Supply & Demand Chain Executive September 2016 by Supply+Demand Chain/Food Logistics

BONUS PULLOUT: GLOBAL ENABLED SUPPLY & DEMAND CHAIN MAP, VERSION 32

SEPTEMBER 2016

STORMY WEATHER AHEAD

For companies that do not secure their IoT data today

3D PRINTING MOVES IN The impact of digital supply chains on risk management

GM RIDES

THE WAVE OF RISK How the automakerâ&#x20AC;&#x2122;s increased resiliency after the 2011 tsunami helped it weather the recent earthquake in Japan

Fresh new content daily at SDCEXEC.COM

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September 2016 | Volume 17 | Issue 4

CONTENTS FEATURE

EXECUTIVE FOCUS

06 RISK MANAGEMENT

Risky Business

SPECIAL REPORTS

Congestion, cargo diversions, and competition from Canada and Mexico are among the challenges.

Getting Your Warehouse in Order

Whether retrofitting an existing warehouse or designing a new one, there are many points to consider.

OF THINGS The Brewing Data Security Storm

34 SOFTWARE & TECH

Stormy weather may be ahead for companies that do not take the time to secure IoT data now.

3D Printing Blows Up Supply Chain Risk Management

18 PROCUREMENT

Digital supply chains fulfill supply requirements for more customized products on demand and closer to the buyer.

Set Your Sights on Strategic Sourcing

Strategic sourcing moves procurement operations past simply purchasing parts to a more targeted approach.

EX OF ADV

nc . . .48, 49

erts into the ve issues o platform, ernal devices.

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, 13

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. . . 35

ERTISERS

OpenLink

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riskmethods

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m truckload (LTL) eading less-than- e. Contact vice centers nationwid235-5569. or (800) ww.odfl.com

Version 32.0

24 TRADE FINANCE

SPECIAL INSERT

The buyer-takes-all era of payables management seems to be in remission.

DEVELOPMENT Put Me In, Coach!

C-suite mentorships improve mentees’ performance and advance their careers.

COLUMNS

Global Enabled Supply and Demand Chain Map 32.0

04 EXECUTIVE MEMO 12 MADE IN AMERICA 50 WORK HARD, PLAY HARD

Exclusive online features and solutions for successful supply chain operations

The Brexit Effect on Procurement Performance

The Rise of Robotic Manufacturing and a New Wave of Workers

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42 PROFESSIONAL

upply Chain Finance S on the Blockchain

Following Page 26

SDCEXEC.COM

Users cite improved economy, scalability, ease of upgrades and enhanced competitiveness.

Embrace financial technology for faster processing, lower costs and improved service.

NEWLY UPDATED!

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Cloud Technology Brings New Efficiencies to Supply Chains

The Rise of Fintech

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38 SOFTWARE & TECH

22 TRADE FINANCE

U.S. West Coast Port Struggles

30 WAREHOUSING

14 THE INTERNET

27 T RANSPORTATION

Companies, like General Motors, have learned they can’t control when disaster strikes, but they can control how quickly they can get back to business.

Continuous Process Improvement Key to Realizing Supply Chain Potential sdcexec.com/12244659

SDCExec.com | September 2016 | SUPPLY & DEMAND CHAIN EXECUTIVE

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

THE THREE D’S:

Drones, Driverless Vehicles and Delivery Transportation technologies have arrived, but we are waiting for the regulations to catch up.

y kids used to joke that I must weigh less than 55 pounds and fly no loved my Jeep Cherokee more than 400 feet in the air at speeds of so much that, just like 100 miles per hour or less. And, they can Lorelai in Gilmore Girls, only be operated during the day. who fixed, fixed and fixed her beloved Jeep The regulations open the door for Wrangler, I would drop a new engine into greater drone use, but the FAA’s ruling my rickety old jalopy—with 280,000 miles contains clauses that essentially kill any on it—rather than buy a new vehicle. chance for drone-based delivery—at But practicality eventually won out and least for now. The FAA requires drones I committed to buying a new SUV this to remain in the sight of operators at all spring. My favorite roadrunner is now times. The restrictions on time will also pushing up daisies at the junkyard. lessen their popularity—drones cannot Logistics transportation is in a similar fly after dark. Even the size of the drones sea of change, and the time will come limits their use; there’s only so much when the industry will need to embrace a 55-pound drone can carry, let alone new technologies and retire deliver. … the FAA’s its own transportation Even with the FAA’s jalopies. clarifications in place, ruling contains Self-driving vehicles delivery by drone—at least clauses that and delivery drones are in the United States— set to change the face a pie-in-the-sky essentially kill any remains of transportation. The idea, though additional arguments in favor of chance for drone- FAA clarifications are these technologies are expected in early 2017 based delivery— that will push drone very persuasive. The industry would see less at least for now. delivery along. driver shortages and gain The day is coming efficiencies if drones took to the skies and when drones deliver by sky and driverless driverless vehicles hit the highways. vehicles by highway. But if you want those But before drones or driverless vehicles things right now, head to New Zealand become mainstream, legislative rules need where you can get your pie and eat it, too. to be in place. The technologies have Domino’s delivered its first pizza by drone arrived, but regulations need to catch up. in late August. We recently made some headway I just pray those driverless vehicles with drones. The U.S. Federal Aviation hit the road soon. I’d like to automate Administration (FAA) just clarified delivering my kids to their many activities. what is acceptable commercial usage of Now that would be a true innovation! unmanned aerial vehicles, or drones. The regulations specify that commercial drones 4

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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

www.SDCExec.com PRINT AND DIGITAL STAFF GROUP PUBLISHER Jolene Gulley ASSOCIATE PUBLISHER Judy Welp EDITORIAL DIRECTOR Lara L. Sowinski EDITOR Ronnie Garrett MANAGING EDITOR Elliot Maras ASSOCIATE EDITOR Carrie Mantey WEB EDITOR Eric Sacharski SENIOR PRODUCTION MANAGER Cindy Rusch ART DIRECTOR Kayla Brown AUDIENCE DEVELOPMENT DIRECTOR Wendy Chady AUDIENCE DEVELOPMENT MANAGER Angela Kelty ADVERTISING SALES (800) 538-5544 JOLENE GULLEY, jgulley@ACBusinessMedia.com STEPHANIE PAPP, spapp@ACBusinessMedia.com EDITORIAL ADVISORY BOARD LORA CECERE, Founder and CEO, Supply Chain Insights TIM FEEMSTER, President, Foremost Quality Logistics JOHN M. HILL, Director, St. Onge Company, and Board of Governors, Material Handling Industry of America RORY KING, Analytic and Big Data Advisor, SAS Institute KAREN MASTER, Vice President of Communications, SAP Ariba WILLIAM L. MICHELS, CEO, Aripart Consulting JULIE MURPHREE, Founding Editor, Supply & Demand Chain Executive ANDREW K. REESE, Senior Portfolio Marketing Manager, IHS, and Former Editor, Supply & Demand Chain Executive BOB RUDZKI, President, Greybeard Advisors CHRIS SAWCHUK, Global Managing Director and Procurement Advisory Practice Leader, The Hackett Group RAJ SHARMA, CEO, Censeo Consulting Group KATE VITASEK, Founder, Supply Chain Visions CIRCULATION & SUBSCRIPTIONS P.O. Box 3605, Northbrook, IL 60065-3605 (877) 201-3915, Fax: (800) 543-5055 Email: circ.sdcexec@omeda.com LIST RENTAL Elizabeth Jackson, Merit Direct LLC (847) 492-1350, ext. 18, Fax: (847) 492-0085 Email: ejackson@meritdirect.com REPRINT SERVICES JOLENE GULLEY, jgulley@ACBusinessMedia.com AC BUSINESS MEDIA INC. CHAIRMAN Anil Narang PRESIDENT AND CEO Carl Wistreich EXECUTIVE VICE PRESIDENT Kris Flitcroft CFO JoAnn Breuchel VP OF CONTENT Greg Udelhofen VP OF MARKETING Debbie George DIGITAL OPERATIONS MANAGER Nick Raether DIGITAL SALES MANAGER Monique Terrazas Published and copyrighted 2016 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 p ublisher cannot assume responsibility for the validity of claims or performances of items appearing in editorial presentations or advertisements in the publication. September 2016 / Volume 17 / Issue 4

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100% of supply chain execs think insurance is a good risk mitigation tool. Yet most think it’s not their job to buy it. Risk from weather, theft and other unexpected disruptions is a fact of life in your supply chain. Not planning for it is an even bigger risk. That’s why it’s surprising that in a survey of supply chain executives, 100% said insurance was a very effective risk mitigation tool. But most thought purchasing it wasn’t their job. At UPS Capital, mitigating supply chain risk is our job. We offer insurance solutions for freight and small parcels, regardless of mode or carrier. If you’re not sure whose job it is, call us. We’ll help you figure it out. upscapital.com | 877-263-8772

Source: The Global Supply Chain Institute, University of Tennessee; Managing Risk in the Global Supply Chain, 2014. 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. UPS Capital Insurance Agency, Inc. and its licensed affiliates are wholly owned subsidiaries of UPS Capital Corporation. Insurance coverage is not available in all jurisdictions. ©2016 United Parcel Service of America, Inc. UPS, UPS Capital, the UPS brandmark and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

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FEATURE

By Ronnie Garrett

RISKY

BUSINESS

Companies can’t control when disaster strikes, but they can control their response and get back to business.

ive years ago, when a magnitude 9.0 earthquake struck off Japan’s northeastern shore, generating gigantic tsunami waves that destroyed coastal towns and villages, there were global implications for manufacturers— especially for an automaker, General Motors (GM). The Detroit, Michigan-based manufacturer of Buick, Cadillac, GMC and Chevrolet vehicles learned the hard way that its business continuity plans were too tactical. Todd Scott, executive director of global supply chain at GM, explains the company has vehicle architectures that are designed under specific platforms, then produced globally. “As a result of this global architecture, we shared supply from the Tier 1 level down,” he says. “But, we didn’t understand our sub-tiered supply base well in 2011. We didn’t know the locations of all of our suppliers and we didn’t know which suppliers supplied our Tier 1s.”

The regional supply chain heads for the company’s different divisions across the globe also didn’t know each other well. “That added an extra layer of complexity,” he says. It’s no surprise then that GM was still actively locating suppliers within the affected area six weeks after the tsunami. Fast forward to April 2016, when Japan was hit with a 7.0 magnitude earthquake. The changes GM made helped the manufacturer recover quickly. It took GM just six hours to locate and contact affected tiered suppliers. So, despite the fact that 70 of GM’s suppliers suffered negative impacts in the earthquake, the company responded quickly and reported record profits in the second quarter. “We are a much more globally connected organization today,” Scott says. “When the tsunami hit, we had to dispatch one of our most senior executive vice presidents from North America to discuss tactical issues, such as ‘Can we borrow those parts from you? We’ll loan you these parts in return and we promise to pay you back. Here is the arrangement in writing.’ With the recent quake, we had that worked out within days.” Scott says the heads of affected divisions were able to quickly understand each other’s needs and respond after the quake. “We had parts produced in Mexico going to China; we stopped that pipeline right away so we could survive in North America,” he says. “We stopped the pipeline of parts from China so they could keep going. All that was worked out at a working level.”

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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As GM discovered, disruptions in the supply chain are a fact of life. But when companies are prepared for risk, they can mitigate the unexpected fairly quickly and get back to business as usual.

IDENTIFY YOUR RISK “Disruptions happen—all the time and all over your supply chain,” says Hank Canitz, director of product marketing at Logility, a producer of supply chain management solutions. “But the top risks to your supply chain will vary, depending on your industry and where you operate.” A Council of Supply Chain Management Professionals study identifies four areas of potential disruption. The list includes technology disruptions, from things like artificial intelligence, 3D printing and Big Data; macroeconomic trends, such as globalization and urbanization; increasing customer requirements and demands; and operational constraints, including free trade agreements, and environmental and safety regulations. But Bill Hurles, executive director of the Global Supply Chain Resiliency Council, brings a slightly different perspective. He recently retired from GM as the executive director of supply

chain; he led the global operations of 159 plants, as well as GM’s Global Supply Chain Leadership Team. This executive, who weathered the tsunami with GM, puts natural disasters at the top of his list. He then adds geopolitical risk. The third risk he identifies is sub-tier supplier risks. “Something could happen regionally that might affect a sub-tier supplier. If you don’t know whom your Tier 1 or Tier 2 suppliers are, you can really be blindsided,” agrees Bindiya Vakil, CEO at Resilinc, a provider of resilience and risk management solutions. Companies need to think outside the risk mitigation box, adds Doug Thomas, professor of supply chain management at Penn State’s Smeal College of

“DISRUPTIONS HAPPEN —ALL THE TIME AND ALL OVER YOUR SUPPLY CHAIN.” HANK CANITZ, LOGILITY

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SDCExec.com | September 2016 | SUPPLY & DEMAND CHAIN EXECUTIVE

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FEATURE Global Supply Chain Resiliency Council Awards The Global Supply Chain Resiliency Council awards supply chain resiliency at its annual Global Supply Chain Resiliency Council and Awards event. The awards program recognizes organizations and individuals that serve as role models and leaders in driving supply chain resiliency strategy success within their company, supply chain community and across industries. In 2014 and 2015, resiliency programs receiving recognition included companies like Amgen, Palo Alto Networks, Bose, Western Digital, etc. The awards are handed out in the spring, but companies are encouraged to share their resiliency success stories now. The council will begin accepting nominations in September for the 2017 awards. To learn more about this prestigious award, visit: www.resilinc.com/resources/events-awards/. Any member of the Global Supply Chain Resiliency Council LinkedIn group is eligible to nominate a company (www. linkedin.com/groups/3725519), educational organization, individual or team for consideration, at the following link: www.surveymonkey.com/r/Z8596Q6. Business. “Fluctuating oil prices might not be a headline-grabbing risk, but companies need to be thinking about designing their networks in environments where they can adapt to oil prices or things like the Britain/European Union referendum,” he says. “Big swings in foreign exchange or oil prices can change what your ideal network looks like.”

BLOCKING AND TACKLING Companies can put blocking and tackling measures in place to improve risk management and resiliency. For example, many companies rely on redundancies. “They build an extra plant, stockpile inventory or have extra suppliers,” he says. “But in today’s competitive world, where you’re not only competing against the competitor next door, but the ones across the globe, these redundancy-type methods are too expensive and are not competitive.” Other companies look to standardizing processes to make their supply chains more flexible. This requires firms to involve the supply chain in other business processes, like product development, 8

marketing and sales. “But there are still a lot of companies struggling with this,” Canitz says. “The ability to move production among plants requires compatible processes, machines and personnel, and that is not all that common.” The last tactic companies use, and one that Canitz calls critical to risk mitigation, is developing a company culture that empowers employees to make decisions and fix problems. “This is a method that companies fall down on more than anything else,” he says. “It’s great to be able to run your processes when things are going great, but when things happen unexpectedly, how quickly can you respond? If you have to go to your CEO to make a decision, you’re not going to be able to respond very quickly.” This is one area GM addressed when cracks in its resiliency armor surfaced. The company now has a common data file shared among all global partners. It also set up video conferencing rooms companywide, put Skype on everyone’s laptops and added 4G LTE to vehicles to improve global communication. “Leaders are now globally connected and talk once a week,” says Scott. The openness of communication among GM’s supply chain leaders helped the company respond quickly after the recent earthquake. The quake happened April 16, and by April 21, Scott presented response plans to the executive team. “That’s a pretty quick response when you’re talking about a network the size of ours,” he says. “Because we had relationships built and a level of trust, we were able to address the situation quickly. We were even a little bit ahead of our senior leadership team.” Changes to the culture, like those at GM, cannot come from the middle, adds Canitz. “Cultural change has to originate with C-level executives and they all have to be marching in the same direction.”

