Global Supply Chain Solutions Covering Procurement, Risk, the IoT and More
DECEMBER 2020
SUSTAINABILITY,
RISK & COMPLIANCE
Here’s how companies incorporate sustainable practices into their strategies.
SUSTAINABLE WAREHOUSING Top 11 opportunities to own the
future of sustainable warehousing.
FUTURE OF PROCUREMENT How green procurement
drives sustainability.
CRYPTOCURRENCY INUsing A PANDEMIC digital assets to vet
vaccines and more.
INSIDE: 2020 Green Supply Chain Award Winners Fresh new content daily at www.SDCEXEC.COM
SDC1220_01_Cover_converted.indd 1
11/23/20 1:53 PM
20_01_CoverFlap.indd 2
2020
13 th Annual
The following are select companies recognized by this year’s award who make sustainability a core part of their supply chain strategy and achieve measurable goals within their operations. Go to to Page 20 to read about the practical steps companies are taking—and other companies can take —to green their supply chains.
11/23/20 3:
BONUS PULLOUT: GLOBAL ENABLED SUPPLY & DEMAND CHAIN MAP, VERSION 31
Global Supply Chain Solutions Covering Procurement, Risk, the IoT and More
DECEMBER 2020
SUSTAINABILITY,
RISK & COMPLIANCE
Here’s how companies incorporate sustainable practices into their strategies.
SUSTAINABLE WAREHOUSING Top 11 opportunities to own the
future of sustainable warehousing.
FUTURE OF PROCUREMENT How green procurement
drives sustainability.
CRYPTOCURRENCY INUsing A PANDEMIC digital assets to vet
vaccines and more.
INSIDE: 2020 Green Supply Chain Award Winners Fresh new content daily at www.SDCEXEC.COM
SDC1220_01_Cover_converted.indd 1
11/23/20 1:53 PM
DO WONDERS FOR THE ENVIRONMENT. AND YOUR BOTTOM LINE. People are having more goods delivered, faster, than ever before. Which means your fleet is generating more emissions than ever before. What if you could cut your fleet’s carbon footprint to zero and save money doing it?
www.CleanEnergyFuels.com
SDC1220_02-03_TOC.indd 2
11/23/20 3:18 PM
December 2020 | Volume 21 | Issue 4
CONTENTS SPECIAL REPORTS
10
28 EMERGING
TECHNOLOGY The State of Wireless Asset Tracking in the Supply Chain Industry
Deeyook details the challenges wireless asset tracking faces in the supply chain, and why the industry will continue to embrace it come 2021.
30
FEATURES
10 COVER STORY
The Supply Chain’s Responsibility in Sustainability
Here’s how sustainable practices help companies’ bottom lines.
30
SDCEXEC.COM
Proxima outlines why green procurement plays an essential role in driving sustainability.
11 Opportunities to Own the Future of Sustainable Warehousing CRB talks about designing warehouses that are part of a resilient, energyefficient, safe and optimized enterprise ecosystem.
38 SOFTWARE
& TECH The Future of Cryptocurrency Cryptocurrency aids in authentication practices. Here’s how.
40 PROFESSIONAL
DEVELOPMENT COVID-19’s Role G reen in the Future EXECUTIVE FOCUS Supply Chain of Succession The winners of this 32 TRANSPORTATION Planning year’s award continue to 4 Ways to Fight Here’s how COVID-19 put sustainability at the Shipping Fraud impacts the way comforefront. While Reducing panies hire from within Operational their organizations. Overhead
20 AWARD
36
PROCUREMENT The Future of Green Procurement and its Role in Sustainability Initiatives
36 WAREHOUSING
ataVisor explains how D advanced technologies can help logistics and delivery companies detect fraud attempts early in the process.
20
COLUMNS
04 EXECUTIVE MEMO 06 CHAIN REACTIONS
Exclusive online features and solutions for successful supply chain operations
Register for SDCE’s Supply Chain Network Virtual Summit
Supply & Demand Chain Executive Celebrates 20-Year Anniversary
www.sdcexec.com/scn-summit
www.sdcexec.com/20-year-anniversary
Learn. Innovate. News. Knowledge. The L.I.N.K. to Global Supply Chain Intelligence www.sdcexec.com/podcast
SDC1220_02-03_TOC.indd 3
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
3
11/24/20 8:06 AM
EXECUTIVE MEMO By Marina Mayer Editor-in-Chief mmayer@ACBusinessMedia.com
SUPPLY CHAINS
CONTINUE TO WIN IN
2
020 has sure been quite the year. Who knew that when I took over Supply & Demand Chain Executive in February that we would be on the cusp of a global pandemic. But, it’s this pandemic that has upended supply chains, fast-tracked deployment of technology and solutions and forced companies to re-evaluate how they move product through the supply chain yet still keep people, product and sustainability top of mind. This pandemic created a “New Normal” of virtual conferences, tradeshows, zoom calls and e-learning. It allowed us to peek into our coworkers’ dining rooms, kitchens and garages, get to know their kids, their pets and their significant others, and oh my goodness, the quarantine hair! This pandemic has pushed everyone in every facet of every company to do things differently. Supply chains pivoted, optimized and automated. They revised their procurement and sourcing procedures, implemented robotics, artificial intelligence and other emerging technologies and innovated in ways never imagined possible. While these supply chains continue to be tested, they also continue to win. 4
2020 This pandemic made our nation’s “essential workers” even more essential. From those working the loading docks, to those stocking retail shelves and driving the trucks, to the software developers, automakers and solutions providers, to the mask makers and the game changers, THANK YOU. The Coronavirus disease (COVID-19) brought the term supply chain to the forefront, making it a more appealing major for college students, as well as the place to be employed for young professionals. SDCE is no different. When the industry stepped into overdrive, we did too,
