobusiness shipments packed and ready for shipment in time for its scheduled daily 6 p.m. pickup. The problem was that, since most of the manufacturer’s customers were doctor’s offices, hospitals and medical supply stores, employees did not place their orders until late in the day. Once orders were placed, virtually every one was for next-day service. The manufacturer reached out to its logistics provider, and together they looked at the data and developed an alternate plan. Now, the manufacturer better predicts customer orders and the 3PL pushed back its pickup time. This level of collaboration happens every day. Businesses that, a few years ago, could not conceive of accommodating an omnichannel strategy now offer a complete menu of capabilities ranging from buy online/ pickup in store to next-day guaranteed delivery to buy online/return to store. Businesses rely on their 3PLs to be a step ahead when it comes to anticipating their needs and those of their customers. Businesses expect their 3PLs to have timely solutions that distinguish them from their competitors. And with customer expectations for faster and better intensifying by the hour, 3PLs can look forward to a continued seat at the table. Perhaps, in some instances, at the head of the table. SDCE ABOUT THE AUTHOR JOHN COSTANZO is the president of Purolator International.
2015
Educational Webinar Series
Details & Registration: SDCExec.com/Webinars Attend for FREE thanks to our sponsors 1:00 p.m. ET | 12:00 p.m. CT | 11:00 a.m. MT | 10:00 a.m. PT
Risk Management
Procurement
Part III
Part II-A
Wednesday, October 21, 2015
Thursday, September 17, 2015
Safeguarding Your Data
Procurement and Your Suppliers ‌ Continued
Big Data! How do you identify what information you need to protect and how high a level of protection is required? What investments, both financial and in resources, are required?
In September, a new panel will take the procurement supplier discussion to the next level, building on the August concepts and covering additional strategies to help you make your supplier relationships a win-win for both sides.
Sponsored by:
Sponsored by:
Part III
Wednesday, December 9, 2015 NEW TIME: 11 A.M. ET
Procurement Outsourcing: Is it Worth it?
While there are benefits, there are serious issues to consider. You have turned control of part of your business to a third party. If that entity loses efficiency or reliability, where does that leave you? Sponsored by:
AVAILABLE ON-DEMAND:
SDCExec.com/Webinars Part I The Risks of Globalization
Part I Procurement Challenges for the
Part II Have You Thought Out Your Strategy?
Small- and Mid-Size Company Part II Procurement and Your Suppliers
Interested in sponsoring a webinar? Contact Jolene Gulley at 480-413-0354 or jgulley@ACBusinessMedia.com for more information.
Why settle for quotes when you can have real-time rates?
Âť
ShipHawk is the only platform to offer: - Real-time rates for parcel, freight, and specialty. - Access to the most diverse shipping options. - Tracking visibility from schedule thru delivery.
Learn more at:
go.shiphawk.com/SDCEX Learn more at go.shiphawk.com/SDCEX
Š
Global Solutions for Supply Chain ROI
The Global Enabled Supply and Demand Chain Map This map provides the solutions and services that can give your supply chains a competitive edge
Version 30.0
Index of Advertisers
Index of Advertisers
APICS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
LLamasoft, Inc.. . . . . . . . . . . . . . . . . . . . . . 19
Old Dominion Freight Line, Inc. . . . . 14, 15
ShockWatch. . . . . . . . . . . . . . . . . . . . . . . . 39
BizSlate Inc.. . . . . . . . . . . . . . . . . . . . . . . . 29
LLamasoft, Inc. is the global leader in supply chain design software and solutions, helping organizations worldwide in a variety of industries optimize and simulate their networks for huge savings in cost, sustainability and risk.
Old Dominion Freight Line is a leading less-than-truckload (LTL) carrier with more than 220 service centers nationwide. Contact Old Dominion for a quote at www.odfl.com or 800-235-5569.
As the global leader in the innovation and optimization of logistics and cold chain risk management systems, ShockWatch provides solutions to detect mishandling that causes product damage and spoilage during transport and storage.
www.apics.org 773-867-1777
www.bizslate.com Marc Kalman • 800-985-2510, ext. 501 mkalman@bizslate.com
BizSlate is a cloud-based solution that measurably helps your business increase revenue and profit by improving the relationships between your customers, orders and inventory.