BUILD A GOOD OFFENSE “Most companies only respond to disruptions,” laments Canitz. “They play defense to minimize the impact; there isn’t a lot of offense going on to plan for or prevent disruptions in the first place.” Offensive play is the best way to get your arms around risk mitigation. And, according to Scott, improving a company’s risk mitigation strategy begins with data, which needs to be dynamic and constantly updated. “Data forms the entire basis for having a quick-reacting and strategic risk management process,” he says.

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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FEATURE But Canitz says companies need to learn to walk before they can run. “You need to have basic demand, supply and inventory planning to provide the foundation of rich data,” he says. “Then you need to find a solution that allows you to pull information from various systems. A tool like Logility’s helps companies pull this data together, collate it, prioritize it, analyze it, run what-if scenarios, and determine optimal strategic and tactical plans going forward.” Data management and analysis solutions, such as those from Resilinc, can help companies prioritize their response, adds Vakil. “We often see situations where a single-sourced, custom/semi-custom part, which costs $100,000 a year, is used on a product that generates $500 million in revenue a year. This impact assessment can be used to prioritize budget and resources on mitigation activities across all parts.

“MOST COMPANIES ONLY RESPOND TO DISRUPTIONS. THEY PLAY DEFENSE TO MINIMIZE THE IMPACT; THERE ISN’T A LOT OF OFFENSE GOING ON ...” HANK CANITZ, LOGILITY

A company with 5,000 parts under management with suppliers can quickly identify the 10 parts that have high financial risks and high revenue impact. They can also quickly pinpoint the 15 parts coming from risky locations where disruptions happen quite frequently, resulting in high location risk. Worse, suppliers in these areas may also report long recovery times, possibly 40 weeks or more, which further compounds the impact of a major disruption. “You cannot afford this,” Vakil continues, “because if this $100,000 part goes down, your revenue impact is $500 million or more. Big Data analytics can help companies prioritize the biggest problems and 10

prescribe which risks to address first.” Canitz cites the avian flu as a key example of a proactive response using resiliency planning tools. While companies could not predict that they would lose 60 to 70 percent of their egg supply, they could use technology to help them determine how to keep operating. “Our client ran hundreds of scenarios before it came up with an optimal plan that would allow it to meet customer demand,” he says.

KNOW THE LINKS IN YOUR SUPPLY CHAIN None of this is possible, however, if companies do not know their supply chains in the first place. “It sounds trite and oversimplified, but companies need to be able to trace down two to three tiers in their supply chain, and know where things are coming from,” Thomas says. “Some natural disasters hit companies very hard, because the supplier to their main supplier happened to be located in an area that was hit, and the company didn’t know their risk.” Joey Alonso, president of Quortum, a Virginia firm that provides risk management services, agrees. “When you think about supply chain, you’re talking about partnerships. And, as with every partnership, you need to know whom you are partnering with.” Once companies know where their suppliers are, they can perform predictive analysis and look at what-if scenarios. What if this key supplier is out for two months? What will the impact be? Knowing this, companies can put a plan in place. “Maybe they give a new supplier 10 percent of their total orders so that if a Tier 1 supplier goes down, this supplier can come up,” he says. When suppliers are known and become key partners to the business, a proactive approach also can be employed to help improve their operations. Canitz has experience working with partners to build Lean Six Sigma capabilities at their facilities. “But,” he says, “you must have visibility into your Tier 1 and Tier 2 suppliers, and the means to collaborate.” GM has the ability to dispatch tactical operations professionals to their suppliers in times of crisis. Besides helping the company get a boots-on-theground take on the issue, it also enables the company to step in and help. “It lets us know how they have been impacted and what we can do to help,” Scott says. “We’ve had cases where we have provided generators to companies or even arranged to have drinking water brought in.”

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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hat if you could live in a world free of traffic jams and searching for parking? You can with the URB-E 12

from URBAN626. Peter Lee, CEO of URBAN626, conceptualizes the URB-E as an efficient problem-solver for the last mile within cities or what he calls the micro mile. While public

transportation and other options—like Zipcar and Uber—partially solve the last-mile issue, they leave a lot to be desired when you do not have access to them or their timing is not up to par— for instance, when your meeting starts in 10 minutes across a gridlocked city. The URB-E, in contrast, can zip right through traffic, offering more freedom of mobility to the time-strapped consumer. The URB-E falls into the electric vehicle market, but is in a class all its own. It boasts a compact, foldable design; a 20-mile range; speeds of up to 15 mph; the ability to charge in four hours; and a weight of about 35 pounds, so you can fold it up and carry it on the bus, in the cab, on the train or even use it to cart your groceries through the supermarket. URB-E acts a security blanket, solving the micro-mile trap by filling the gap in transportation options. Like all transformative transportation inventions—the automobile and the airplane—the URB-E is a quintessentially American product. It was not only designed and produced in the United States, but it was also invented, patented and sourced here. It’s not a bike. And it’s not a scooter. There are no pedals, nor floorboards. Users simply control the throttle with their hand, similar to a motorcycle, and the URB-E cruises around with steering that simulates that of a bicycle. Its invention was kind of a fluke. Companies were soliciting the students of Grant Delgatty, a product designer and instructor at the ArtCenter College of Design in Pasadena, California, to try to solve the last-mile obstacle. When Lee had an epiphany about what a pain point the last mile can be for city-dwellers and students, he started to develop his own ideas. From there, he teamed up with Porsche lead engineer Sven Etzelsberger to set

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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With a weight of about 35 pounds, the URB-E can be folded up and carried on the bus or in the cab, or even used to transport your groceries.

fabricators who have, for 20 to 30 years, produced parts for Boeing, Airbus and SpaceX.” Pasadena is also a natural “Everything needs to be environment for a startup because the California Institute focused on communicating of Technology (Caltech) and and innovating and executing.” the ArtCenter call Pasadena home. The combination forms — PETER LEE, URBAN626 a hotbed for a startup to recruit the cornerstone of what was to become talent to innovate new products. URBAN626.

WHY MADE IN THE USA?

WHY PASADENA?

Being able to collaborate with suppliers and partners that are experts in their fields is the main reason URBAN626 decided to source and produce the URB-E in the United States. Of the company’s suppliers, Lee says, “We don’t just ask somebody to make a widget. We ask them to make a widget, and they come back to us and say you can make this widget better. They’re not just spitting product back to us. They contribute to the process by sharing their manufacturing expertise.” Besides, An optimized according to Lee, there are supply chain three concessions doesn’t just you must make happen. to manufacture in China: good It is planned. communication, quality control and transparency. Worldwide Headquarters: 800.762.5207 “For URB-E and EMEA Headquarters: +44 (0) 121 629 7866 the company we’re

Most URBAN626 employees—and even the founders—live in or near Pasadena. Lee thinks it was beneficial to locate the business close to home: “When you’re focused on building and inventing something, and establishing a movement that simply did not exist before, you can’t waste time going back and forth. Everything needs to be focused on communicating and innovating and executing.” Initially, the URB-E prototype was launched as an Indiegogo campaign, which garnered positive feedback. But as Lee puts it, “Like many Indiegogo campaigns, it’s one thing to have a prototype; it’s another to have a product that goes to market and is able to withstand the pressures of the consumer mass market. You see a lot of product that comes from a good prototype, but [many companies] are not able to go to market because they can’t produce.” URBAN626 overstepped the production obstacle early on by establishing a made-in-the-USA supply chain, which boosted the company’s agility, and therefore, speed to market. Lee says, “We identified California as having a very robust manufacturing heritage that is borne out of the aerospace industry, so we tapped into that. We now have a robust supply chain and some of the best

DRIVING

VISIBILITY IN A WORLD OF COMPLEXITY

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establishing, those are concessions that we just couldn’t take a chance on. We also focus on innovating and designing quickly, and having a two-week delay, and sending things over to China and getting feedback, that is time wasted.” By establishing a U.S.-based supply chain and leveraging its network of experts, URBAN626 thought it could make up any loss that it may incur by choosing to use more expensive labor by increasing its speed to market, innovation and quality. Lee concludes, “We’re not using made-in-the-USA as an advertising component or strategy. We use made-in-the-USA because it’s the only way to make the URB-E.” For more information, please visit www.urb-e.com.

www.logility.com

SDCExec.com | September 2016 | SUPPLY & DEMAND CHAIN EXECUTIVE

9/2/16 9:56 AM

SPECIAL REPORT THE INTERNET OF THINGS

By Ronnie Garrett

THE BREWING DATA

SECURITY STORM

Stormy weather may be ahead for companies that do not take the time to secure their IoT data now.

n 2015, a lawsuit was filed in federal court against Lenovo (formerly IBM) and Superfish, charging that the companies violated wiretap laws and trespassed on personal property. Around the same time, a class action investigation was also launched against Lenovo. The Chinese PC manufacturer found itself in hot water for including a software program called Superfish Visual Discovery on its computers. This adware tracks users’ browsing activities to place additional ads on the sites consumers visit. Blogger Jessica Bennet filed the individual lawsuit charging that the software tracked her Internet use, invaded her privacy and damaged her computer. The class action investigation, meanwhile, alleges that the adware “exposes computer users to serious security vulnerabilities” that could result in the theft of users’ logins, passwords and sensitive data, as well as degrade their Internet experience. 14

“Lenovo is a Chinese company, meaning it is essentially owned by the Chinese government, which is the biggest threat to us, by the way, for counterfeiting and economic espionage,” says Joey Alonso, president of Quortum, a provider of insider threat and risk management services. “The adware installed on their computers sent user data back to China, so that the company would know how customers were using their computers. Essentially, this information was going directly back to the Chinese government.” Though this example pertains to adware rather than the Internet of Things (IoT) per se, it demonstrates what is possible once the IoT is in play in products and within companies. The IoT collects data, and simplifies the transfer of this data, putting customers and companies at risk for cyber theft. “With the IoT, you’re going to have many more things connected to your corporate and internal networks,” states Alonso. “When you talk about the

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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SPECIAL REPORT THE INTERNET OF THINGS

A STORM IS BREWING

IoT, you’re talking about very publicly accessible items that people in the know could use maliciously. We can secure the laptop and copier down the hall, but with the IoT, you’re taking things to a whole new level where those with malicious intent have access to your company, client and employee data.” According to John Dickson, principal of Denim Group, a computer security firm, the concerns are multifaceted within the supply chain. “For government buyers, the concern involves sophisticated nation state-sponsored supply chain tampering that enables traditional adversaries of our country to inject hardware or software that allows them to conduct intelligence-gathering, or to gain unauthorized access to a U.S. government network. For personal users, concerns involve the snooping of personal information—think spyware/ adware on a massive scale—that could

The IoT is magnifying long-standing privacy issues, maintains Dickson, who explains that, until now, privacy issues were isolated to devices used for computing and communication purposes, such as smartphones, laptops and tablets. “The IoT brings a full range of devices into the household that are designed to track information that exposes a spectrum of behaviors and habits, all quietly and without the knowledge of users. Couple that with the fact that manufacturers of many consumer devices are not on the bleeding edge of security and privacy, and that many of the devices [or their components] are manufactured in countries like China where privacy protections are nonexistent, and you have a perfect storm brewing.” This storm will continue to build due to what Dickson refers to as “market failures” arising from the fact that the market lacks incentives addressing privacy and security among companies using IoT devices in their consumer products. “When manufacturers build IoT devices [or purchase them from another supplier], there is not a planning consideration that generates features involving privacy controls. The impact is that these features are rarely implemented and I think we’ll eventually have a high-profile IoT breach,” he says. Issues of liability and brand protection will eventually drive companies to protect themselves from such risks. “However, we are at a very early stage. There is no Underwriters Laboratories for the IoT at this point,” he says.

“THE RAPID PROLIFERATION OF IOT DEVICES CREATES ADDITIONAL SECURITY ISSUES THAT MAY OPEN A BUSINESS TO VULNERABILITIES THAT WERE PREVIOUSLY NOT A RISK.” — SAM KASSOUMEH, SECURITYSCORECARD put their Internet surfing habits in the public domain or make it possible to steal their personal information.” Access to a company’s proprietary data is also a concern. “The rapid proliferation of IoT devices creates additional security issues that may open a business to vulnerabilities that were previously not a risk,” says Sam Kassoumeh, co-founder of SecurityScorecard, a security rating and benchmarking platform.

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perceptions of privacy by the

numbers Consumers having low trust or no trust in companies securing their data and protecting their privacy

45%

Highly concerned with companies selling their data

78%

87% Of consumers do not know what the Internet of Things is

70%

Of consumers own a connected device other than a phone, tablet or laptop Consumers reporting it’s important or extremely important that they be notified when data is being gathered to provide real-time services

56%

“Customer Perceptions of Privacy,” Altimeter Group

SDCExec.com | September 2016 | SUPPLY & DEMAND CHAIN EXECUTIVE

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SPECIAL REPORT THE INTERNET OF THINGS

“THERE WILL BE HIGH-PROFILE PRIVACY BREACHES THAT SPUR PUBLIC OUTRAGE AND CHANGE THE COURSE OF IOT DEVELOPMENT.” — JOHN DICKSON, DENIM GROUP

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Dickson likens IoT privacy security to what Internet security was in 1993. He believes the immediate future for the IoT and privacy will be rocky, and predicts “there will be high-profile privacy breaches that spur public outrage and change the course of IoT development.”