Published by AC Business Media 201 N. Main Street, 5th Floor, Fort Atkinson, WI 53538 (800) 538-5544 • www.ACBusinessMedia.com
www.SDCExec.com PRINT AND DIGITAL STAFF GROUP PUBLISHER Jason DeSarle SALES ASSOCIATE Brian Hines EDITORINCHIEF Marina Mayer ASSOCIATE EDITOR Brielle Jaekel ASSISTANT EDITOR Mackenna Moralez SENIOR PRODUCTION MANAGER Cindy Rusch ART DIRECTOR Willard Kill AUDIENCE DEVELOPMENT MANAGER Angela Franks ADVERTISING SALES (800) 538-5544 JASON DeSARLE jdesarle@ACBusinessMedia.com BRIAN HINES bhines@ACBusinessMedia.com MELANIE GARCIA mgarcia@ACBusinessMedia.com CIRCULATION & SUBSCRIPTIONS P.O. Box 3605, Northbrook, IL 60065-3605 (877) 201-3915, Fax: (847) 291-4816 Email: circ.sdcexec@omeda.com LIST RENTAL Bart Piccirillo, Sr. Account Manager Data Axle Phone: (518) 339 4511, E-mail: bart.piccirillo@infogroup.com REPRINT SERVICES BRIAN HINES, (647)296-5014 bhines@ACBusinessMedia.com AC BUSINESS MEDIA CHIEF EXECUTIVE OFFICER Barry Lovette CHIEF FINANCIAL OFFICER JoAnn Breuchel CHIEF DIGITAL OFFICER Kris Heineman CHIEF REVENUE OFFICER Amy Schwandt VP AUDIENCE DEVELOPMENT Ronda Hughes DIRECTOR OF DIGITAL OPERATIONS & IT Nick Raether DIRECTOR OF DIGITAL STRATEGY Joel Franke GROUP CONTENT DIRECTOR Jon Minnick Published and copyrighted 2020 by AC Business Media 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 four times a year: April, June, September and December by AC Business Media, 201 N. Main Street, 5th Floor, Fort Atkinson, WI 53538. 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. The information presented in this edition of Supply & Demand Chain Executive is believed to be accurate. The publisher cannot assume responsibility for the validity of claims or performances of items appearing in editorial presentations or advertisements in the publication. December 2020 / Volume 21 / Issue 4
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_04-05_ExecMemo.indd 4
11/24/20 8:22 AM
8
ks
om
com
a Axle)
her
d. No part ny means, tion stor-
print) and eptember Atkinson, & Demand the USA. charge in r reserves nqualified countries (prepaid
so that we could continue sharing the industry’s messaging, challenges and solutions; to help facilitate a voice alongside industry organizations for those in need; and to create and deliver innovative occasions for those in the industry to connect, network, share and problem solve. That’s why we made the exciting decision to make this issue our final print issue. The decision to eliminate the print component of our brand was not an easy one, but doing so allows us to better focus on our many digital properties. For instance, will be launching new virtual solutions that serves our audience of 500,000plus supply chain professionals. We will continue to deliver quality content, news, videos and properties, just in a digital-only platform. With that, go to supplychainnetworkmediakit.com and download our new editorial calendars covering everything from 3D printing and e-fulfillment to offshoring, employee retention, pharmaceutical supply chains, worker safety, reverse logistics, air cargo and more. Register for SCN Summit, a premier virtual event that delivers fireside chat discussions and presentations from industry experts on everything from supply chain threats and robotics in the retail landscape, to workforce development, warehouse automation and more. Go to sdcexec.com/scn-summit to learn more. Be sure to tune in to L.I.N.K. Live every Wednesday at 11 a.m. CST, where we conduct weekly conversations with industry
experts discussing hot-button issues impacting the supply chain such as supply chain disruptions, diversity and inclusion in the workplace, driver shortage and more. Be sure to also download our L.I.N.K. podcasts from https://cms. megaphone.fm/channel/supplychain to hear more about mental health in the supply chain, offshoring vs. nearshoring, warehousing woes and more. 2020 was also SDCE’s 20year Anniversary, which saw an abundance of digital-only coverage, from revisiting former Pros to Know to chatting with supply chain professionals via L.I.N.K. Educate to detailing the history of the supply chain and uncovering what’s in store for the future. Check it all out at sdcexec.com/20-year-anniversary. SDCE also launched our Women in Supply Chain award, which honors female supply chain leaders and executives whose accomplishments, mentorship and examples set a foundation for women in all levels of a company’s supply chain network. This award was BEYOND successful, and the praise, recognition
and support from the industry has been both touching and reassuring that an award like this—celebrating women in the supply chain—was both necessary and long overdue. Be sure to check out video interviews with some of these rock star women at sdcexec.com/videos. As we all know, change is inevitable, and this change will enable us to continue engaging with our audience. While 2020 has sure left a bad taste in everyone’s mouth, I commend and applaud the supply chain and logistics industry. At a time laden with a host of supply chain disruptions brought on by COVID-19, natural disasters and civil unrest, this industry formed a united front for the common good of people—to produce and deliver product in the safest, quickest, most energy efficient manner possible. Thank you for your support, engagement, participation, inspiration and enthusiasm. And, thank you for allowing SDCE to be your go-to publication for all things supply chain. Let’s keep winning—together.