Blue Ridge
www.blueridgeglobal.com Patrick Ford • 404-988-9286 patrick.ford@blueridgeglobal.com
GPS Insight. . . . . . . . . . . . . . . . . . . . . . . . . . 7 www.gpsinsight.com Ryan Driscoll • 480-663-9454 info@gpsinsight.com
GPS Insight works with businesses that have fleets of vehicles and other mobile assets to solve unique business challenges through increased revenue, reduced costs and decreased risk.
GT Nexus. . . . . . . . . . . . . . . . . . . . . . . . . . . 35 www.gtnexus.com Mark Mirsky • 510-808-2222 information@gtnexus.com
GT Nexus provides the cloud-based collaboration platform that leaders in nearly every sector rely on to automate hundreds of supply chain processes on a global scale, across entire trade communities.
JVKellyGroup, Inc.. . . . . . . . . . . . . . . . . . . 41 www.jvkg.com Aldo Forlini • 631-427-2888, ext. 40 aforlini@jvkg.com
LeanLogistics. . . . . . . . . . . . . . . . . . . . . . . . 9 www.leanlogistics.com 866-584-7280 • solutions@leanlogistics.com
LeanLogistics is a global solutions provider of softwareas-a-service (SaaS) transportation management system (TMS) applications and supply chain services, which are enabled by the industry’s largest transportation network.
www.llamasoft.com Manda Schweitzer-Miller • 734-418-3119 info@llamasoft.com
Logility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 www.logility.com Lee White • 800-762-5207 info@logility.com
Logistix Solutions
www.logistixsolutions.com Bob Camozzo • 703-796-0141 info@logistixsolutions.com
NeoGrid
www.neogrid.com Yvette Quintanar • 888-709-0018 info@neogrid.com
Next Level Purchasing Association . . . 11 www.nextlevelpurchasing.com 412-294-1990 info@nextlevelpurchasing.com
The Next Level Purchasing Association (NLPA) is the world’s largest professional purchasing association, and a provider of online training and certification for purchasing professionals. Its training includes the globally recognized SPSM®, SPSM2® and SPSM3™ Certifications for world-class supply management success. Its services enable organizations to lower costs, support operations, and reduce risk by improving purchasing processes and expanding the capabilities of supply management organizations.
www.odfl.com 800-235-5569 customer.service@odfl.com
One Network Enterprises, Inc.. . . . . . . . 38 www.onenetwork.com Bruce Jacquemard • 866-302-1935 inquiries@onenetwork.com
Saia, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 www.saia.com Jeannie Jump • 770-232-4069 jjump@saia.com
Saia, Inc. offers a range of less-than-truckload, non-asset truckload and logistic services through three service groups, the primary of which operates 147 terminals in 34 states, and is home to the industry-exclusive Customer Service Indicators and Xtreme Guarantee.
ShipHawk. . . . . . . . . . . . . . . . . . . . . . . . . . 44 www.shiphawk.com Caitie Schooler • 805-456-4933 caitie@shiphawk.com
ShipHawk is innovating the e-commerce sector by automating shipping and distribution processes through technology. No matter how big, how many or how diverse the items to be shipped, ShipHawk’s unique platform offers instant price comparisons, optimal delivery options, and intelligent packaging solutions that minimize costs and improve sales.
www.shockwatch.com Dong Ho • 469-371-4943 dho@shockwatch.com
Thrive Technologies Inc. www.thrivetech.com 770-222-8599 info@thrivetech.com
TRANSPOREON Group Americas. . . . . . 21 www.transporeon.com/us Deanna Ransom • 267-262-6760 information@transporeon.com
TRANSPOREON Group Americas is a global cloud networked transportation management system and e-sourcing solution provider that enables supply chain partners greater collaboration and integration. With a growing network of over 1,000 shippers, 55,000 carriers and 100,000 users worldwide, TRANSPOREON tightens the links through deeper operational visibility and integration throughout the value chain.
UPS Capital® . . . . . . . . . . . . . . . . . . . . . . . . 5 www.upscapital.com Kristin DeBates • 877-242-7930 kdebates@ups.com
UPS Capital®, a subsidiary of UPS®, provides financial, insurance and payment services to help protect companies from risk and leverage cash in their supply chains.
Numerex Corp.. . . . . . . . . . . . . . . . . . . . . . 25 www.numerex.com 877-980-6208 info@numerex.com
Numerex simplifies machine-to-machine communication (M2M), enabling the Internet of Things, so you can solve business challenges, produce new revenue streams, create operating efficiencies and improve your bottom line. Track, manage, optimize and secure any asset ... across the globe.