THE FRONT LINES The good news, says Neil Hampshire, CIO of ModusLink Global Solutions Inc., a provider of supply chain management services, is that companies are increasingly seeing the importance of security in connected devices and are thinking of it in a more strategic way. Some companies using the IoT in finished products are employing user license agreements (ULAs) to protect themselves from liability. However,

Stacy Cannady, head of technical marketing—Trustworthy Computing TRIAD (threat response, intelligence and development) for Cisco Systems Inc., a company that designs and sells networking equipment worldwide, warns ULAs can be a slippery slope. “When is the last time you read a ULA before clicking accept and moving forward?” he asks. “If I’m evil and I want your information, all I need to do is construct a ULA that’s a minimum of five pages in seven-point type and has a clause in it that says I can take whatever information I want. Then, once I capture the information, it’s fine to do what I want with it.” That might mean selling the information to the highest bidder. “But that could come back to bite me if consumers start getting flooded with offers and people start asking why is it

9/2/16 11:04 AM

SPECIAL REPORT THE INTERNET OF THINGS that everyone who buys this product gets buried by requests for uninvited solicitations,” explains Cannady. The more likely risk pertains to collecting consumer information as made possible in the ULA, then keeping it unprotected and having that information compromised by an outsider. “That certainly can happen and there will be no consequences because the company owns this data,” he says. Cannady advises companies to carefully consider the information they keep about customers. The default guidance from the C-suite often is to keep everything. But Cannady calls that mentality “a disastrous notion in a world where it’s certain an enterprise will be hacked.” He adds, “The best thing they can do about privacy [of the information

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collected by the IoT] is to think very carefully about what information they absolutely need to have and destroy any additional information.” Hampshire also recommends taking a close look at IoT suppliers. Ask what protocol and security they employ to secure communications between the device and the enterprise. Do they have extra 509-type security for the device’s communication protocols and host environment? How are they collecting information and making sure the information collected is not being intercepted? “Don’t be satisfied with a supplier stating ‘We use the latest technology standards,’ ” he adds. Securing the IoT in consumer products should be addressed like any other supply chain sourcing challenge, Hampshire stresses. “You need to apply the best practices in supply chain

sourcing. Companies need to know how to ask the right questions to build a trusted supplier.” Initially, from a supply chain perspective, Dickson predicts corporate buyers will enforce security and privacy via contracts with manufacturers. “There will be private contracts between manufacturers and suppliers that we will never see,” he says. Protecting the IoT might be in its infancy, but Hampshire stresses companies need to think about security in the very early stages of deploying and using this technology. “If not, there will be vulnerabilities,” he says. “Executives need to think about how they engineer the IoT from the very beginning, in their companies and in their products.”

9/2/16 11:04 AM

SPECIAL REPORT PROCUREMENT

By Ronnie Garrett

Set Your Sights on

STRATEGIC SOURCING

or years, procurement organizations set their sights on cost reduction. They found their mark—and their value—in unearthing ways to reduce expenses related to direct and indirect purchases of goods and services. But procurement organizations are increasingly eying a new picture that takes a broader view of their procurement targets. More and more, they are zeroing in on a practice called strategic sourcing, which Mukund Acharya, vice president of GEP, a procurement and supply chain consultancy, says is simply a “dataand fact-driven exercise that looks to maximize not just the savings options, but also the total cost of ownership.” Bill Huber, managing director of Alsbridge Inc., a global sourcing consultancy, defines strategic sourcing in more depth, stating: “Strategic sourcing is the effective acquisition of third-party capabilities and supplies in a manner that will provide a material competitive advantage to the firm.” Strategic sourcing and procurement organizations are aiming at a new way of doing business. “There has been a change in the management style within procurement,” says Steven Lutzer, founder of Lutzer Global Inc., a retained search firm specializing in strategic sourcing and supply chain. 18

“Old-school procurement was solely focused on vendor negotiations. But if procurement leaders want to succeed in strategic sourcing and reducing spend, they have to adopt new tools that include spend analytics, quantitative decision-making and more strategic relationships with vendors.” This includes knowing the categories of spend within the organization, Lutzer stresses, then clustering and coding that spend to get the biggest bang for the company’s buck. On the direct materials side, it may be purchases for anything from resins to glass to electronic components. On the

Strategic sourcing moves procurement operations past simply purchasing parts to a more targeted approach.

vendors in a more effective way.” The process involves understanding what the needs are and the clusters of spend, developing a spend profile, assessing the “If you create categories of spend supplier base, then finding synergies across the entire organization, and opportunities, according to Sundar you’re able to cluster the spend Kamakshisundaram, vice president of procurement and negotiate with vendors in and business network a more effective way.” solutions at SAP Ariba, an information technology company. “You try to STEVEN LUTZER, LUTZER GLOBAL INC. find opportunities before executing indirect side, it may be anything from the sourcing process. That is why it’s information technology to business strategic,” he says. “It puts together a services. “One vendor may be selling commodity strategy, so you can develop to six different divisions within your an optimal contract with a supplier.” company,” he says. “But if you create meaningful categories of spend across AIM FOR SOURCING STRATEGY the entire organization, you’re able to Though strategic sourcing is right cluster the spend and negotiate with on target, not every procurement

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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SPECIAL REPORT PROCUREMENT

Ways CPOS Plan to Generate Value Next Year

43% 39%

Working to consolidate spend

Increasing the level of supplier collaboration

31%

Helping to restructure existing relationships

organization gives it a shot. Huber reports that one of the largest barriers to strategic sourcing is a misalignment between how the procurement function measures cost savings, and how the business measures profit and loss. “Traditional procurement cost savings are based on a comparative year-over-year or transaction-over-transaction analysis focused on total cost reduction,” he says. “Very few procurement organizations add the value of capability differentiation to their financial calculations, so the primary key performance indicator (KPI) for most procurement organizations is related to its impact against static requirements.” Furthermore, Huber maintains that “innovation in products or services that improves the business’ speed to market, ability to service customers or

attractiveness of its own products tends to be recognized only anecdotally, and not as a quantitative financial measure of procurement performance.” The issue then becomes that, “unless innovation is related specifically to reducing the cost of the product being purchased, that innovation is going to be undervalued by most procurement analytical models, and by the KPIs by which the strategic sourcing organization will be measured.” The second barrier is related to capacity, speed and prioritization, adds Huber. “Most sourcing organizations are under-resourced for their aspirations. They aspire to deliver significant value on every engagement, but doing that takes a lot of time and effort, and the best strategic sourcing people are often engaged in multiple projects simultaneously,” he says. He recommends procurement

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30%

Reducing total lifecycle ownership costs

29% 25% 21%

Improving specifications

Restructuring the supply base

Reducing transaction costs Source: The Deloitte Global CPO Survey 2016

operations clear this hurdle by being selective in the projects they take on, then hitting them out of the park. “This can be difficult, especially in regulated industries where the mandate to manage all spend is a requirement of doing business,” he says. “Smart

SDCExec.com | September 2016 | SUPPLY & DEMAND CHAIN EXECUTIVE

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SPECIAL REPORT PROCUREMENT CPOs are developing creative ways to maintain an appropriately managed spend environment.”

KNOW WHAT YOU DON’T KNOW

dominant in their sector, and tailor their sourcing to these goals. “For example, if the company’s strategy is geographic expansion, then sourcing capabilities and priorities need to align with geographic expansion. The point is to define the things that will be most valuable to the company’s success in the next few years and prioritize being able to enhance those things through strategic sourcing,’” Huber says. Essentially, Acharya says strategic sourcing takes a broader view of the procurement process. Yes, a company may need a specific component, but before purchasing it from a given supplier, the procurement organization should also be looking at the quality of service the supplier provides, the viability of the supplier, and the total cost in don’t

“Companies don’t know what they don’t know,” says Acharya. To accomplish strategic sourcing, companies need to fully understand the definition of the spend category, usage patterns, suppliers used, stakeholders involved, total expenditures and volumes. Unfortunately, most spending occurs somewhere on the back of the system, says Kamakshisundaram, who explains it might be on an enterprise resource planning (ERP) system, an operational system, a travel and expense database, labor tracking software or a “Companies spreadsheet. know what they Firms such as GEP, SAP don’t know.” Ariba and GT Nexus, a supplier MUKUND ACHARYA, GEP of a cloud-based supply chain management platform, offer technology that aids companies in capturing spend data, which is often fragmented across a company’s terms of how the disparate data systems. Business supplier is working with the company to intelligence tools can extract data from improve quality and keep costs down. ERP systems, data warehouses, accounts “Big Data is behind strategic payable software and spreadsheets, and sourcing,” adds Guy Courtin, vice summarize it in meaningful ways. president of industry and solution Once data is housed in one place, a strategy for GT Nexus. “The amount company can set its strategic sourcing of information available helps us scope. Procurement needs to determine better understand our suppliers, and it if it wants to engage in an enterprisecarries all the way through the value wide initiative, or only use strategic chain. We can trace country of origin, sourcing to manage one or two company viability and service track categories of spend. “Determine which records. spend categories you’re going after and “All of this information can be then create sourcing initiatives on these leveraged to get better agreements categories,” Lutzer advises. with suppliers,” he adds. For example, It’s essential that procurement procurement may be able to ask a organizations understand the supplier for a better price or level of fundamental business problems service based on the data analytics. the company needs to solve to be 20

DON’T FORGET THE PEOPLE Technology may help the situation, but it doesn’t solve the problem. “Technology is only as good as the people who are using it,” says Courtin. “You have to get employees to buy in to the change.” Change management isn’t as easy as one thinks. “Though procurement can easily create these strategic sourcing agreements, it usually cannot mandate that different divisions use them,” he says. Stakeholders may be used to working with one particular supplier, thus changing to another supplier— even if it is cheaper or better—requires change management. “There will always be tension with stakeholders saying, ‘We are different, we are unique, I can’t risk service to get something cheaper,’” says Acharya. “You have to understand their key drivers and make sure you have a clear message for them.” Procurement operations need to fully understand their stakeholders’ spend categories. For example, if the category is marketing spend, they need to know the nuances of buying through an agency, print versus digital media and more. “The best way to become a trusted adviser is to understand the spend category you are trying to track, then send in someone who knows that category well to do the negotiating,” Lutzer says. He recommends creating a stakeholder committee before procurement reaches out to suppliers or develops a request for proposal (RFP). This committee may meet monthly or quarterly, and it should involve senior leadership. “Ask them what vendors they might consider, set up criteria to qualify vendors and make them part of the team for these sourcing initiatives,” he says. “When procurement fails to get stakeholders involved, it’s not likely to have buy-in later on.”

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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“Technology is only as good as the people who are using it. You have to get employees Companies can to buy in to the change.”

establish KPIs that track their successes when it comes to strategic sourcing. Huber recommends that these “KPIs focus on the value-add to the company’s businesses, with traditional measures of realized cost savings, compliance and spend under management balanced by Net Promoter Scores (NPS) for satisfaction, and financially sophisticated models reflecting net present value (NPV) contributions to strategic/transformational projects,

— GUY COURTIN, GT NEXUS

KEEP AN EYE ON KPIS Courtin recommends asking the following once a strategic sourcing program is in place: “What is the measure of success? What is the measure of improvement? How do we monitor this moving forward?”

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SPECIAL REPORT PROCUREMENT and upstream/downstream efficiencies resulting from procurement’s contribution. Other KPIs should track cycle time, end-user enablement, use of social media, level of automation, etc.” Lutzer recommends companies regularly review how much of their spend is going through strategic sourcing agreements. “If you spend $100 million on a specific spend category, how much of it is spent using your sourcing agreement?” he asks. “Are you at 80 percent or 30 percent compliance? What can you do to increase compliance?” Putting strategic sourcing in the procurement organization’s crosshairs can help companies create synergies and develop opportunities that save them money, spur innovation, build greater efficiencies and meet targeted goals.

SDCExec.com | September 2016 | SUPPLY & DEMAND CHAIN EXECUTIVE

9/2/16 8:54 AM

SPECIAL REPORT TRADE FINANCE

By Wendy Glavin

The Rise of

FINTECH Embrace financial technology for faster processing, lower costs, and improved service and satisfaction.

inancial technology, or fintech, is the No. 1 threat to banks and industries in the business-to-business (B2B) sector. Indeed, the B2B sector appears ripe for disruption as it lags in adopting the emergent customercentric culture. A recent Gallup Poll found that only 29 percent of B2B customers are engaged, with the remaining 71 percent indifferent or actively disengaged. Optimized and digitized technology, online and mobile apps, speed, metrics and personalization are what customers are demanding, and financial institutions are noticing. Financial institutions are operating in a new environment, dealing with an onslaught of new regulations. However, adding silos, outdated legacy systems and inefficiencies are not the answer. With next-generation technology, automation, real-time transparency, analytics and speed, banks have new tools to improve compliance, processes, security and customer service. JPMorgan Chase recently partnered with OnDeck Capital, an online small business lender, to deliver capital to small businesses in as little as 24 hours as opposed to weeks. Instead of being 22

viewed as competition or a disruptor, banks are creating new strategies to collaborate with fintech firms. David Sica, a principal at Nyca Partners, told American Banker that the increased involvement from corporate investors speaks to the fintech evolution: “Two years ago, the dialog was about bank replacements ... Now the market is interested in newer types of products [and how to] partner with banks to deliver that. Banks are paying attention, allocating to make venture investments with the intent of partnering and building products with these new companies.” The rising interest in fintech creates new opportunities for supply chain finance, too. In McKinsey & Company’s “Supply Chain Finance: The Emergence of a New Competitive Landscape” Ganaka Herath wrote: “Supply chain finance (SCF) receives surprisingly little senior management attention for a market that presents such large and growing opportunities. Traditionally dominated by banks, the market has more recently been entered by fintechs: specialist financial technology companies that provide platforms and software-based services to support SCF operations. These

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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challengers are changing how buyers and suppliers think about the market, disrupting incumbent financial systems and providers, and starting to command a sizable proportion of value pools. Success in this new environment will depend on understanding what banks and fintechs are offering, working out what customers value and quickly planning an appropriate response.” Fintechs control an estimated 10 to 15 percent of the SCF market, adds Herath. They create more efficient financial supply chains because buyers, suppliers and funders are integrated for full transparency. New cloud-based software platforms are integrated into existing infrastructure so that buyers reduce accounts payable invoice processing typically by 60 percent, and improve their working capital and choose when they want to be paid, from several days to less than 30. Suppliers, meanwhile, can be paid in advance and track invoices through a transparent payment process. Suppliers provide buyers with a discounted invoice, at the buyer’s lower cost of capital. Lastly, funders achieve low risk, high return investments and provide capital to underserved markets. This is only the beginning for fintech. ABOUT THE AUTHOR WENDY GLAVIN is an expert in marketing communications, public relations, and social and digital services. During her 20-year career, she has consulted for software companies, a publishing firm, and small businesses and startups. For more information, visit www.wendyglavin.com.

8/31/16 1:56 PM

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SPECIAL REPORT TRADE FINANCE

By Sanjay Saigal

SUPPLY CHAIN FINANCE ON THE BLOCKCHAIN ENABLES NETWORK COLLABORATION

hat do Diageo, Tesco, Woolworths and Carrefour have in common? Beverage giant Diageo recently decreed that it would require 90 days to pay its suppliers. Accusations of shakedowns and bullying related to similar attempts to improve cash flow at the expense of their suppliers were also leveled at Tesco, Woolworths and Carrefour. Facing public pushback, Diageo agreed to climb down to 60-day payments. Tesco changed its supplier management practices. The Woolworths and Carrefour cases are ongoing. Large buyers have long wielded the big stick over (usually smaller)

suppliers. This buyer-takes-all era of payables management, if not at an end, seems to be in remission. However, the acute pressure on every supply chain actor to optimize working capital, which led to the imbalance, remains. Apex stakeholders lead many supply chain innovations for optimizing the flow of product. Optimizing the flow of money across the supply chain is more challenging. Trade payables make up 20 percent of corporate liabilities, thus the prevalence of inequitable solutions like the ones described above. The post-recession slowdown in lending and recent retrenchment of multinational banks are pushing cashconstrained suppliers closer to factors

Large buyers have long wielded the big stick over (usually smaller) suppliers. This buyer-takesall era of payables management, if not at an end, seems to be in remission.

and other similarly expensive financiers. Small and medium enterprise (SME) suppliers often require capital injection from their better-established apex buyers. All of that increases the cost of goods for apex buyers, reinforcing a propensity to pressure suppliers. Though we’re experiencing a time of flat demand, the pressure on costs isn’t gone. Indeed, it’s more acute. Yet, it is no longer practical to simply pressure Tier 1 suppliers and expect them to pass on the big squeeze. Cost reductions have to come from across the supply chain, from each according to ability, so to speak. In that effort, supplier finance can go from being the heavy to being an enabler of a new, intrinsically collaborative form of supply chain management.