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
SDC1220_04-05_ExecMemo.indd 5
5
11/23/20 3:27 PM
CHAIN REACTIONS
NEWS FROM ACROSS THE DIGITAL SUPPLY CHAIN
BABY BOOMERS WILL CONTINUE SHOPPING ONLINE POST-PANDEMIC,
RESULTING IN SIGNIFICANT OPPORTUNITY FOR RETAILERS
The Coronavirus disease (COVID-19) pandemic has caused shopping behaviors and consumer expectations to shift rapidly, and many of those behaviors are here to stay, says a study by LaserShip. Key insights from the study include: Baby Boomers are embracing e-commerce. Baby Boomers, historically more hesitant to shop online, were forced to adapt their behaviors when COVID-19 hit because they weren’t comfortable shopping in stores. The study found this behavior will continue, with nearly half (47%) of Baby Boomers planning to increase their online shopping after the pandemic. Shipping costs still influence shopping decisions. Low-cost or free shipping remains the most important consideration for consumers when shopping online. Despite the increase in online purchases during COVID-19, 26% of surveyed consumers cite expensive shipping as one of the main reasons to not shop more online. Also, 19% of consumers stop shopping at an online retailer due to expensive shipping costs. The continued need for speed. Gen Z and Millennials have come of age in the digital era and are accustomed to speed and convenience as part of their daily lives. Younger generations are more likely to shop at new retailers if faster delivery is provided when compared to older generations. Forty percent of Gen Z consumers and 37% of Millennials surveyed would increase their probability of shopping at a new retailer if they offered next-day delivery service at an additional cost, a stark contrast to their parents and older generations.
6
ECOVADIS’ CARBON SOLUTION HELPS REDUCE EMISSIONS EcoVadis is launching a first-of-its-kind Carbon Action Module that’s designed to reduce emissions across the supply chain and enable organizations to step up their fight against climate change. “The climate crisis demands that we take urgent action to combat the impact of carbon emissions,” says Pierre-Francois Thaler, co-CEO of EcoVadis. “The greatest opportunity for creating real change is through supply chain action. Our vision is to provide organizations, particularly small and medium-sized enterprises, with the tools and know-how needed to address their own carbon footprint reductions, and in turn, to engage their suppliers to do the same.” Carbon Ratings and Scorecards rate suppliers based on carbon and GHG emissions performance and help prioritize the suppliers that will make the biggest impact based on carbon and GHG emission reduction potential. A precursor of the carbon scorecard, dubbed the “carbon maturity assessment KPI bundle,” is already being deployed by EcoVadis pioneer customers. Based on data in EcoVadis’ existing sustainability scorecards, this KPI bundle enables buyers to baseline supplier GHG and carbon management systems and provides guidance for performance improvement. A Carbon Calculator enables assessed organizations to measure both their indirect and upstream carbon and GHG footprint. Enhanced CSR Metrics expand the data collection tools required to capture the depth and breadth needed for the Carbon Action Module.
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_06-09_ChainReactions.indd 6
11/23/20 3:45 PM
NETSUITE ANNOUNCES PRODUCT UPDATES FOR SUPPLY CHAIN AND OPERATIONS PROFESSIONALS To help small and mid-sized organizations across industries adapt to change and build for the future, Oracle NetSuite announced a series of new innovations within the NetSuite platform. The latest updates help organizations streamline and enhance financial, supply chain and operational management, while improving the employee and customer experience. “It’s been an overwhelming year of change, and businesses have been forced to build for a new reality,” says Evan Goldberg, executive vice president of Oracle NetSuite. “To help our customers navigate all of this change, we have introduced new innovations across the entire suite, from finance and ecommerce to HR and operations, to reduce IT complexity, streamline business processes, improve decision making and enhance the customer and employee experience. The latest updates will help our customers gain real-time visibility into their entire business, so that they have the agility and control required to successfully build for what’s next.” The latest innovations within NetSuite include updates to help finance and accounting, supply chain and operations, sales and marketing, HR, project management and IT professionals.
GROUPE.IO ROLLS OUT NEW PROCESS AUTOMATION CAPABILITIES Groupe.io rolled out process automation capabilities to help organizations improve operational efficiency and compliance. Designed for businesses that rely on deskless workers for their daily operations, these new advanced workflow features enable businesses to rapidly digitize and automate routine tasks and approvals, providing a seamless experience for frontline employees. Groupe.io helps non-desk teams improve productivity and stay connected wherever they are, on any device. Key features include: • Operationalize back-to-work processes and automate any repetitive or manual tasks with predictable and consistent outcomes. • Convert paper forms to digital forms (e.g. onboarding documents, work orders, invoices, etc.), easily capture information from any device and assign colleagues or supervisors who need to approve them. • Real-time visibility for operational leaders to track non-compliance and make data-driven decisions based on historical data.
SDC1220_06-09_ChainReactions.indd 7
• S upport for digital signatures, offline data and barcode scanners. • A drag-and-drop form editor, which allows employees to generate digital forms without writing any code, while a visual process designer helps design multi-step business processes.
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
7
11/23/20 3:45 PM
CHAIN REACTIONS SOFTEON ENHANCES FULFILLMENT SOLUTION SUITE FOR DIRECT-TOCONSUMER STRATEGIES Softeon enhanced its set of software solutions to empower and optimize direct-toconsumer strategies in retail, consumer goods manufacturing and beyond. Softeon’s broad solution suite delivers the capabilities retailers, brand companies and third-party logistics firms need to delight customers, manage e-fulfillment profitably and achieve direct-to-consumer fulfillment.