Global Solutions for Supply Chain ROI
Procurement (Direct, Indirect & Services)
©
Global Solutions for Supply Chain ROI
The Global Enabled Supply and Demand Chain Map
Version 30.0 (This map replaces Version 29. 0 from the March 2015 issue)
• Benchmarking & Metrics • Content Management • Contingent & Temporary Labor Services Management • Enterprise Supplier Collaboration • Employee Business Services Management [including Travel & Entertainment (T&E)] • Financial Fraud • Group Purchasing Organizations & Solutions • Hedging Strategies • Marketplaces • Negotiations & Contract Management • New Laws & Regulations
Sourcing • Auctions • Category Management • Commodity Team & Supplier Collaboration • Compliance • Content Management • Financial Fraud • Governance • Market Analytics • New Laws & Regulations • Outsourced Manufacturing/ Offshore-Nearshore-Onshore Strategies
• Product Cost Management • Purchase Order & Requisition Management • Supplier Enablement & Supplier Information Management • Supplier Performance Measurement & Monitoring • Supplier Relationship Management & Supplier Development • Supplier Risk Management • Sustainable & Green Supply Management • Value-Focused Supply Management • Network Optimization (NEW)
• Performance • Spend Analytics, Product Cost Management & Supply Strategy • Sustainable & Green Supply Management • Supplier Relationship Management • Tail Spend Management • Total Cost of Ownership/ Best Value • Trading Exchanges (Public & Private) • Total Cost Analysis
Order/Demand Capture
Supply Chain Integration & Technology Infrastructure (Lean Manufacturing, MRP, Just-in-time, Just-in-sequence Planning, Collaborative Production Management) • Automatic Identification & Data Capture (RFID & Voice) • B2B Connectivity Standards & Integration Planning • Contingency Planning • Cyber Security • Electronic Data Interchange (EDI) • Enterprise Asset Management (EAM) • Enterprise Application Integration (EAI) • Enterprise Resource Planning (ERP) • Hardware Options • Import/Export Compliance Management • Internal/External Portals
• N etwork Infrastructure Enterprise Data Management & Data Synchronization • Regulatory & Customer Mandate Compliance, Governance Issues • Security • Solutions Portfolio Management: On-premises/ Cloud-based/Software-as-a-service (SaaS)/ On-demand/Hosted Applications (ASP) • Warehouse Management Systems (WMS) • Wireless Applications & Devices • Predictive Analytics (NEW) • Real Time Freight Contract, Bid and Tender Automation (NEW)
Supply Chain Integration & Technology Infrastructure Enablers GPS Insight GT Nexus LeanLogistics LLamasoft, Inc.
Logistix Solutions NeoGrid Numerex Corp. One Network Enterprises, Inc.
ShipHawk ShockWatch Thrive Technologies Inc. TRANSPOREON Group Americas
• Benchmarking & Metrics • Capacity Planning • Demand Planning & Forecasting • Demand Sensing & Shaping • eRFI/eRFP • Merchandise Planning • Network Analysis & Optimization • New Laws & Regulations • Order & Demand Management • Outsourced Manufacturing
• • • • • • • •
Predictive Analytics Promotional Planning Quote-to-order Automation Sales & Operations Planning (S&OP)/Sales, Inventory & Operations Planning (SIOP) Supply & Demand Chain Network Design Supply Chain & Production Planning Supply Chain Coordination & Event Management Predictive Analytics (NEW)
Procurement Enablers Blue Ridge GT Nexus JVKellyGroup, Inc. LeanLogistics Logistix Solutions Next Level Purchasing Association
One Network Enterprises, Inc. Thrive Technologies Inc. TRANSPOREON Group Americas
Sourcing Enablers BizSlate Inc. GT Nexus JVKellyGroup, Inc. Logility Logistix Solutions NeoGrid
Next Level Purchasing Association One Network Enterprises, Inc. Thrive Technologies Inc. TRANSPOREON Group Americas
Order/Demand Capture Enablers BizSlate Inc. Blue Ridge GT Nexus LLamasoft, Inc. Logility Logistix Solutions
NeoGrid Numerex Corp. One Network Enterprises, Inc. Thrive Technologies Inc.