COLLABORATION In mainstream supply chain management, collaboration typically refers to activities geared toward improving efficiency through the sharing of demand patterns and synchronizing other business activities. However, if the motivations of interacting firms aren’t aligned, collaboration can actually exacerbate

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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SPECIAL REPORT TRADE FINANCE

disruption. Unless care is taken to align and monitor incentives, collaborative activity—in design, planning, marketing or inventory management— may yield small or negative benefits. Western initiatives, such as vendor-managed inventory (VMI), collaborative forecasting, planning and replenishment (CPFR), and continuous replenishment, score benefits for apex buyers like Wal-Mart and lead suppliers such as Procter & Gamble. Note that such collaborations are almost always monogamous: between one buyer and supplier. Asian collaboration models, such as the Japanese keiretsu, are multilateral. Leveraging a network of time-tested relationships with strategic suppliers, some buttressed by cross-holding, original equipment manufacturers (OEMs) can manage costs based on histories of trust and mutual obligation. Though it is still based on ambiguous contracts, over time, the keiretsu model evolved to include explicitly spelled-out collaboration on product and process design, customer intelligence-gathering and defect remediation. Keiretsu-like formations are also observed in Europe (e.g., in the supply chains of truck giant Scania and furniture vendor IKEA). A slightly different collaboration model is emerging in China. OEMs, such as Xiaomi, focus on developing a supplier ecosystem, often through the injection of capital into small and medium suppliers. The suppliers are incentivized via profit-sharing to provide goods at cost to the OEM, reducing the overall product price. Note that collaboration here is built on a financial rail, not custom or history. In fact, the success of Asian manufacturing— Japan following World War II and China recently—owes significantly to multilateral collaboration, often mediated by financial cross-involvement. Profit potential is a universal measure

BLOCKCHAIN DEFINED A BLOCKCHAIN IS A TYPE OF ELECTRONIC LEDGER created to ensure that, once a party transfers a digital asset, it cannot transfer it to anyone else. Unlike other ledgers, a blockchain is owned by participants, and decisions about what it records are subject to participant consensus. Recording accuracy is ensured by duplication: Every participant has a copy of the ledger. Discrepancy-resolution mechanisms ensure that all copies reflect identical histories. Though permissions can be managed, by default any permitted participant can view all transactions. Thus, with immutability, notarization and assured provenance, transparency is a core blockchain attribute. Blockchain isn’t simply a secure collective database. In addition to transactions, it also records and executes simple programs. In the context of supply chain management, such programs can be self-executing smart contracts that manage the flow of money. Blockchain smart contracts may also influence, or be influenced by, product movements. For instance, a positive quality assurance test indication can release a part for assembly. However, today that role is played by enterprise resource planning (ERP) systems. Blockchain technology doesn’t necessarily add value in such traditional operations management tasks.

of a firm’s self-interest. Profit, especially for SME firms, is directly correlated with the availability and price of financing. Can this observation enable collaboration based on financing rather than on produ ct flows? Can such collaboration extend beyond the buyerseller dyad?

SUPPLY CHAIN FINANCE Recent studies show that roughly 75 percent of working capital is tied up in the supply chain itself. It is not common in traditional supply chains, such as apparel or durables, to have cash-to-cash cycles of six months or more. Working capital inefficiencies combines with cross-border risks related to exchange and interest rate movements to increase the cost of goods and reduce service levels. Supply chain finance (SCF) refers to the use of short-term credit to balance

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working capital across a buyer-seller pair, and thus minimize aggregate supply chain cost, i.e., the usual supply chain costs plus the cost of money. SCF lets buyers keep their long payment terms and simultaneously ensures that suppliers are paid quickly. SCF works on interest rate arbitrage between a credit-worthy buyer and a less well-established seller. The financier purchases the seller’s accounts receivable at a discount, securing cash against the buyer’s credit. The discount assessed on the seller’s invoice amount, minus the risk premium, constitute the financier’s profit. Typical SCF spreads range from around 20 to 500 basis points. Compared to the medieval letter of credit, SCF encompasses new trade finance instruments, and thus, is a field still gaining definition. Depending on whom you ask, SCF includes or is synonymous with reverse financing,

SDCExec.com | September 2016 | SUPPLY & DEMAND CHAIN EXECUTIVE

8/31/16 2:09 PM

SPECIAL REPORT TRADE FINANCE payables financing and dynamic discounting. The money may flow from the apex buyer’s treasury, a bank with an active transaction banking practice or a trade finance fintech, such as PrimeRevenue Inc. (When the buyer’s cash is used to finance suppliers, the practice is called dynamic discounting, which is functionally the same as SCF.)

In its current incarnation, SCF leverages the buyer’s credit-worthiness to improve the supplier’s cash flow.

details in the second echelon. Nor are larger financiers necessarily capable of assessing the solvency and performance of Tier 2 firms, which are often SMEs felt to be riskier. In the simplified synthetic example hereafter, an established OEM with an Aaa rating issues a large order to SCF ON THE BLOCKCHAIN Company A. Then an OEM-partnered In its current incarnation, SCF bank offers $10 million of working leverages the buyer’s credit-worthiness capital to Baa-rated Supplier A. to improve the supplier’s cash flow. The financing is laid out as a smart But what if the buyer’s rating is strong contract on the blockchain, with enough to finance the supplier’s unambiguous triggering conditions supplier and possibly beyond? Can (e.g., verified shipment or receipt SCF equalize the cost pressure over the of goods), payment methods, timebuyer’s entire upstream supply chain? bound discount rates, etc. For instance, Supplier A may wait to receive full FIGURE 1 payment 60 days OEM Tier 1 Tier 2 Tier 3 following the receipt of goods. OEM issues to $10 smart contract Supplier But it may elect on blockchain... million A to receive up to $10 million at a discount of one basis point for each Supplier to $2 A issues day it advances million Supplier smaller B to payment. contract... Supplier C To this point, $500k Supplier B specifying the issues two contracts... buyer’s payment to obligation as a $200k Supplier D smart contract on the blockchain doesn’t offer much Extended buyer-backed financing incremental benefit other than a would require the financier to finance possibly higher degree of automation the buyer’s Tier 2 suppliers, Tier 3 over a standard SCF system. Things suppliers and so on. Such multilateral are more interesting when the contract collaboration is infeasible with existing is chained to pass on a certain fraction supply chain management (SCM) of the financing to Tier 2 suppliers of processes for two reasons: lack of Company A. Figure 1 shows such a visibility and lack of trust. chaining: Company A splits off a $2 While a financier partnered with the million chunk of the OEM’s payment buyer is in a good position to assess obligation to its supplier—Company B. SCF risk associated with the buyer’s Here, the benefits of blockchain supplier (Tier 1), it doesn’t extend to technology are easier to see: Because the supplier’s suppliers. The financier the bank can see both the original isn’t privy to financial or contractual contract (between the OEM and A), as 26

well as the order placed with Company B by Company A, it can verify both authenticity and provenance. If the contract tracks manufacturing or transportation events, the bank can know the state of fulfillment at any given time. In other words, even if the bank is not familiar with Supplier B, it can extend the company a receivables discount against the faith and credit of the originating OEM. Figure 1 also shows that Supplier B may split off smaller chunks of the OEM’s payment obligation to suppliers C and D. Again, the bank can finance C and D with greater assurance because it can guarantee the authenticity of the split contract. Note that, unlike highly customized SCF systems, the design of blockchain is decentralized and collaborative. So adding new participants (such as the Tier 2 and 3 suppliers) is relatively light: It may be as easy as scanning a quick-response code with a cell phone and authenticating participation with a digital signature. The example described is simplified and synthetic. However, the machinery to implement it exists today. Blockchain-based SCF platforms with varying degrees of sophistication in terms of workflow, customizability and linkages with standard IT systems for supply chain management are available. What should be clear is that the visibility and auditability that are hallmarks of blockchain technology allow, for the first time, financial collaboration across supply chain echelons, not just bilaterally. Where blockchain technology can take SCF from here is anybody’s guess. ABOUT THE AUTHOR SANJAY SAIGAL is the head of customer success at SkuChain, a firm offering blockchain technology for collaborative commerce. For more information, visit www.skuchain.com.

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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{ TRANSPORTATION}

EXECUTIVE FOCUS By Cynthia Y. McCann

Congestion, cargo diversions, and competition from Canada and Mexico are among the challenges.

FMC Report Highlights U.S. West Coast

PORT STRUGGLES

new report from the U.S. Federal Maritime Commission (FMC) details some challenges facing U.S. West Coast ports, including increased competition from ports in Canada and Mexico for containerized cargo destined for the inland United States. According to “U.S. Inland Containerized Cargo Moving through Canadian and Mexican Seaports 2015: Diversion, Port Expansion and Shifting Market Shares,” North American container trade grew 1.6 percent in 2015, even weaker than the 2.5 percent growth in 2014. Despite poor performance overall, Mexico’s ports grew 5.1 percent last year and Canadian ports grew 4.1 percent—more than the 0.8 percent logged by U.S. ports. If there is one consolation for U.S. West Coast ports, it’s that last year was “anything but normal,” the report noted. The friction between the International Longshore and Warehouse Union

(ILWU) and the Pacific Maritime Association (PMA) after the expiration of their six-year labor contract in 2014 compounded congestion problems at major U.S. West Coast ports. “By February [2015], at least 20 ships were anchored off Los AngelesLong Beach (LA/LB) awaiting their berths, at least 14 vessels waited outside the Golden Gate Bridge for the Port of Oakland to clear, and at least seven cargo-laden vessels waited outside Seattle-Tacoma,” said the report. Carriers and shippers that diverted cargo from the U.S. West Coast from late 2014 to early 2015 helped drive container volumes higher at competing ports in Canada and Mexico. Canada’s Port of Prince Rupert, for example, saw 20-foot equivalent unit (TEU) traffic jump 14.3 percent in 2015 compared to 2014. According to the report, “The Port of Prince Rupert poses as an attractive alternative for U.S. West Coast ports

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for U.S. inbound container traffic. In the years since Prince Rupert opened, the number of container lines offering services increased from one to 10. The port currently receives four direct calls per week. Contributing to Prince Rupert’s value proposition is its relationship with Canadian National Railway Company (CN), the FMC pointed out. CN offers an average of 14 train arrivals and 14 train departures per week, while the port’s 12,000 feet of on-dock rail and 21 reach stackers help move containers quickly between vessels and the rail. The FMC stated that Prince Rupert holds a cost advantage over U.S. West Coast ports, which could be in the range of $250 to $400 per 40-foot equivalent unit (FEU) to Chicago via rail. CN is looking to capture even more freight coming into Canadian ports and destined for the United States, added the report. “CN teamed with the Port of Mobile, Alabama, in an

SDCExec.com | September 2016 | SUPPLY & DEMAND CHAIN EXECUTIVE

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TRANSPORTATION

Panama Canal Expansion Delivers More Options By Lara L. Sowinski The completion of the Panama Canal expansion project this summer promises to have a measurable impact on containerized shipments from Asia to the U.S. now that larger vessels can transit the canal, providing an all-water route from Asia to the U.S. East Coast that was previously limited to the Suez Canal. A recent white paper from The Boston Consulting Group and C.H. Robinson, entitled Wide Open: How the Panama Canal Expansion Is Redrawing the Logistics Map, posited that East Coast ports stand to gain 10 percent additional share of container traffic from eastern Asia to the United States. While this gain for East Coast ports will not necessarily come at the expense of West Coast ports, because inbound container volumes overall will rise until 2020, “this shift of up to 10 percent will fundamentally alter supply chains,” according to the white paper. “Notably, the battleground on which U.S. ports compete with one another for customers will likely expand and move several hundred miles west, toward Chicago and Memphis. It will take in other metropolitan areas, such as Detroit and Columbus, and encompass a newly contested region that accounts for more than 15 percent of U.S. gross domestic product (GDP). In this area, shippers will often be able to route containers through East Coast ports to inland destinations at costs that are either lower or comparable to the costs that they would incur by using West Coast ports.” However, as shippers start to examine their newfound options with the expanded Panama Canal, transit time, shipping costs, and considerations related to time to market and inventory levels must be studied to determine the right port strategy for a particular commodity and an overall supply chain strategy. Meanwhile, the white paper added that three developments, in particular, would likely magnify the shift in volume through the Panama Canal to U.S. East Coast ports, including:

WWA proposed canal through Nicaragua could eventually be

built, if financing and other issues are resolved, providing an additional route for shippers to reach the East Coast.

WWCarriers could increase their use of transshipment and make a stop in the Caribbean to offload containers, a move that could favor smaller U.S. and South American ports.

WWThe use of liquefied natural gas as bunker fuel for ocean vessels could substantially reduce transportation costs. 28

attempt to establish a Third Coast gateway under the assumption that shippers burned during the congestion slowdown of 2015 will use Mobile to move imports into the Midwest. CN rail will be able to get to and from the Gulf Coast port in a period of two to three days. CN’s rail network cuts from busy Canadian ports on the West and East Coast into Toronto, then into the United States via Chicago and Detroit, and on to Memphis, and then down to the Gulf of Mexico to Mobile.” Although Prince Rupert’s rapid growth pushed it to the threshold of its capacity, evidenced in a flattening out of container volumes, the question posed by the Northwest Seaport Alliance, If there is one according to the report, is what will happen when the port consolation completes the development of for U.S. West additional berths and terminals? The answer appears to be that it Coast ports, will allow for continued erosion of U.S. market share. it’s that last Mexico also saw an uptick in year was container traffic due to cargo diversions from the U.S. West “anything although it’s unclear how but normal.” Coast, prominent a role the country’s ports will continue to play in shippers’ global supply chain strategy going forward. APM Terminals invested $900 million to semiautomate Lázaro Cárdenas Terminal 2 (TEC2) in order to handle 1.2 million TEUs annually. The newly completed project at Mexico’s second largest container port makes TEC2 the most technologically advanced container terminal in Latin America. However, the FMC report noted, “there are troubling short-term signs for cargo transiting to U.S. destinations.” Specifically, “Kansas City Southern [Railway Company] rail operations from Lázaro Cárdenas to points in the U.S. continues to experience growing pains and service reliability issues. Competition from the Panama Canal’s expanded locks will prove challenging by allowing carriers to offer all-water routes from Asia to U.S. Gulf Coast ports at rates that are competitive with rates on cargo moving through West Coast ports to points in the U.S. Gulf. In confirming the latter, Maersk [Line] recently announced it was replacing its Mexican intermodal route to Houston with an all-water service using 4,200-TEU ships.” Meanwhile, it’s worth noting that U.S. East Coast

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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TRANSPORTATION

ports also benefited from severe congestion along U.S. West Coast ports from 2014 to 2015.

ships, improved turnaround time for truckers and quicker resolutions to labor disputes. This is certainly feasible, and if successful, the U.S. West Coast will continue to see container ships return to port as trust, price and risk mitigation allow.”