NEWS FROM ACROSS THE DIGITAL SUPPLY CHAIN
SEAGULL SCIENTIFIC INTRODUCES NEW DOCUMENT WORKFLOW
MANAGEMENT AND MOBILE PRINTING FEATURES
Seagull Scientific Inc. introduced BarTender 2021, the latest version of its enterprise labeling and barcode software. BarTender 2021 features fast, secure internet printing and workflow approval, increased label QA and accountability with new, visual-interface Workflow Designer, improved business continuity and disaster recovery, native integration with business systems and commercial-quality label design. “BarTender 2021 includes a comprehensive set of new features we’ve designed specifically to help organizations meet the challenges of today’s rapidly shifting business climate on a global scale,” says Harold Boe, president and CEO of Seagull Scientific. “Secure, centralized control of remote label printing from any internet-connected device and comprehensive, intuitive workflow management enable companies to thrive in the ‘New Normal’ and beyond.”
2020 HOLIDAY SHOPPING PUTS SAFETY FIRST
WITH EARLY START TO SEASON The 2020 holiday season will be shaped by changes to the shopper experience as a result of the COVID-19 pandemic. Topping the list of fundamental holiday shopping trends are an explosion in e-commerce sales; an early start to a longer shopping season to reduce crowds; greater use of curbside pickup and enhanced safety protocols at physical locations, according to a new report from CBRE. CBRE’s annual Holiday Trends Guide highlights trends in both retailing and consumer shopping, as well as the impact
8
of those shifts on the U.S. commercial real estate retail market. “Retail hasn’t grappled with anything like the challenges it faces this year, and the holiday retail season will be affected as retailers adjust to changing shopping behaviors,” says John Morris, CBRE retail leader. “We will see modest growth this holiday season, as brick-and-mortar sales will be challenged and overall consumer confidence is tepid. However, e-commerce sales will hit new highs in 2020.”
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_06-09_ChainReactions.indd 8
11/23/20 3:45 PM
ns
d
ce
RAYMOND HANDLING SOLUTIONS HELPS ELEVATE WORKPLACE SAFETY WITH COVID-19 DETECTION AND SCREENING TECHNOLOGIES Raymond Handling Solutions partnered with Dahua Technology USA to bring a wide array of “touch-free” symptom detection devices to the marketplace, including solutions to check skin temperature, monitor mask usage and prevent overcapacity of indoor spaces by foot traffic. Among Dahua’s systems now available are Wi-Fi-enabled thermal imaging, face covering detection and digital signage hardware, all designed to support social distancing, perform on-the-fly temperature checks and maintain the safe movement of employees. To monitor entry points of a facility, Dahua’s Thermal Temperature Monitoring station provides “on-the-fly” skin temperature datagathering with a Thermal Hybrid Network Camera, Human Temperament Measurement Blackbody to ensure calibration and an optional Full (HD) High Definition Monitor. Skin temperature can be captured from up to 15 feet away and in just 0.2 seconds with accuracy of roughly half-a-degree Fahrenheit. Dahua also offers a Handheld Thermal Temperature Monitoring Device, which houses a 3.5mm camera powered by a lithiumion battery. Artificial intelligence software calibrates temperature to just under onedegree accuracy. Results that exceed userdefined thresholds trigger an alarm. Discreet temperature monitoring of personnel or visitors without operator involvement can be accomplished with the Dahua Thermal Temperature Station, which can be mounted at entrances where interpersonal surveillance is impractical.
SDC1220_06-09_ChainReactions.indd 9
COVER GENIUS, DESCARTES TO OFFER E-COMMERCE SHIPPING INSURANCE SOLUTIONS Cover Genius partnered with Descartes Systems Group to provide Cover Genius’ e-commerce shipping insurance solutions for Descartes ShipRush solution customers in the United States. Through this relationship, XCover, Cover Genius’ global insurance distribution platform, will be integrated with the Descartes ShipRush e-commerce shipping solution to provide a comprehensive, customer-centric insurance solution that includes protection for the full order value of items shipped rather than just the declared value and coverages for electronics, second-hand goods and more. XCover’s instant claims capability also removes the need for documents like proof of sale, wholesale invoices and statutory declarations. Cover Genius’ insurance licenses and claims authority means that there’s no minimum mandatory wait times on claims nor any requirement to “sit behind” existing cumbersome claims processes. Descartes ShipRush customers can make claims and receive instantaneous reimbursement for return shipping and re-shipping of items that were damaged, lost or stolen in transit.
GS1 DIGITAL LINK GUIDELINE HELPS RETAILERS PROVIDE UPDATED PRODUCT DATA WITH ONE BARCODE SCAN GS1 US’ new guideline helps the retail industry implement GS1 Digital Link, a standard that allows brands to web-enable barcodes and provide consumers with rich product information. With a single scan of a 2D barcode that’s encoded with GS1 Digital Link, consumers can gain access to unlimited and instantly updated brandauthorized content online. GS1 Digital Link leverages GTINs for product identification. Embedding the GTIN in a 2D data carrier using GS1 Digital Link connects the physical product to the web, which eliminates the need for multiple on-pack barcodes.