Customer Relations Product Lifecycle Management • • • • • • • • • • •
Collaborative Design Design for Supply Chain Design for Sustainability & Environment New Laws & Regulations New Product Introduction Outsourced Design Services Product Data Management Product Portfolio Management Request for Information Reverse Logistics Sustainable Packaging
Product Lifecycle Management Enablers JVKellyGroup, Inc. Logility One Network Enterprises, Inc.
• Channel Management & Customer Analytics • Contest Management • Field Service & Service Parts Logistics • Mobile Sales Solutions • Reverse Logistics & Material &/or Merchandise Returns
Fulfillment/Logistics Enablers
Fulfillment/Logistics • • • • • • • • • • • • • •
Procurement Fulfillment
Sourcing
Supply Chain Integration & Technology Infrastructure
Order/Demand Capture
nt
Logistics
g na
a
M
cy
o
c du
Education
Service Supply Chain • Service Analytics, Planning & Optimization • Service Financial Management
Payment Payment
ing
sult
Customer Relationship Management t
Pr
e Lif
• • • •
e em
Con
e cl
Service
Benchmarking & Metrics CO2 Tracking & Management Customized Build & Assemble Cyber Security Dashboards Distribution Planning & Distribution Requirements Planning Energy/Sustainability Assessment Financial Fraud Global Trade Management Inventory Management & Optimization Lean Six Sigma Logistics Resource Management Manufacturing Execution Systems Material Handling Equipment & Services Modeling Simulation Order Management Inputs (from Order/Demand Management Pie) Outsourcing Services Order & Delivery Management
• Collaborative Cash Flow Management • e-Credit • Electronic Bill Presentment & e-Invoicing • Electronic Funds Transfer & All Forms of e-Payment • e-Money • Financial Fraud
• Reverse Supply Chain & Logistics & Returns Management • Route Accounting & Management & Direct Store Delivery Solutions • Service Parts Logistics & Service Supply Chain Planning • Simultaneous Outbound & Inbound Management • Supply Chain Event Management • Supply Chain Execution • Supply Chain Security • Transportation Management & Optimization • Vendor-managed Inventory (VMI) • Voice-driven Solutions • Warehouse Control Systems • Warehouse Management Services & Systems • Workforce Management • Workforce Training • Predictive Analytics (NEW)
BizSlate Inc. Blue Ridge GPS Insight GT Nexus Logility Logistix Solutions NeoGrid Numerex Corp. Old Dominion Freight Line, Inc. One Network Enterprises, Inc. Saia, Inc. ShipHawk ShockWatch Thrive Technologies Inc. TRANSPOREON Group Americas
• Service Operations across Aftermarket Service Supply Chain Areas: Asset Management, Spare Parts, Service Enablers Field Services, Warranty, Service One Network Management, Repairs & Returns Enterprises, Inc.
• Financial Supply Chain Management • Financial Transaction Management (All Request-to-check Processes) • Freight Audit & Payment Services • Global Trade Finance • Letters of Credit • PayPal • Purchasing Cards • Spend Data Management
Payment Enablers GT Nexus LeanLogistics
Logility NeoGrid One Network Enterprises, Inc. UPS Capital®
Decision Support Circles Consulting
ship Management • Sales Force Automation • Trade Promotion Management • Warranty Chain Management
Customer Relationship Management Enablers NeoGrid One Network Enterprises, Inc.
Continuing Education Units (CEUs) • • • •
Accreditation Associations Certification Universities
Continuing Education Units Enablers Next Level Purchasing Association
Consulting Enablers Logistix Solutions Numerex Corp. One Network Enterprises, Inc. Thrive Technologies Inc.
• Benchmarking & Metrics • Business Process & Performance Management; & Revenue, Price & Profit Management Automation • Dashboards • Information Sharing & Analysis; Knowledge Management & Enterprise Business Intelligence; & Six Sigma, Quality & Lean Six Sigma • Inter-enterprise & Cross-functional Collaboration; Change Management; Staffing & Incentive Management; Supply Chain Skills Management & Education; & Professional Development • Market Intelligence/Analytics • Regulatory & Customer Mandate Compliance; Governance Issues; Supply Change Risk Management; & Supply Chain Relationship Management • Research, Advisory & Consulting • Predictive Analytics (NEW) • Market Intelligence/Analytics (NEW)
Decision Support Circles Enablers Blue Ridge GT Nexus LLamasoft, Inc. Logistix Solutions One Network Enterprises, Inc. ShipHawk Thrive Technologies Inc. UPS Capital®