LESSONS LEARNED While the labor conflict contributed to cargo diversions from U.S. West Coast ports, there are underlying problems like chronic congestion that must be addressed, stressed the report. Chassis shortages are high on the list. The current ILWU-PMA agreement requires safety inspections of certain chassis by ILWU workers, which can cause delays. Moreover, container lines recently transferred about 90 percent of their U.S. chassis business to leasing companies or other entities, which makes it difficult for truckers to obtain a chassis because container lines are continuing to stipulate the use of a specific chassis leasing company in contracts. The introduction of more mega container ships (18,000+ TEU capacity) is also adding to congestion, as ports must adjust to handle vessels of this size. On a positive note, the report mentioned: “The LA/LB port complex is in the middle of a 10-year, $7 billion investment plan to rebuild marine terminals, raise cranes to accommodate mega ships, densify terminal operations through automation and expand intermodal rail access.” Furthermore, the Northwest Seaport Alliance approved $141 million for terminal upgrades, which include expansion and the installation of Super-Post-Panamax cranes. The report concluded, “The majority of shippers will likely revert back to U.S. West Coast ports despite the attractiveness of foreign ports if U.S. ports manage to automate, expand and take steps to minimize congestion. They can do this through infrastructure improvements to better handle inbound cargo from mega

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ABOUT THE AUTHOR CYNTHIA Y. MCCANN is a Los Angeles-based photojournalist whose work has appeared in several B2B supply chain journals, including World Trade WT100 and Food Logistics. Her artwork was featured on the front page of the Los Angeles Times as part of the newspaper’s coverage of the Surfin’ Hermosa art exhibit in 2004.

SDCExec.com | September 2016 | SUPPLY & DEMAND CHAIN EXECUTIVE

8/31/16 2:14 PM

EXECUTIVE FOCUS

{ WAREHOUSING}

By Carrie Mantey

GETTING Your Warehouse IN ORDER Whether retrofitting, redesigning or designing a completely new warehouse, there are many points to consider.

“IT COSTS A LOT OF MONEY, TIME AND RESOURCES TO RETROFIT OR CHANGE THE DESIGN OF A FACILITY.” — JASON MINGHINI, KENCO LOGISTICS

arehouses are like snowflakes—no two warehouses are perfectly alike, nor should they be. Because warehouses are the perfect example of form following function, every warehouse should have a unique design based on its workflows, material requirements, staffing, and need for omnichannel flexibility and scalability. Like the design of a warehouse, the reasons for updating or designing a new distribution center (DC) are also many and multifaceted. Jason Minghini, vice president of best practices at Kenco Logistics, cites omnichannel as one of the main drivers for changing customer order patterns and, as a result, changing needs for the warehouse or DC. Because of the rapid rise of e-commerce and m-commerce, more companies are looking to cut out the middleman and go direct to consumers through the Internet to compete with Amazon and similar industry titans, which is increasing consumer preferences for fast delivery times and impeccable customer service.

As a result, many DCs must reinvent themselves to stay relevant in the marketplace. This also means there are more single items as opposed to full pallets, further complicating order picking and slowing down the order fulfillment process. All of this change is happening, while the pressure to minimize costs, and maximize service levels and profits remains a constant. Another factor for redesigning or retrofitting a warehouse is the prevalence of automation technology in the face of a talent shortage. Due to a lack of workers, automation’s return on investment is skyrocketing and making more economic sense. Getting your warehouse design right the first time is almost as important as getting your warehouse design right. An organization should first determine what goals it needs to accomplish with the retrofit or new design, conduct analyses and then execute, or there may be a high price to pay. Minghini warns, “It costs a lot of money, time and resources to retrofit or change the design of a facility. If you don’t get it right the first time, you will have wasted a lot of the organization’s money and potentially impacted the customer’s experience with their clients.”

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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WAREHOUSING

WHY RETROFIT OR REDESIGN? WHAT’S HEMMING YOUR WAREHOUSE IN?

›› Age of existing assets. Are the mechanical, control and software systems all currently supported, and able to be updated with current technology? What is the reliability of the current equipment?

The options to update or design new warehouses are infinite, so the best way to start to determine warehouse optimization is by identifying the constraints of the existing or prospective warehouse space. There are many constraints to evaluate before ever hitting the drawing board. According to Joe Hutter, senior vice president of business development, and Chris Graver, director of intralogistics design at Wynright Corporation, these include: ›› Capital. Companies need to know their budget limits for a new or retrofit project. ›› Space. Existing buildings typically have physical limitations that impact the decision to retrofit or build new. The need for more inventory to support distribution may require more space than exists or can be built on an existing site. ›› Availability of labor. If labor availability is a constraint, then the organization may search for a different location within a region where labor conditions are more favorable. ›› Technical ability of labor. Is the current technical ability of the operations and maintenance teams in line with the planned level of technology? Is additional training required if additional levels of technology are planned? ›› Information systems. Are there gaps in functionality, connectivity and visibility of the current business and information system versus the requirements for the new system?

DATA AND METRICS TO VALIDATE YOUR RETROFIT OR NEW DESIGN Hutter and Graver summarize the steps to determine the optimal warehouse design—by defining the best design and minimizing design risk—as follows: ›› Data analysis, which includes data validation. ›› Understanding current process and future plans. ›› Developing the design criteria for the new DC. ›› Evaluating applicable technology, which can include conventional and automated technology. ›› Space and capacity planning. ›› Determining viable operating scenarios. ›› Testing and evaluating alternative concept(s). ›› Simulating the concept(s) to further validate the design. ›› Selecting the optimal solution. Simulation is a common warehouse design tool as it facilitates visualization and can model what-if scenarios, including whether the design can accommodate future growth, which decreases the risk of the project’s success. Hutter and Graver explain, “Simulations are typically developed in 3D and then animated to reflect the dynamics of the design concept. The animation provides the organization

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While there are myriad reasons to retrofit or redesign an existing warehouse, the primary drivers, according to Joe Hutter, senior vice president of business development, and Chris Graver, director of intralogistics design at Wynright Corporation, are:

WWLease negotiations. If a building lease

is going to expire in the next 18 to 24 months, then organizations may partner with real estate professionals to begin searching for alternate sites to ensure they are in a position to minimize their future cost per square foot, whether they renegotiate to stay in their existing facility or relocate.

WWLabor costs. There is renewed pressure for minimum wage increases, which is affecting decisions regarding location and automation. Companies may evaluate higher levels of automation to offset rising labor costs.

WWLabor availability and skill levels. There are concentrated areas of distribution centers throughout the country because these areas are ideal for optimizing supply chain costs. Companies are facing labor shortages, and therefore, may look toward retrofitting or greenfield options that require less labor.

WWGrowth. Companies may run out of

space due to sales growth and the number of SKUs they need to carry in inventory.

WWSales channels. Many distributors are

confronting challenges due to changes in order types. For example, retailers are shifting more of their capital to e-commerce as sales are increasing in this channel much faster than for brick-andmortar stores. E-commerce demand is dynamic and driving high service levels, in addition to increasing the handling costs of unit level orders.

WWSafety. Safety is of increasing importance in the workplace to improve associates’ well-being and productivity. Related to safety is the drive to eliminate hazardous and repetitive work, and to improve ergonomics.

WWInventory. There is a continuous effort to optimize inventory levels across all industries. In distribution, inventory management tries to balance the countervailing metrics of lower days of inventory on hand and higher order fill rates, along with managing replenishment methods and cycles.

SDCExec.com | September 2016 | SUPPLY & DEMAND CHAIN EXECUTIVE

9/2/16 11:20 AM

WAREHOUSING

THE POWERS THAT BE CAN By Todd Kiehn BE OMNIPRESENT Uninterruptible power supply systems condition incoming power to eliminate the risk of power disruptions at your new or retrofitted warehouse facility. In mission-critical operations, even the slightest power disruption can have major consequences in terms of time, money and resources. These disruptions are becoming more of an issue as today’s industrial and manufacturing facilities turn digital with ever-increasing levels of automation being put in place. To address these issues, uninterruptible power supply (UPS) systems condition incoming power to eliminate the risk of power disruptions and, in the event of a power failure, keep equipment fully operational until the critical load can be transferred to a generator. Every facility has a unique set of needs, so there isn’t a one-size-fits-all solution. Several factors should be considered when selecting a UPS, including system performance, reliability, environmental impact, maintenance and replacement cycles, cooling requirements and, of course, total cost of ownership (TCO), which includes initial and operating costs over the product’s useful life. Before selecting a UPS, operators should do their research, and ask for spec sheets, customer references and third-party product comparisons. A number of energy storage technologies are available for UPS applications, including conventional batteries, as well as less common options, such as flywheels and diesel rotary devices. Battery-based UPS systems typically use valve-regulated lead-acid batteries to store energy, whereas flywheel and rotary systems use kinetic energy. Battery-based solutions are the traditional choice because these systems have been deployed in mission-critical environments for more than 50 years. There’s a perception that selecting a battery UPS is less of a risk. Batteries can also provide five to 30 minutes of backup time, which provides a psychological benefit to customers. However, that backup time has significant costs, including initial cost, lifetime operating cost and environmental impact, and is becoming less important with advances in electrical infrastructure. As a result, more and more users are looking for ways to reduce their dependency on batteries. There are many risks involved with battery UPSs. Batteries are comprised mainly of toxic lead acid, which can be harmful to both people and the environment. Additionally, these systems must be housed in cabinets that take up a great deal of space and do not fare well in environments without precisely controlled temperatures. The maintenance and cooling involved with battery UPSs increases the overall cost of operation and carbon footprint. Batteries also degrade over time, and require replacements every four to six years or sooner depending on usage. Flywheel UPS systems have high operating efficiency and permanent energy storage, meaning the flywheel never has to be replaced during its 20-year life span. These two inherent advantages are the main reasons the product delivers up to 40 percent in TCO savings and produces 90 percent less carbon emissions than battery UPSs. The systems are also proven to be 12 times less likely to fail than conventional offerings. Flywheel UPS products can also operate in higher ambient temperatures and are more space efficient, meaning operators can place a system directly on the shop floor closer to the load it’s protecting. This also eliminates the need for dedicated UPS and battery rooms. As concerns over pollution and global warming grow, interest in cleaner, sustainable technologies will also increase. Flywheel technology is more efficient and environmentally friendly than conventional battery UPSs. Plus, square footage is always a premium in industrial settings, which bodes well for flywheel UPSs and other hardware that is more compact. No matter what kind of UPS system is selected, however, your facility will be powered, eliminating the risk of downtime. Todd Kiehn is the vice president of marketing and modular solutions at Active Power Inc.

with a view of the future and team members can quickly identify areas that may require further design. Operations are complex and, typically, static spreadsheet models cannot adequately identify constraints, or logic and controls issues. “Simulations provide organizations the ability to model their future operation by inputting actual or synthetic order information, and then determine whether the solution they selected will meet future needs. In addition to the enhanced graphics and animation, simulations generate output data over the simulation run, which can be analyzed to determine the future performance of a design.” Minghini concurs that simulations should be performed before design implementation, so organizations can analyze the impact of different designs on key performance indicators, such as material flow, congestion, travel distance, velocity of the product, order profiles, product segments, storage density requirements, regulatory and/ or government requirements, and service requirements from the customer. He says, “By doing simulation work, the best possible design can be chosen to match current order profiles.” Hutter and Graver also suggest using historic data to inform future decisions, such as transaction details from previous years—customer orders, receiving data and inventory profiles, to name just a few. Other key metrics to consider include growth projections, head count, customer service levels, order accuracy and total productivity.

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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9/2/16 11:20 AM

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EXECUTIVE FOCUS

{ SOFTWARE & TECH}

By Wayne Caccamo

BLOWS UP SUPPLY CHAIN RISK MANAGEMENT Emerging digital supply chains are supply exchanges that electronically fulfill supply requirements for more customized products on demand and closer to the buyer.

D printing is already dramatically altering the discipline of supply chain risk management (SCRM) and resiliency in some markets, making many relatively modern concepts and best practices obsolete. For many other markets, it’s just a matter of time before 3D printing drives supply chain risk managers to either completely redefine what they do or find another career. Many opinions and a lot of research has been published on how 3D printing may impact supply chain management. Many of the themes— including reduced inventory, decreased product and supply chain complexity, and shorter lead times—have a profound impact on supply chain risk. However, no analysis has yet to look at the 3D printing phenomena exclusively through a supply chain risk lens.

SCRM TODAY Supply chain risks take many forms, including business continuity, brand and compliance, capacity and cybersecurity. Many of these risks are born, and fester, in large, global and complex supply chains. Often, they are the result of a lack of visibility into upstream (multi-tier) supply chain actors beyond direct (Tier 1) suppliers. 34

You can’t manage what you can’t see. As a result, a key focus of SCRM is to first map and visualize the supply network at the factory site level. The risk-related data collected about the network configuration, the nodes of the network (company-owned factories and supplier sites), and the flow of materials and parts is then analyzed to determine threats and vulnerabilities for proactive mitigation.

DIGITAL SUPPLY CHAINS For a growing number of product categories, 3D printing changes the supply chain risk management planning assumption that supply chains are global and highly complex, and that the central building block of all solutions is visibility. Over time, 3D printing can collapse these multi-tier supply chains. There are three attributes of the 3D printing-enabled digital supply chain that can drive this collapse. First, the economics that drove globalization

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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SOFTWARE & TECH

of production (i.e., cheap offshore labor plus transportation costs is cheaper than domestic production) do not apply. Less labor-intensive 3D-printing operations, combined with the opportunity to manufacture to order and deliver on demand, can tip the calculus on whether to onshore or offshore manufacturing toward reshoring. Second, finished products and components do not

necessarily consist of subcomponents and materials sourced from upstream suppliers. 3D printers are capable of product simplification or consolidation. With 3D printing, a single process is used to print out finished products using a single raw material (e.g., plastic, ceramic or metal). As a result, many tiers of processing and assembly, if not all in some cases, can be eliminated. Third, because supply can be printed on demand, the need to manage upstream inventory at every level of the supply chain is eliminated. Thus, 3D printing makes the most basic tool of supply chain risk, inventory buffering, obsolete. In fact, digital supply chains and

3D printing make inventory obsolete. This also applies to downstream multi-tier logistics networks, which include regional and local distribution centers, and retail point-of-sale locations. Ultimately, consumers are going to be able to print products on demand at their own premise or local FedEx. In this future, shipping physical products is obsolete; the only thing that is delivered is a license to print a product design file. In sum, today’s complex, global supply chains are the result of complex products built using cheap, globally sourced labor. Emerging digital supply chains are not chains, but supply

Control the chaos. Today’s manufacturing companies often struggle to get visibility into their complex logistics operations. iManage™ is a high value asset tracking solution that monitors and tracks the ﬂow of parts, assemblies, and containers throughout the supply chain. Receive instant alerts when the tracked assets deviate from pre-established routes, or when problems occur. Identify waypoints, dwell times, and use dynamic geo-zone capabilities with directional tracking to improve proﬁts by controlling a dynamic and often hard to manage supply chain. Control the chaos in your supply chain with iManage. To learn more about iManage call 1-877-980-6208 today or visit numerex.com/imanage © 2016 Numerex Corp. All rights reserved. Numerex is a registered mark of Numerex Corp.