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
9
11/23/20 3:46 PM
COVER
By Brielle Jaekel, Associate Editor
THE SUPPLY CHAIN’S RESPONSIBILITY IN
SUSTAINABILITY
E
xperts throughout the supply chain stress how the Coronavirus disease (COVID-19) pandemic has fast-tracked numerous emerging trends, one of the most important being sustainability. As more and more executives see the value in endorsing strategies aligned with sustainability, it becomes more prevalent throughout the supply chain. While ethically, many may think it is the right thing to do, monetarily- and resiliency-wise it can be the best decision. The Fourth National Climate Assessment, released in 2019, showed that the U.S. economy is projected to decline 10% by the year 2100 due to effects from climate change. The report also noted that import and export prices for U.S. businesses will see drastic increases. Additionally, consumers drive conversations and interest in sustainability investment in old strategies simply because how it has been done in the past does not necessarily equate for a solid future. Consumer 10
demand pushes new trends, and today, that means sustainable initiatives such as renewable energy, social responsibility and waste reduction. During a previous SCN Summit, hosted by Supply & Demand Chain Executive,,Marisa Brown, senior principal research lead for supply chain management for APQC, explained that as the automobile was making its way onto the roads, many organizations in the transportation industry were investing in the latest and greatest carriage driving whips. Soon, the automobile became the prevailing mode of transportation, and all that investment in the whip was wasted. The same goes today for those who invest in nonsustainable practices. “Brands and manufacturers, now more than ever, are committing to transparency through corporate commitments, science-based targets and transparency on key sustainability issues to their consumers,” says Christy Slay, director of science and research at The Sustainability Consortium (TSC). “Consumers want
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_10-19_Cover.indd 10
11/23/20 4:18 PM
A CIRCULAR ECONOMY
to know not just that the brands they buy products from are working on sustainability; they want to see a commitment and they want an easy way to understand that the product is safe for people and for the planet. Numbers from our latest impact report indicate companies are still struggling with challenges that include measuring and reporting GHG emissions, changing to more sustainably sourced or recycled material in product and packaging design and addressing social responsibility issues like labor rights.” Pressure from regulations and consumer demand may be a source of contention for organizations looking to find an ideal strategy in the drastically different modern landscape in business. Each company must determine which strategy is right for their own operation, despite outside pressures. There are a multitude of ways to introduce a sustainable model in any business.
SDC1220_10-19_Cover.indd 11
One way companies in the supply chain implement sustainability is through a circular model. The concept is to produce zero waste and keep products and packaging in use, leading to a more advanced form of recycling. “The circular economy and reusability is top of mind,” says Jennifer Wong, head of sustainability at Convoy. “Millennials and Generation Z, in particular, are much more sensitive to their carbon footprints, so they will buy from businesses [that] have sustainability programs such as recycling, re-using and compostable materials. This is creating a rising focus on reusable goods, as more and more people are incorporating products [that] can be re-used into their daily lives.” A circular economy in the supply chain is exceptionally important, as it is one of the biggest factors in climate change. “According to the global management consultancy McKinsey, more than 90% of the impacts on the air, soil and land caused by consumer products and more than 80% of a company’s business-consumer greenhouse emissions are due to the supply chain,” says Jeff Pepperworth, president and CEO of iGPS. “This is largely due to the inefficient use of resources and waste products that enter the environment at the end of the supply chain. This is to say, to make a significant impact on these percentages, sustainability is and should be a key part of supply chain planning. The easiest way to begin planning a sustainable supply chain is to take advantage of closedloop models that already exist.”
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
11
11/23/20 4:19 PM
COVER Unfortunately, interest in the circular economy does not necessarily mean implementation. In February, Gartner Inc. released a study that showed 70% of supply chain leaders plan to invest in the circular economy in the following 18 months. However, only 12% of those had linked their digital and circular economy strategies so far. More commonly in place are renewable energy and reduction in energy consumption initiatives.
RENEWABLE ENERGY “A focus on energy iGPS consumption is here to stay. Even pallets are now incorporated into a circular economy. Both businesses and consumers make progress toward sustainability targets. Lift truck are reducing their dependence on fossil fuels, which power sources are an especially favored means to a more are non-renewable sources of energy and the leading sustainable warehouse, as these alternatives can also contributor to climate change,” Wong adds. “Renewable enable business wins such as productivity gains and energy will become more common in the future, and we the opportunity to reduce operational costs on top of are already seeing many industries reducing their energy delivering both performance and sustainability. consumption by moving toward electric vehicles, LED “Lift trucks with advanced power sources such lighting and LEED-certified buildings, which are all as lithium-ion batteries or hydrogen fuel cells seeing a spike in momentum because they change how help operations comply with emissions and health much energy we actually consume.” regulations and make strides toward sustainability The prevailing trend with renewable energy commitments, powering equipment while producing regarding the logistics and supply chain zero harmful emissions,” he says. “These advanced industries is seen most in vehicles. power options have become increasingly practical Whether it be lift trucks in the solutions by offering other advantages that can help warehouse or transportation, operations overcome industry challenges like the hiring, companies are turning to training and retaining a limited labor pool. With fewer lithium batteries and other moving parts, electric options require less maintenance types of electric. and newer electric options like the previously “One of the trends mentioned lithium-ion batteries and hydrogen fuel cells we see today is the shift offer simpler, faster charging than traditional lead acid toward more sustainable batteries. This allows lift truck operators to spend more lift truck power sources,” says time on the task at hand, rather than managing lift Steven LaFevers, vice president, truck power.” emerging technologies, Hyster Company. “According to one report, a full 93% of companies surveyed DIFFERENT ISSUES FOR DIFFERENT SECTORS reported using energy efficiency to While sustainability is an important value throughout meet their goals while 63% cited every sector of business, how it is incorporated varies implementing renewables. Forklifts greatly. The supply chain focuses on electric vehicles are an indispensable and extremely because transportation is a major part of this business, common supply chain tool, so lift but other industries such as apparel might focus more truck power can help operations on human and animal rights issues. 12
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_10-19_Cover.indd 12
11/23/20 4:19 PM
PS
SDC1220_10-19_Cover.indd 13
11/23/20 4:21 PM
COVER
PARTNERSHIPS ARE KEY The accessibility of the sustainable trend is also important, Wong adds. The more accessible and convenient it is to adopt to a sustainable operation, the more common it will become. This can be difficult as the supply chain has become so globalized and stretched, and 14
Nuvera
Ryan Lynch, practice director, sustainability at BSI, says that issues such as these are now so important that these sectors broaden to other sustainabilityfocused concerns and pay acute attention to detail. For instance, the apparel industry branches out to other environmental impacts or hones in on specific issues like the ethical treatment of migrant workers in their sourcing chain. “I see pharma companies starting to pay more attention to water-related issues of their active pharmaceutical ingredient suppliers,” he says. “Hightech and consumer goods are starting to partner with suppliers on embedding circular economy principles into their practices through reducing waste, incorporating compostable or recyclable materials and designing products for improved refurbishment or re-use. The transport and logistic sectors are working toward reducing emissions. “Even the clean energy sector, which has often gotten a pass, has been pressed on human rights impacts and land use and acquisition issues,” he adds. “I also see an increasing focus on companies measuring Scope 3 GHG emissions, much of which is being driven by an increasing number of companies adopting sciencebased targets. Scope 3 covers indirect emissions, many of which are generated throughout their supply chain. Even beyond those Scope 3 accounting efforts, companies are also working to understand how they can engage their suppliers, beyond these accounting efforts, to support suppliers in improving upon their present-day performance.”
Lift trucks are now operated with renewable energy for a more sustainable practice.
companies may not realize they are working with someone that does not have the same values. This is where evaluating partnerships is important, says John Fish, senior vice president of strategic partnerships at Arrive Logistics. “Sustainability is more relevant and critical for initial conversations when evaluating partnerships, especially for larger organizations,” he says. “Today, sustainability practices are one of the first things to come up in conversation vs. 10 years ago, when most of the time, it was an afterthought. “As far as approach, there isn’t one strategy dominating the industry. Every company is taking a different approach, from focusing on reducing overall environmental footprint to investing in technology to improve efficiency. Companies are finding that a commitment to sustainability is good business because consumer buying habits show that they are more brand loyal to brands committed to sustainability. There is brand equity in sustainability, and I expect that to only increase in the next few years.”
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_10-19_Cover.indd 14
11/23/20 4:22 PM
The importance of sustainable practices in partnerships are becoming the new compliance regulators, says Slay. When it comes to procurement and partnership, retailers and CPG brands move faster than government organizations in the implementation of policies. These companies do not do business with partners that could potentially conflict with their own sustainable guidelines.
TECHNOLOGY ASSISTANCE
Nuvera
As consumers push for a sustainable supply chain from start to finish, companies look to technology to assist. While technology adoption has been a top talking point in every aspect of the supply chain for years, it is with good reason. Even with regards to sustainability, technologies like automation are an important part of modernizing. “New technologies have created more opportunities than ever before to visualize and manage complex manufacturing processes, and this includes ways to identify new opportunities to reduce environmental impacts,” says Jon Chorley, chief sustainability officer and group vice president of SCM product strategy, Oracle. “By applying technology such as the Internet of Things (IoT) to collect data from the physical world and by using data analytics to make sense of that data, manufacturers can improve quality, significantly reduce waste and minimize the use of natural resources. They can also lower regulatory compliance risk. All of this leads ultimately to cost savings. “Increased collaboration and trust is another key trend. Today’s pace of business and inter-locking supply chains require secure, real-time collaboration with multiple parties sharing data to address mutual business challenges, including sustainability. Modern supply chains need this unified view of data, while still being able to independently verify their transactions, such as production and transport updates. The ability to track and trace is key to detecting and resolving issues and reducing delays, errors and costs. “All of this helps to establish trust between trading partners, and blockchain is emerging as a key technology to support these requirements,” he continues. “Automation and robotics is also a major trend and will play a significant role in transforming supply chains. Long established in the manufacturing shop floor, automation and robotics is now finding its way into logistics. Organizations are starting
SDC1220_10-19_Cover.indd 15
to use drones and driverless vehicles to streamline transportation, as well as a new class of autonomous mobile robots in their warehouses.” These all help to reduce waste and minimize adverse environmental impacts like greenhouse gas emissions, says Chorley. Together, this combination of emerging technologies (robotics, IoT, artificial intelligence and blockchain) are likely to become more mainstream in supply chains. Additionally, technology is now even an essential part of regulation and compliance. “There is such an enormous range of laws and regulations across countries and communities when it comes to assessing and reporting companies’ environmental footprints, and even among experts there can be widely diverging views on the most appropriate calculations,” says Wong. “Many countries and communities choose to set higher standards for themselves, but a common baseline has to revolve around being transparent about the data and methodology used for any reporting of sustainability metrics. Data transparency allows businesses and consumers to decide what is best for their needs and their values. “One example of data transparency in action is, if we take a look at science-based targets, a joint initiative of CDP, the UN Global Compact, the World Resources Institute and the World Wildlife Fund,” she says. “They have created a framework for addressing climate change. The goal is to enable businesses to set ambitious and meaningful corporate greenhouse gas-reduction targets. By aligning their GHG reduction targets with their fair share of the climate budget, companies demonstrate leadership and responsibility and take ownership in the process.”