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exchanges that digitally fulfill supply needs for more customized products on demand and closer to the buyer.

REASSESSING TRADITIONAL SUPPLY CHAIN RISKS

IN A 3D PRINTING-ENABLED SUPPLY CHAIN, LOCATION-BASED, OPERATIONAL AND NETWORK DESIGN RISKS ASSOCIATED WITH SUPPLIERS AND SITES ARE IRRELEVANT BECAUSE THERE IS NO SUPPLY CHAIN.

The infusion of digital technology is unraveling assumptions and principles that have underpinned effective supply chain management for decades. Therefore, it is not surprising that the management or even relevance of a variety of supply chain risk types may be permanently altered by one of the most important engines of the digital supply chain transformationâ&#x20AC;&#x201D;3D printing.

BUSINESS CONTINUITY RISK Business continuity risk is the risk that a sub-tier supplier may not be able to deliver supply due to an unplanned business disruption. These disruptions result from a variety of causes, such as extreme weather, factory fires, labor strikes, geopolitical events, and financial or organizational challenges. In a 3D printing-enabled supply chain, location-based, operational and network design risks associated with suppliers and sites are irrelevant because there is no supply chain. As a result, the common risk management process of gaining sub-tier supplier visibility in order to assess disruption risk potential is obsolete. And the risk mitigation exercise of identifying single sources and qualifying alternate suppliers is obsolete as well. Even the more forward-thinking SCRM concepts, like product design for resiliency, may not apply. The proactive practice of working with design and engineering teams to

design out components that spur potential business continuity risks becomes irrelevant. This is the case in manufacturing scenarios in which products, consisting of assembled components, are redesigned to be 3D printed as a single consolidated SKU.

BRAND AND COMPLIANCE RISK Supply chain brand and compliance risk refers to the reputation and financial risks of being linked with a supplier singled out as having illegal or questionable business practices. Frequently addressed under the umbrella of corporate social responsibility, these business practices can relate to issues of worker safety and conditions (including slave labor and fair labor contracts), environmental impact or other legal/regulatory breaches. Compliance risks can have more immediate financial penalties, while brand risks can have longer-term financial consequences. Brand and compliance risk presumes a multi-tier supply chain and a lack of visibility to all actors. Reshoring enabled by 3D printing eradicates these sub-tier brand and compliance risks by eliminating geographically remote and unmonitored sub-tiers. 3D printing also benefits brands by greening the manufacturing process. 3D printing is referred to as additive manufacturing because it builds an object by adding thin layers of material one by one, incurring little waste. This contrasts with traditional subtractive manufacturing in which products are produced by the controlled removal of material, so waste and scrap material is a significant byproduct.

CAPACITY RISK Today, supplier capacity risk is another factor supply chain managers must evaluate to ensure the uninterrupted flow of parts and products. A lack of visibility into

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supplier capacity constraints can lead to lost revenue and market share, and declines in customer satisfaction, if companies cannot respond to supply shortages and demand surges. In select markets in which 3D printing applies today (e.g., a variety of customized, low-volume finished products), capacity risk is eviscerated by the ability to print supply on demand. There is no need to carry inventory or safety stock. It is important to note, however, that 3D printing must yet prove itself in markets for high-volume standardized products.

be viewed as more manageable, while in others, it creates whole new vulnerabilities. The collapse of the largely invisible n-tier supply chain makes the potential sources of upstream breaches much more contained. Yet, the decentralization of production at the point of consumption shifts and proliferates points of failure downstream. Of course, this opens up a new world of digital rights management challenges. Are we going to see the next-generation Napster providing free downloads of unlicensed product design files for printing? Think of the security implications for 3D-printed pills, body parts and firearms—all of which are beyond the demonstration phase.

DIGITAL SUPPLY CHAINS AND 3D PRINTING MAKE INVENTORY OBSOLETE.

SECURITY RISK Contemporary supply chain security risks include both physical risks, such as product tampering, and cybersecurity risks. Cyber risks may include information breaches related to the location of supply in transit, associated financial transactions and contracts, design specs, intellectual property and digital usage rights. The digital supply chain eliminates most physical supply chain risks. However, cyber threats are best described not as diminished or amplified, but transformed. In some respects, cyber challenges can

THE THIRD INDUSTRIAL REVOLUTION Futurists believe 3D printing signals the beginning of a third industrial revolution. Clearly, its usage is in its relative infancy and confined mainly to its sweet spot: low volume, low to moderate

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manufacturing complexity, and high customization level products and parts. However, those that are not following this technology closely and have a stake in its future will be surprised, if not shocked, to find its growing application and usage beyond prototyping and research. 3D printing is already here to stay in a variety of industrial and consumer manufacturing verticals, including apparel, construction, electronic and medical devices, automobiles and aerospace. While you are not going to see a 3D-printed car any time soon, you can expect that many or most parts will be 3D printed. As a result, in the near term, you can expect today’s complex supply chains to evolve to hybrid physical-digital networks, while other markets go all digital. Even the food industry is looking at 3D printing to customize and personalize its food packaging. It’s hard to imagine an industry that will not be affected by 3D printing, and this will change the notion of supply chain risk management and resiliency forever. ABOUT THE AUTHOR WAYNE CACCAMO is a marketing executive based in Silicon Valley. He has been instrumental in the formation and development of several new enterprise/business-to-business solution categories based on cloud technology. Most recently, he has served as chief marketing officer for a pioneering cloud provider of supply chain risk management intelligence and analytics.

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EXECUTIVE FOCUS

{ SOFTWARE & TECH}

By Elliot Maras

CLOUD TECHNOLOGY BRINGS NEW EFFICIENCIES TO SUPPLY CHAINS Users cite improved economy, scalability, ease of upgrades and enhanced competitiveness when they move to the cloud

n 2015, Infor’s acquisition of GT Nexus for $675 million signaled the rising importance of cloud technology in supply chain management. In acquiring the GT Nexus cloud chain platform, the enterprise software provider realized that the collaborative nature of contract manufacturing calls for faster coordination of design, manufacturing and shipping, which cloud technology can uniquely manage. Enterprise software’s migration to the cloud foreshadows a supply chain driven by robust scalability, reduced costs, improved versatility and faster access to critical data, all of which enhance a company’s competitiveness. The cloud, with its ease of adoption, permits “The ability to bring these sites up companies to manufacture, quickly, seamlessly, on the same distribute and launch faster, says Jason platform, and not having to invest products Tham, CEO of Nulogy in hardware, additional servers Corporation, a provider of cloud-based solutions for and equipment, makes contract manufacturers, a huge difference.” packagers, third-party logistic providers (3PLs) Johan Pot, Crescent and brands. Tham says 38

cloud technology is supporting the rising demand for mass customization, whereby manufacturers want to cater to local tastes. “Producing closer to the point of consumption is something a brand wants to do, not only to reduce costs, but also to ensure speed to market despite the complex supply chain processes involved in mass customization,” he says. “Cloud is certainly an enabler for this.” Consumer packaged goods (CPG) companies are outsourcing contract packaging in their distribution centers (DCs), requiring contract packagers to deploy assets and software in their DCs. Cloud technology is a critical enabler, says Johan Pot, senior vice president of sales and marketing at Crescent, a contract packager. “The ability to bring these sites up quickly, seamlessly, on the same platform, and not having to invest in hardware,

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additional servers and equipment, makes a huge difference,” says the Nulogy customer. Cloud technology is also lowering deployment costs for manufacturing execution system (MES) software, giving smaller companies access to MESs for the first time, says Srivats Ramaswami, CTO at MES provider 42Q. Deployments can be achieved in six weeks rather than several months.

software provider. Jones maintains the cloud does not have anywhere near the same traction in supply chain planning, but it holds much potential. The benefits of the cloud are important to the supply chain since companies use their supply chains to differentiate themselves, Jones notes. “Every supply chain is unique, and hence, the solutions are customized, which makes it harder to maintain. So the good cloud companies are able to allow their customers to have customizations, yet also allow upgrades,” he says. One area where the cloud is making noticeable headway is in transportation management systems (TMSs). Transervice, a provider of transportation solutions, switched from an on-premise server solution to a cloud-based solution for the efficiency of deployment and the cloud provider’s willingness to customize interfaces. Transervice sends and receives delivery information automatically with its customers. “It’s a lot easier to assimilate

HOW LONG WILL IT TAKE? What’s uncertain, however, is how long this transition to cloud technology may take, given the natural resistance to change, and lingering questions about the technology’s reliability, security and integration with legacy systems. The cloud changes the business model in that the user does not own the hardware. While the cloud touts faster integration of software silos as one of its benefits, the integration can present challenges for companies that rely on more traditional on-premise systems. Legacy users already invested significantly in on-premise systems. Many view the cloud as insecure and prone to hacking. Some are concerned about possible problems with partner integration. And because subscription applications are accessed via the Internet, some also worry about insufficient response times for high-volume data applications such as warehouse management systems.

with [customers] in a cloud-based environment than it is to develop a custom integration deal with a partner who is server-based, in terms of both flexibility and making dynamic changes,” says Joe Evangelist, executive vice president at Transervice. “When I can get real-time actionable data captured, it maximizes my ability for on-time delivery.” As the reliability, security and speed of the Internet improve, the cloud is becoming a better option, says Jerry Robertson, BOLT System CTO and former vice president at Oracle. BOLT can scale a customer from 50 trucks to 1,000 trucks quickly with no downtime and only a monthly subscription fee for each truck in service. A server-based system designed for 50 trucks does not allow a user to scale up quickly. At the same time, a server-based system built for a large fleet requires a significant investment without offering any flexibility if the system doesn’t meet expectations.

CLOUD MAKES HEADWAY Cloud technology is increasingly taking hold in enterprise software, including sales, customer relationship management, human resources and enterprise resource planning (ERP), observes Glenn Jones, CTO at Steelwedge, a supply chain planning

Cloud Logistics’ Logistics Activity Stream is the social technology component of TMS.

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As ERP providers embrace the cloud, they are pushing cloud technology further into supply chains, Robertson notes. This is important as transportation needs are becoming more complex due to omnichannel expansion fueled by e-commerce. TMW Systems, a TMS software provider, recognized the need to move data among systems seamlessly. Hence, the company introduced software-as-aservice (SaaS) versions of its business intelligence solutions. The trend is moving from generating mass amounts of data to being able to actually use the data, says David McKinney, principal of business intelligence and optimization at TMW Systems. Carrier customers provide lane and rate information that allows TMW Systems to create useful operating metrics. “Bringing all this information into the cloud affords us the opportunity to extend our understanding of the market in real time,” he says. This delivers market dynamics to the customer. “We’re transforming from a world where only a select handful of people have sophisticated intelligent technology. Now everybody has it,” says Abtin Hamidi, co-founder and executive vice president of Cargo Chief, a freight broker that provides a cloud-based platform for matching shippers and carriers. Hamidi thinks shippers are no longer going to focus on long-term contracts since capacity is becoming 40

This driver is using a BOLT app that lists his stops.

accessible more quickly, thanks to the cloud. Long-term contracts provide stable pricing, but it is expensive.

TRANSPORTATION GETS COLLABORATIVE “Transportation is the most collaborative space in supply chain,” observes David Landau, executive vice president of Cloud Logistics. A centralized carrier portal hosted by Amazon Web Services simplifies a carrier’s interaction with shippers. An on-premise TMS, on the other hand, requires each shipper to maintain its own connectivity with each carrier. The cloud also allows social mediatype messaging to be embedded in the TMS data stream, so personal messages can occur within the stream. The recent verified gross mass (VGM) requirement for ocean containers under the International Maritime Organization’s Safety of Life at Sea (SOLAS) convention encourages ocean shippers to use cloud-based software. The SOLAS VGM requirement demands that a container’s gross weight be verified before being loading onto a ship. Several cloud-based systems allow shippers to communicate with

carriers without requiring a separate connection to each carrier. Bryn Heimbeck, co-founder and president of Trade Tech Inc., a cloudbased logistics software provider, says ocean shippers may find cloud technology brings benefits beyond complying with the new VGM requirement. “With a cloud-based portal, you’re able to gather the shipping data in one place and have the ability to send the data to whoever is required to have it, no matter where they are in the world,” he says. Rubicon Global Holdings LLC uses cloud-based technology to connect its network of independent waste haulers, allowing each provider the scale needed to compete with national providers. The system is akin to an Uber for waste haulers. “The cloud allowed us to scale incredibly fast,” says Nate Morris, Rubicon co-founder and CEO. The technology allows the haulers to run the business better and gives customers real-time information. Rubicon’s data can determine the right amount of service a customer needs, addressing a critical problem in waste hauling—overservicing.

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EXECUTIVE FOCUS

{ PROFESSIONAL DEVELOPMENT}

By Carrie Mantey

Put Me In, COACH!

C-suite mentorships not only improve mentees’ performance and advance their careers, but also provide benefits for mentors and organizations.

ave you ever walked into a colleague’s office to ask if you could bounce an idea off him or her? That kind of dialog facilitates open collaboration and spurs innovation. While mentoring is a more formalized relationship, it, too, can be a great resource for up-and-comers looking for advice from someone who has been there and done that—whether it is related to a project, career advancement, general business skills or otherwise. The important element of beginning a C-suite mentorship—a mentorship in which a C-suite professional is doing the mentoring—is to establish the goals of the partnership, whether it’s the mentor showing the mentee the bigger picture, or where he or she fits in to a company’s overall strategy, to becoming the next CEO. Stacy Richards, vice president of business development at Menttium Corporation, a corporate mentoring agency, says, often, “The overall goal of a mentoring experience is to help the mentee strengthen current performance, as well as prepare him or her for future positions. There’s not much that C-suite professionals haven’t encountered in their careers, so you can expect mentors to be knowledgeable.”