PAST AND FUTURE These trends are vastly different than just a few years ago, when sustainable efforts were taken more for show. Today, organizations employ departments specific to developing and maintaining environmentally safe practices, human rights justice and inclusion. “Prior to current corporate trends, embracing sustainability was to many companies and industries a novel supplement to CSR efforts, and was often implemented only if it was easy and inexpensive to do so,” Pepperworth says. “As consumer demand for corporate sustainability has grown and the effects of
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
15
11/23/20 4:23 PM
COVER climate change are seen and felt more vividly across the world, supply chain leaders are looking to incorporate sustainability in their business practices both vertically and horizontally. It is clear that organizations are also increasing their investment in sustainability job roles, or even in the creation of entire departments devoted to green efforts and environmental responsibility. Supply chain companies, especially ones that for years have already embraced sustainable solutions, are now wellpositioned to offer innovative practices to reduce their clients’ carbon footprints.” Beyond the value of sustainability in the supply chain continuing to grow, the way it is implemented has also significantly changed. “In the past, corporate sustainability initiatives have traditionally focused outside the scope of the logistics team, which included things like investments in renewable energy and reductions in excess packaging,” says Wong. “Today, forward-leaning companies have put the supply chain at the center of their carbon reduction efforts. Many businesses are also taking a deeper dive into the supply chain and working with their partners through the value chain from source to shelf. “While many organizations have made progress on reducing Scope 1 and 2 emissions, they haven’t made much progress on reducing Scope 3, which is typically larger than Scopes 1 and 2 combined,” she says. “Forward-thinking companies like Target and Levi Strauss are setting goals for the entire
16
supply chain. For example, Target has set an impressive goal to reduce its absolute Scope 1, 2 and 3 greenhouse gas emissions 30% below 2017 levels by 2030. These goals have also been approved by the Science Based Target initiative (SBTi). Target is one of only a few U.S. retailers to have an SBTi-approved Scope 3 goal, setting a bar for the industry, as Levi Strauss did for the apparel industry with its similarly ambitious goals in 2018.”
ENTER COVID19 Supply chain sustainability changes became more compounded after COVID-19 hit the United States, prompting many to think that maybe it is time to reevaluate their supply chain altogether. “COVID-19 has had an uneven impact on businesses based on the way their particular business model was impacted by the shutdown,” says Chorley. “Still, most companies have experienced some form of supply chain disruption, perhaps dealing with suppliers that are no longer in business or experiencing a sudden drop or spike in demand. The bigger picture however is that COVID-19 has underlined and accelerated trends that were already underway. More consumers are shopping online and relying on logistics and freight solution providers to deliver their products. “There have been renewed discussions on the need to rethink supply chain business models already under stress from geo-political and macro-economic trends, of which sustainability is an important part. COVID-19 has proven the need for an agile and resilient supply chain like never before. It has shown us the need for more transparency throughout the global supply chain, and not just with the supplier, but [also with] the supplier’s supplier and beyond. What was previously ‘on the radar’ is now crystal clear and imminent. “Companies must understand who all their suppliers are,
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_10-19_Cover.indd 16
11/23/20 4:23 PM
where they are located, where they source from, their risk exposure and so on,” Chorley says. “This transparency, key to managing supply risk, is also essential for improvements in sustainability.” COVID-19 also exposed gaps in the supply chain to the everyday consumer, whereas in the past, only industry experts knew of issues in transparency and sustainability. “Broadly speaking, businesses, and the general public for that matter, are more acutely aware of how fragile global supply chains can be, particularly when a buyer hasn’t maintained an active line of sight into how their business partners operate,” says Lynch. “We’re also seeing companies question the benefits and drawbacks of an over-reliance on limited inventory and justin-time production. There’s an understanding that the cashflow benefits come with a level of increased fragility and risk.” “As a result of COVID-19, we witnessed significant disruptions to the global supply chain,” Wong says. “In recent years, there had been a broad effort to focus on building resiliency into the supply chain, but the pandemic showed it was not as resilient as we once thought. This supply chain disruption has also amplified the focus from consumers and businesses to better understand where their products come from. “Yet to achieve true supply chain resiliency, we need to have more transparency far beyond Tier 1 suppliers,” she says. “These suppliers directly supply goods to the company, whereas Tier 2 and Tier 3 suppliers are deeper in the supply chain, supplying goods to other suppliers in the chain. For every supplier in a supply chain, businesses need to know who their suppliers are, where they are located, the risk exposure and where they source from. “There is also a need to refine supplier sourcing. In the past, cost has been the primary criteria for selecting a supplier, but there needs to be a more sophisticated cost/risk model, which factors into transparency. PostCOVID, a business may actually pay more to source from a local supplier to reduce the risk of disruption to their supply chain.” Unfortunately, complications from COVID-19 go beyond gaps and transparency. The lack of the ability for physical interaction has allowed many sustainable regulations to slip through the cracks. “Although companies may be planning for
supply chain disruptions from climate change, almost none were planning for the extent that COVID-19 has caused in daily life around the world,” says Slay. “In addition to supply chain disruptions, lack of regulatory enforcement due to COVID-19 has created a surge of illegal activities such as deforestation and gold mining in the Amazon. Factory workers from Bangladesh textile mills to U.S. slaughter/processing plants have seen illness outbreaks and deaths. The light at the end of the tunnel will be that companies are now planning more resilient strategies and thinking long term about their workers, their supply chains and their operations—the companies that are doing this or have done this are the ones that will survive and the ones that aren’t won’t.” The exposure and complications from COVID-19 are vast, but it still comes with benefits for the future. “The disruption and risks caused by the COVID-19 pandemic present both challenges and opportunities for supply chain sustainability,” says Pepperworth. “Significant resources are required to maintain workers’ and consumers’ health and safety during this crisis, typically in the form of PPE and more stringent sanitization practices. As with any new and unanticipated industry need, some supply chain providers may struggle to balance worker and consumer safety, embracing sustainability and keeping business costs low in an industry with an historically narrow profit margin. Companies who have already spent years developing sanitization and sustainability services can nimbly respond to the crisis with minimal or no disruption to their customers’ supply chain and costs.” Perhaps, the supply chain will rebuild following the pandemic with new strategies in place and sustainability at its core. Now that businesses realize leaning into sustainable practices helps their bottom line and stopping climate change may help their businesses long-term, a complete sustainable supply chain may be coming in the future.