THE FOCUS IS THE MENTEE Mentoring is an educational tool using personal experience as a qualifier, 42

so virtually all topics—and how to present those topics—are on the table for discussion. Mentoring, therefore, is not an exercise in the one-size-fits-all approach. There’s formal mentoring versus informal. Internal mentoring versus external. And one-mentor relationships versus multi-mentor. There is one constant, however, among all of the options. To be effective, each C-suite mentorship should be tailored to the individual goals of the mentee, which can vary wildly from mentorship to mentorship. Thus, C-suite mentors should focus on areas of improvement most critical to the mentee. Richards emphasizes, “It’s critical that a mentee drive his or her own learning agenda. The focus should be on the mentee’s development goals, and aligning those with the mentor’s interests and experience. If mentees are motivated and open to learning, they will be comfortable seeking out a mentor, and learning from him or her.” When engaging in a C-suite mentorship, Tisha Danehl, vice president of Aijilon Professional Staffing, concurs that the first questions for the mentor should always be: Where does my mentee need specific help? Is he or she struggling with hard or soft skills? Which ones? Then the mentor should formulate a plan for resolving those specific issues. She suggests, “Tailor the knowledge, the skills and the personal experience

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to what the mentee is looking for. ” The most effective C-suite mentoring relationships are open and honest. Mentors should understand that professional and personal guidance are two sides of the same coin, so they should be prepared to share anything that may aid the mentee in his or her journey as long as it’s not proprietary, confidential or ethically ambiguous. Richards explains, “You want your mentors to talk generically about experiences without necessarily naming the people or organizations that were involved.” When it comes to the type and frequency of communication, every mentorship differs, so each participant should set expectations of how often and by which means to exchange knowledge. Danehl thinks a consistent weekly or monthly call or visit typically suffices, but also encourages mentees to shadow mentors in their day-today activities. The more exposure the mentee has to the mentor, the more he or she is going to benefit. Richards is a proponent of formal mentoring because she feels the mentor and mentee are more apt to receive the resources and guidance needed to establish a solid mentoring relationship. “Formal mentoring programs provide guidance on the optimal structure for the relationship, for example, how often you should meet, what time works best, whether to meet in person or virtually, how you should structure each meeting, what you want to do to keep the momentum going throughout the course of partnership, etc. “At Menttium, we recommend at least a 12-month partnership, meeting at least once a month for at least one

hour. We found that partnerships can meet more frequently, especially in the first few months, as the mentee’s goals are being established and the partnership is really getting into its rhythm.” This brings us to another caveat to C-suite mentoring: Mentees need to be respectful of mentors’ time. C-suite mentors already have a lot of responsibility to shoulder, so flexibility is a must when scheduling. Mentees need to be mindful of what kind of time and effort a C-suite mentor plans to bring to the table, so they can manage expectations.

IDENTIFYING HIGH POTENTIALS AND MENTORS The types of employees that are ripe for C-suite mentorship are what Danehl refers to as high potentials— the types of employees who are motivated or overtly express interest in wanting to take the next step in their careers, whether they have been on the job for one or several years. More and more, ambitious young employees are pursuing mentoring relationships to achieve their career goals and

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TO BE EFFECTIVE, EACH C-SUITE MENTORSHIP SHOULD BE TAILORED TO THE INDIVIDUAL GOALS OF THE MENTEE, WHICH CAN VARY WILDLY FROM MENTORSHIP TO MENTORSHIP.

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dreams faster. Additionally, Danehl suggests that companies target those high potentials or employees they would like to retain for C-suite mentoring opportunities. Not only does mentoring correlate to positive retention benefits, but it also lets employees know the company values them and prioritizes their education. Richards elaborates, “The best mentees are those people who are motivated to grow and develop, and willing to put in the work they need to for their own development. You want mentees to be open to feedback and, most importantly, really committed to the process.” To identify potential mentors, Richards suggests looking for altruistic people who are willing to share their time and experiences to help other professionals succeed. “The best mentors are those people who are always generous with their time and willing to openly share their experiences—successes and failures. You want to find people who are willing to admit to mistakes they made, talk openly about them

and what they learned as a result.” Danehl thinks that internal C-suite mentors are more effective than external mentors because they can apply their life experience within the context of that company, which also may give them more credibility in the eyes of the mentee. She says, “Ideally, it would be great for someone who experienced progression within the company or within the industry. It’s always nice to have that firsthand experience.” Richards agrees that internal C-suite mentorships are ideal for passing down tribal knowledge and certain intricacies of the business, such as ideas on the organization’s vision, mission and leadership. She says, “Sharing of tribal knowledge internally through mentorships can be a big advantage. Lots of what senior leaders know about company culture, secrets to success and the mistakes the organization made in the past aren’t necessarily formally recorded somewhere, so mentoring relationships can be a critical way to pass that type of knowledge down. Relationships and ongoing conversations between

the mentee and the mentor are just a great way to capture some of those learning moments and key pieces of organization history that you’re not going to learn somewhere else.” Richards believes there is also a time and a place for external C-suite mentorships, especially when the objective of the relationship is to improve hard and soft skills, not necessarily to achieve companyspecific goals. She warns that, sometimes, “Mentees are less willing to be open and vulnerable with mentors ® in their own chain of Results Through Applied Intelligence command, or even in their own organization, no matter Industries JVKellyGroup, Inc. provides cost reduction and risk mitigation solutions for JVKellyGroup has worked some of the world’s largest organizations. By offering an integrated set of how large it is. That’s where with some of the world’s largest organizations across multiple analytics, sourcing services and technology, JVKellyGroup helps ensure that external partnerships can be industries including: a company’s spend is effectively analyzed, sourced, managed, and monitored. » Financial Services particularly effective.” » Pharmaceuticals

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A MUTUALLY BENEFICIAL RELATIONSHIP While discussing what a mentee may get out of a C-suite mentorship, and what kind of attributes to look for in a mentee and mentor, the question begs to be asked: What exactly

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Industry executives rub elbows at Menttium Corporation’s 25th anniversary. Events like these are ideal for mentors and mentees to attend for networking purposes.

when they’re mentoring. They can learn about trends in the workforce and new technology skills from their mentees. It’s a safe environment for mentors as well. They can admit to what they don’t know, and they can learn from their mentees at any stage of their career or life. ” C-suite mentorships share other teachable moments with mentors as well, such as how job functions are changing with the advent of new technology and increasing expectations. This hands-on experience can offer mentors new perspectives and even lead to better decisionmaking. Furthermore, Danehl thinks C-suite mentorship is a fantastic way to reimagine your job, or at least parts of it: “The C-suite executive may be too involved in daily operations to go out to see clients. Having a mentee— and having to shadow a mentee on a client visit—could get the mentor to

does a C-suite mentor get out of this partnership, especially considering the time investment? Well, it appears that many mentors get just as many, if not more, benefits than a mentee. There is potential for reverse mentoring, the ability to hone coaching skills, a new perspective on job progression, and a reinvigoration for the company or industry in which the mentor works.

SOMETIMES, THERE’S NON-TANGIBLE KNOWLEDGE THAT IS NOT IN AN OPERATION MANUAL OR BOOK, BUT CAN ONLY BE EXCHANGED BY SPENDING TIME WITH SOMEONE.

— TISHA DANEHL, AIJILON PROFESSIONAL STAFFING Reverse mentoring is when a less senior employee teaches a more senior employee. In today’s four-generation workforce, for example, you may witness a millennial teaching a baby boomer how to use a new analytics app. Younger generations are generally more intuitive with technology because they’re more familiar with it, so helping a less technologically savvy employee use it to get a job done is the quintessence of reverse mentoring. Richards concurs, “C-suite leaders get invaluable insights from the front lines

remember some of the more exciting parts of the job.” Regardless, the benefits are reciprocal for mentors and mentees in almost every partnership, but especially in the most successful ones.

HOW DO ORGANIZATIONS BENEFIT? While there are a number of benefits for organizations that take advantage of C-suite mentorships, the first and

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foremost is increasing leadership succession planning and diminishing employee turnover. Danehl opines, “It’s about leveraging the talent that you have—both the C-suite and the mentees—for leadership, and knowledge transfer for hard and soft skills.” Leadership succession planning and employee retention are becoming more and more critical for organizations because the talent shortage is looming increasingly large. In addition, employee turnover is escalating, while C-suite tenure is in decline. According to Richards, “Mentoring in the C-suite often guides future leaders of the organization. I think that’s one of the primary motivations for involving C-suite leaders as mentors within an organization. It gives mentees the benefit of their broad experiences and cultural knowledge within the organization.” Danehl also says that C-suite mentoring adds value to an organization because it legitimizes training when a mentee is taught from someone who was, at one point, in the trenches. She says, “Sometimes there’s non-tangible knowledge that is not in an operation manual or book, but can only be exchanged when spending time with someone.” In summation, Richards explains that, when a company institutes a C-suite mentoring program, “There’s greater cross-functional sharing of information and ideas, which really helps the organization. There’s also networking that happens in those partnerships, and the introductions that happen among the networks for mentees and mentors often lead to benefits inside and outside the organization.”

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SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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can experience the decision-making power of the transportation network. The immediate benefits are business process efficiencies and lower operational costs. The long-term and sustainable value is a permanent change in your supply chain operations through internal process improvements.

WATCH YOUR NETWORK GROW While every organization has specific requirements, implementation of LeanTMS begins by networking your transportation offices, warehouses, distribution centers (DCs) and carriers. Additional facilities or departments are added on as needed. Central command is established through LeanTMS. You are now in control of your transportation network. The information in the transportation network can provide you with actionable intelligence to refine internal processes, which leads to better business decisions that impact the bottom line. As your transportation data aggregates through this neutral network, it becomes more meaningful to your team with increased collaboration and problem-solving. Load density begins to inch up, inbound becomes manageable, empty miles notch down and the number of appointments filled surges. Key performance indicators are developed for in-house and contract carriers, third-party logistics providers (3PLs) and other service providers. As needed improvements come into focus, you can use the network to connect to other member carriers and service providers, gaining access to capacity or better rates in your key lanes. Complex activities become more systematic and problems are solved faster through collaborative teams in the network. Your users have a faster route to

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meaningful data and an easier way to communicate with others. The LeanLogistics Transportation Network allows users to find people who have the right knowledge to further collaborate and engage with each other. Individual productivity rises by cutting down the time it takes to complete key tasks. When users can find the right people and get the right information, they can truly grow and become more productive.

The information in the transportation network can provide you with actionable intelligence to refine internal processes, which leads to better business decisions that impact the bottom line. With a community of leading companies in food and beverage, manufacturing, retail, 3PL, and other industries enabled by SaaS technology and a neutral network, LeanLogistics is the backbone for supply chain collaboration. The network provides LeanLogistics customers with complete visibility to real-time industry data to save time, money, resources and assets across the entire transportation process. All this from a TMS? Yes, LeanTMS.

FOR MORE INFORMATION: solutions@leanlogistics.com www.leanlogistics.com

SDCExec.com | September 2016 | SUPPLY & DEMAND CHAIN EXECUTIVE

9/2/16 10:35 AM

ADVERTORIAL

VIDEO-

EMPOWERED INNOVATORS:

Delivering Responsive Service and Uptime for Customers

lobal competition, expertise shortages and demanding customers are driving enterprises to transform service and product development processes. Market-leading enterprises are now seeking innovative ways to leverage experts using live video collaboration in the field, and to capture this expertise within a knowledge base of recordings and images. As Aly Pinder Jr., senior research analyst with Aberdeen Group, states in the Video-Enabled Service research report, â&#x20AC;&#x153;Leaders now realize that building a better machine or delivering to the service-level agreement is not enough. To truly stand out, these organizations must ensure that their field teams can resolve customer issues as soon as they arise and accomplishing this requires a real-time connection to answers. Video is providing this connection for organizations and helping them make the leap into the future of service.â&#x20AC;? This real-time connection to answers means that field workers must be able to access remote experts quickly to talk, share live video and images, and diagnose issues. Depending on the network and 48

Enterprises are seeking innovative ways to leverage experts using live video collaboration in the field. physical environment, that real-time video connection can be very challenging to achieve. Teams may be in a basement with only one bar of cellular or at an oil rig with restricted satellite connectivity. One company that provides technology to enable this live field collaboration and knowledge base capture is Librestream Technologies. Its solution, which was recently awarded the SDCE 100 honor, involves the use of virtual presence technology to enable live video diagnostics from challenging field environments, and the ability to create, tag, search and share knowledge base content. Innovative enterprises are adopting this video capability to differentiate and add value for customers. Gone are the days of delayed email responses and returning to customer sites with experts in tow. Here are three examples of enterprises that have deployed video-enabled services for their customers. These innovators have evolved their traditional work processes to embrace modern, responsive approaches that elevate their service operation.

VOITH DIGITAL SOLUTIONS Voith is a global technology provider in markets such as energy, oil and gas, paper, raw materials, and transport and automotive. The Voith Digital Solutions division develops digital solutions and services to support customers with the optimization of their business processes. One of these new services is OnCall Video to virtually bring remote experts to customer locations. Juergen Kaeser, head of global service Papermaking 4.0

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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at Voith Digital Solutions, explains, “The paper industry is globally facing a constant loss of expertise driven by cost pressure and the retirement of the most experienced professionals. It is extremely hard to capture and transfer their knowledge for the next generation. With remote video support solutions, we can make our experts available everywhere in the world at any time.” In the capital-intensive industries that Voith serves, equipment uptime is critical to its customers’ profitability. As Kaeser states, “Uptime is the key performance indicator that determines our customers’ success. Any unplanned event that interrupts 24/7 production needs immediate attention. The OnCall Video service helps us provide fast remote failure diagnosis and resolution, which adds value by reducing unplanned downtime.”

“We originally piloted this solution with a subset of our technical communicators and field service technicians in the agriculture product division. That pilot demonstrated strong results, including faster response times, higher equipment uptime and productivity gains. In some cases, we accelerated support resolution times by as much as 60 to 70 percent,” shares Hesse. This video diagnostic capability is proving to be a core tool for a wide range of Ziegler customers.

DIEBOLD NIXDORF

Diebold Nixdorf, a provider of self-service innovation, security and services to financial, commercial and retail markets, first launched a video service for its field teams in 2015. As Bill Fletcher, then vice president of global remote services delivery at Diebold Nixdorf, explains, “Continually evolving our customer service to drive improved performance for our customers is core to our business. It is important to give our service teams the tools to more rapidly respond to issues that occur in the field.” Librestream’s solution involves virtual presence technology to The initial video solution deployment enable live video diagnostics from challenging field environments. equipped field technicians with the With this video-enabled service, Voith provides ability to share live video and talk with Diebold a competitively differentiated offering that takes Nixdorf accredited remote support experts to resolve days out of the problem resolution process. maintenance issues, accelerating service resolution times and improving field technician mentoring ZIEGLER CAT programs. Ziegler CAT, a Caterpillar equipment dealership, “Video collaboration in the field has a strong offers its customers innovative machinery and impact on the level of service we can provide on-location support services. It recently introduced our customers. We were able to improve firstthe Ziegler Onsight service to diagnose and time resolution rates for service calls, as well as inspect equipment remotely—not easily done on a decrease the time our experts spend in the field construction site or in a farmer’s field. mentoring new technicians, by 33 percent,” shares “We needed high call reliability from low Steve Wagner, Diebold Nixdorf customer support bandwidth environments, support for existing manager. Diebold Nixdorf was recognized for service workflows, an interactive experience and this initiative by Frost & Sullivan with the 2016 security,” explains Todd Hesse, product manager Manufacturing Leadership Award. for precision ag technologies at Ziegler CAT. With this launch, Ziegler technicians and customers can remotely troubleshoot complex equipment issues, increase accuracy of replacement FOR MORE INFORMATION: parts, diagnose application synchronization issues and perform preventive maintenance. www.librestream.com

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SDCExec.com | September 2016 | SUPPLY & DEMAND CHAIN EXECUTIVE

9/2/16 8:43 AM

WORK HARD, By Ronnie Garrett

BICYCLING MEANS

hen Mike Glauser goes for a spin on his Fazzari performance bicycle, it is more than just a joyride. Bicycling means business to this committed cyclist who spent 45 days shifting gears as he moved from entrepreneur and management professor to author in a 4,000-mile cross-country cycling expedition that taught him being in business is a lot like bicycling—you can always vary your speed, change your direction and control your destination. The executive director of the Jeffrey D. Clark Center for Entrepreneurship began his journey before any rubber met the road when an Oxford University study revealed that 47 percent of jobs across 702 occupations will become obsolete over the next decade. Why? In a word, automation, says the 60-year-old businessman who has launched six companies. “Anything that can be automated will be automated,” he says. In supply chain and logistics, this will become increasingly acute as delivery drones, e-commerce, robotics and driverless vehicles become the norm. 50

“There will be great jobs for people in software engineering, hardware and app development, Big Data analytics and robotics, but those new jobs are not going to fully replace the ones lost in manufacturing and logistics,” he says. “More and more of us are going to have to take responsibility for creating our own livelihoods.”

“Life is short. Don’t wait to pursue a dream.” MIKE GLAUSER, AUTHOR OF MAIN STREET ENTREPRENEUR With this knowledge in hand, the Utah State University business professor decided to embark on a quest that combined his passion for pedaling with his interest in career changes. The culmination of his efforts is the Main Street Project, which seeks to answer the question: “How do I create a job?” and provide dissatisfied and displaced workers with a roadmap to entrepreneurial alternatives. Glauser whizzed across America on the Trans-America Trail to interview successful small-town entrepreneurs

Businessman Mike Glauser goes on 4,000-mile quest to discover the keys to successful startups. and learn how they made a living by following their passions within the communities they loved. He discovered that “just about anybody can start and build a business,” and that most entrepreneurs share some common characteristics. For example, not one of the business owners Glauser met mentioned money as the key motivator for starting their businesses. Rather, they set out to do something they enjoyed in a community they loved. They built their businesses on something they really knew well. These entrepreneurs also had a brain trust to turn to for advice, were masters at maximizing resources and had multiple streams of revenue. Glauser describes his findings as a return to a hundred years ago, before the American dream consisted of a climb up the corporate ladder. In the old days, he says, people found a niche in their communities and charted their own course to fill the gap. He shares these insights in “Main Street Entrepreneur: Build Your Dream Company Doing What You Love Where You Live.” And he offers others a single piece of unsolicited advance: “Life is short. Don’t wait to pursue a dream. Plan it into your life ... and make sure you do it.”

SUPPLY & DEMAND CHAIN EXECUTIVE | September 2016 | SDCExec.com

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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 32.0

The Global Enabled Supply and Demand Chain Map VERSION 32.0

(This map replaces Version 31. 0 from the March 2016 issue.)

SUPPLY CHAIN INTEGRATION & TECHNOLOGY INFRASTRUCTURE (Lean Manufacturing, Manufacturing Resource Planning, Just-in-Time/Sequence Planning, Collaborative Production Management) • Automatic Identification & Data Capture, including Radio Frequency Identification (RFID) & Voice • Automation (NEW) • B2B Connectivity Standards & Integration Planning • Bring Your Own Device (BYOD) • 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

• Internet of Things (IoT) • Inventory Optimization ( NEW) • Network Infrastructure, & Enterprise Data Management & Data Synchronization • Network Optimization (NEW) • Predictive Analytics • Real-Time Freight Contract, Bid and Tender Automation • Regulatory & Customer Mandate Compliance & Governance Issues • Security • Solutions Portfolio Management: On-Premise/ Cloud-Based/Software-as-a-Service (SaaS)/ On-Demand/Hosted Applications • Warehouse Management Systems (WMS) • Wireless Applications & Devices

SUPPLY CHAIN INTEGRATION & TECHNOLOGY INFRASTRUCTURE ENABLERS CT Logistics Iptor Supply Chain Systems (formerly IBS)

KPMG Spectrum LeanLogistics Librestream Technologies Inc.

Numerex Corporation OpenLink riskmethods

PROCUREMENT (DIRECT, INDIRECT & SERVICES) • • • • • • • • • • • •

Automation (NEW) Benchmarking & Metrics Content Management Contingent & Temporary Labor Services Management Enterprise Supplier Collaboration Employee Business Services Management (including Travel & Entertainment) Financial Fraud Group Purchasing Organizations & Solutions Hedging Strategies Marketplaces Negotiations & Contract Management Network Optimization

• New Laws & Regulations • Product Cost Management • Purchase Order & Requisition Management • Supplier Enablement & Supplier Information Management • Supplier Performance Measurement & Monitoring PROCUREMENT ENABLERS • Supplier Relationship Management & Supplier Anaplan KPMG Spectrum Development CT Logistics LeanLogistics • Supplier Risk Management Iptor Supply Chain OpenLink • Sustainable & Green Systems (formerly IBS) riskmethods Supply Management JVKellyGroup Inc. • Value-Focused Supply Management • Working Capital Management (NEW)

SOURCING • • • • • • • • • • •

• O utsourced Manufacturing, & Offshore/Nearshore/Reshore/ Auctions Onshore Strategies Automation (NEW) • Spend Analytics, Product Cost Management & Supply Category Management Strategy Commodity Team & Supplier • Sustainable & Green Supply Collaboration Management Compliance • Supplier Relationship Content Management Management Financial Fraud • Tail Spend Management Governance • Total Cost of Ownership Market Analytics • Trading Exchanges New Laws & Regulations (Public & Private) Sourcing Business Models (NEW) • Total Cost Analysis

SOURCING ENABLERS Anaplan CT Logistics JVKellyGroup Inc. KPMG Spectrum OpenLink

ORDER/DEMAND CAPTURE • • • • • • • • • •

Automation (NEW) Benchmarking & Metrics Capacity Planning Demand Planning & Forecasting Demand Sensing & Shaping e-Request for Information/ Proposal (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, & Sales, Inventory & Operations Planning • Supply & Demand Chain Network Design • Supply Chain & Production Planning • Supply Chain Coordination & Event Management

PRODUCT LIFECYCLE MANAGEMENT • • • • • • • • • • •

Collaborative Design Design for Supply Chain Design for Sustainability & Environment New Laws & Regulations New Product Introduction PRODUCT LIFECYCLE Outsourced Design Services MANAGEMENT ENABLERS Product Data Management Anaplan Product Portfolio Management JVKellyGroup Inc. Request for Information Logility Reverse Logistics Sustainable Packaging

ORDER/DEMAND CAPTURE ENABLERS Anaplan Iptor Supply Chain Systems (formerly IBS) LeanLogistics

Logility Numerex Corporation

CUSTOMER RELATIONSHIP MANAGEMENT • Channel Management & Customer Analytics • Contest Management • Field Service & Service Parts Logistics • Mobile Sales Solutions • Reverse Logistics & Material, & Merchandise Returns • Sales Force Automation • Trade Promotion Management • Warranty Chain Management

Procurement Fulfillment

Sourcing

Order/Demand Capture

Service

Supply Chain Integration & Technology Infrastructure

n t ee en Gr ipm e& u bl Eq na & ai y st log Su no ch Te

Logistics

ym Pa g

Education

ultin

Management

s Con

t en m ge a an M le yc c ife Customer tL c u od Relationship r P

SUSTAINABLE TECHNOLOGY CONTINUING EDUCATION UNITS (CEUS) • • • •

Accreditation Associations Certification Universities

CONTINUING EDUCATION UNIT ENABLERS LeanLogistics

CONSULTING CONSULTING ENABLERS Anaplan CompetiBid CT Logistics LeanLogistics Numerex Corporation OpenLink

• Alternative Fuel Forklift Trucks • Alternative Fuel Trac • Automatic Motion O Off Control Lighting • Automation • Energy-Efficient Equ • Heating, Ventilation Air Conditioning (HV Energy Star Equipm • LED Lights • (LEED)/Green Buildin • Low-Capacity/Autom Bathroom Fixtures

FULFILLMENT/LOGISTICS • • • • • • • • • • • • • • • • • • • •

Automation (NEW) Benchmarking & Metrics CO2 Tracking & Management Customized Build & Assemble Cybersecurity Dashboards Descriptive & Prescriptive Analytics (NEW) Distribution Planning & Distribution Requirements Planning Energy/Sustainability Assessment Financial Fraud Global Trade Management Inventory Management & Optimization Labor Management Systems (NEW) Lean Six Sigma Logistics Resource Management Manufacturing Execution Systems Material Handling Equipment & Services Modeling Simulation Order Management Inputs Order & Delivery Management

SERVICE SUPPLY CHAIN • Service Analytics, Planning & Optimization • Service Financial Management

PAYMENT • • • • • •

Automation (NEW) Collaborative Cash Flow Management e-Credit e-Money Electronic Bill Presentment & e-Invoicing Electronic Funds Transfer & All Forms of e-Payment • Financial Fraud

uipment n and VAC) ment

ngs matic

• Service Operations across Aftermarket Service Supply Chain Areas: Asset Management, Spare Parts, Field Services, Warranty, Service Management, Repairs & Returns

• Financial Supply Chain Management • Financial Transaction Management (All Request-to-Check Processes) • Freight Audit & Payment Services • Global Trade Finance • Letters of Credit • PayPal & Bitcoin • Purchasing Cards • Spend Data Management

DECISION SUPPORT

E AND GREEN Y AND EQUIPMENT (NEW)

ctors On/ g

• Outsourcing Services • Predictive Analytics • 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 • Voice-Driven Solutions • Warehouse Control Systems • Warehouse Execution Systems (NEW) • Warehouse Management Services & Systems • Workforce Management • Workforce Training

• Routing Optimization Software • SmartWay Transportation Carrier Designation • Solar/Wind Power • Transportation Mode Shift due to Order/ Load Optimization Software • Wastewater Reclamation

SUSTAINABLE & GREEN TECHNOLOGY & EQUIPMENT ENABLERS Anaplan

• Benchmarking & Metrics • Business Process & Performance Management; & Revenue, Price & Profit Management Automation • Dashboards • Inter-Enterprise & CrossFunctional Collaboration; Change Management; Staffing & Incentive Management; Supply Chain Skills Management & Education; Professional Development • Information Sharing & Analysis; Knowledge Management & Enterprise Business Intelligence

FULFILLMENT/ LOGISTICS ENABLERS Anaplan CT Logistics Iptor Supply Chain Systems (formerly IBS) Logility OpenLink Numerex Corporation Old Dominion Freight Line Inc. riskmethods

SERVICE ENABLERS Anaplan CompetiBid CT Logistics Logility

PAYMENT ENABLERS CT Logistics Logility OpenLink UPS Capital®

• Market Intelligence & Predictive Analytics • Regulatory & Customer Mandate Compliance; Governance Issues; Supply Change Risk Management; Supply Chain Relationship Management • Relational Contracting (NEW) • Research, Advisory & Consulting • Six Sigma, Quality & Lean Six Sigma

DECISION SUPPORT ENABLERS CT Logistics Iptor Supply Chain Systems (formerly IBS) KPMG Spectrum UPS Capital®

INDEX OF ADVERTISERS Anaplan . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Iptor, formerly IBS . . . . . . . . . . . . . . . . . . 11

www.anaplan.com Kaushal Dave (415) 742-8199 kaushal.dave@anaplan.com Anaplan delivers a single, cloud-based environment for realtime planning across the supply chain, empowering planners to quickly adjust planning models to match changing business needs. Learn more at www.anaplan.com/smartsupplychain.

www.iptor.com Jeremy Mattsen (262) 510-0800 jeremy.mattsen@iptor.com IBS is now Iptor Supply Chain Systems. Iptor helps distributionfocused organizations solve their most complex supply chain challenges through connected, intuitive and adaptable cloudbased software, support and managed services offerings.

CompetiBid. . . . . . . . . . . . . . . . . . . . . . . 37

JVKellyGroup Inc.. . . . . . . . . . . . . . . . . 44

www.competibid.com Lauren Kern (314) 591-5678 lkern@competibid.com

www.jvkg.com Aldo Forlini (631) 427-2888, ext. 40 aforlini@jvkg.com

CT Logistics. . . . . . . . . . . . . . . . . . . . . . . . 9

KPMG Spectrum. . . . . . . . . . . . . . . . . . . . 2

www.ctlogistics.com Ron Dodig (216) 267-2000, ext. 2190 sales@ctlogistics.com CT Logistics is a software and services provider of supply chain cost reduction solutions that include freight invoice validation and payment, shipment execution, bid management and transportation management system (TMS) software, as well as professional services for consulting, business analytics and intelligence, and optimization.

www.kpmgspectrum.com/thirdparty7 Brian Donnelly (212) 872-6215 bjdonnelly@kpmg.com KPMG Spectrum offers intelligence engines that embed the firm’s advanced technologies, global scope and intellectual property in nimble new offerings unique to the marketplace. Intelligence engines combine human expertise with the power of technology to deliver action through intelligence, resulting in informed strategic execution in the face of complex business challenges.

Emirates SkyCargo . . . . . . . . . . . . . . . . 52 www.skycargo.com From Emirates SkyCargo’s location at the crossroads of Europe, Africa and Asia—you can reach more than 1.5 billion customers in less than eight hours with multiple destinations and a young, able-bodied fleet.

LeanLogistics . . . . . . . . . . . . . . 29, 46, 47 www.leanlogistics.com Tom S. Looms (616) 796-7631 tom.looms@leanlogistics.com LeanLogistics, a Kewill company, provides solutions to streamline supply chain networks with transportation management system applications and services. The LeanLogistics Transportation Network is one of the largest on the market, providing customers actionable intelligence to make better business decisions.

INDEX OF ADVERTISERS Librestream Technologies Inc.. . 48, 49

OpenLink. . . . . . . . . . . . . . . . . . . . . . . . . 23

www.librestream.com Kate Okany (204) 487-0612, ext. 206 kate.okany@librestream.com Librestream brings the eyes and ears of experts into the field virtually to inspect, diagnose and resolve issues immediately. With the Onsight mobile video platform, teams can even share live visuals from external devices.

www.openlink.com Anne Broderick (877) 401-OPEN info@openlink.com OpenLink is the leader in trading and risk management software, providing a solution for managing commodity procurement and treasury on a single platform, serving 600 clients including 12 of the largest commodity and energy companies, and nine of the largest financial institutions.

Logility . . . . . . . . . . . . . . . . . . . . . . . . . . , 13 www.logility.com Lee White (800) 762-5207 info@logility.com

Numerex Corporation. . . . . . . . . . . . . . 35 www.numerex.com David Reid (770) 485-2573 dreid@numerex.com Numerex simplifies machine-to-machine (M2M) communication, 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.

Old Dominion Freight Line Inc.. . . 16, 17 www.odfl.com (800) 235-5569 customer.service@odfl.com 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.

riskmethods . . . . . . . . . . . . . . . . . . . . . . 43 www.riskmethods.net Ali Jawin (917) 763-5438 ali.jawin@riskmethods.net

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.