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
SDC1220_10-19_Cover.indd 17
17
11/23/20 4:23 PM
COVER
CONSIDER ENVIRONMENTAL FACTORS IN SOURCING
DECISIONS
To survive and thrive, leading companies are thinking more broadly by considering strategic factors in sourcing decisions and continuing to invest in deeper supplier relationships.
O
ne of the key lessons of 2020 for supply chain leaders is that procurement cannot afford a singular focus on purchasing goods and services at the lowest possible cost. To survive and thrive, leading companies are thinking more broadly by considering strategic factors in sourcing decisions and continuing to invest in deeper supplier relationships. These commitments and investments often cost more money upfront, but pay off in the long run with stronger supply chains that are flexible and more responsive to change. APQC has found that companies that take a more intentional and holistic approach to sourcing—which increasingly includes environmental, social and governance (ESG) considerations—tend to perform better on a range of key procurement measures. Let’s examine the extent to which companies specifically consider environmental factors in sourcing decisions, and discuss how environmental considerations provide opportunities for greater value creation through supplier relationships that drive deeper competitive advantage. For starters, APQC found
18
that slightly more than half of organizations (54%) consider environmental factors to a great extent in sourcing, another 36% consider these factors only to a moderate extent and 10% consider them to little or no extent The 54% of companies who do think more deeply about environmental factors are part of a growing trend, as global bodies and many of the world’s leading companies are trying to make big strides in this area. The United Nations and Dow Jones, for example, are challenging companies to disclose emissions data and align with a set of benchmarks that measure sustainability. In response, procurement teams in many leading companies are setting ambitious goals and tracking suppliers to ensure sustainable
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_10-19_Cover.indd 18
11/23/20 4:24 PM
and environmentally friendly procurement practices. For example, Unilever is building a system for its suppliers to report the carbon footprint of their goods and services to ensure they meet the company’s standards. This system is part of a broader push toward a goal of reaching net-zero emissions from products by 2039. Retailers like Target and Walmart are also monitoring and collaborating with their suppliers with the goal of reducing emissions by 30% by 2030.
SUSTAINABILITY AND SUPPLIER RELATIONSHIP MANAGEMENT Suppliers and supplier relationships are a critical part of a company’s efforts to develop more sustainable sourcing practices. Rather than micromanaging suppliers toward the practices they want to see, the best companies use environmental considerations as an opportunity to forge deeper and more collaborative relationships with suppliers. Investments in deep and
long-term supplier relationships are a core feature of any company’s approach to supplier relationship management and help mitigate disruption.
ENVIRONMENTAL FOCUS LINKED TO HIGHER PERFORMANCE Accounting for environmental factors like sustainability may cost more money in the shorter-term (although in some industries that premium is decreasing); you have to spend green to be green. But, these investments are worth it in the long run. Organizations that consider environmental factors to a great extent generally perform better across a range of procurement measures in APQC’s Open Standards Benchmarking data. For example, these companies can perform procurement processes with far fewer full-time equivalent employees (FTEs) than those that consider environmental factors to little or no extent (169 vs. 322 FTEs). These environmentally conscious companies also tend to retain more highly
trained and experienced procurement staff and have lower cycle times for placing purchase orders (24 hours vs. 33). Consideration of environmental factors in sourcing decisions is a hallmark of companies that are more mature and deliberate about their procurement staffing and purchasing practices. For these companies, environmental concerns are part of a broader strategic mindset that leads to more robust risk assessment and deeper supplier relationships. When companies care about these external strategic factors—which also include concerns like geopolitics and weather events—they make a more deliberate effort to cultivate the people, technologies and supplier relationships needed to keep procurement agile and adaptable in the face of disruption. Lowest cost isn’t everything in procurement. Companies need to account for a range of other strategic considerations, including environmental factors. The companies that are more intentional about sourcing often find new opportunities to forge deeper relationships with suppliers that drive innovation and competitive advantage. They also invest more deeply in the technology, processes and people that help ensure supply chains remain resilient regardless of what the future might bring. ABOUT THE AUTHOR MARISA BROWN senior principal research lead APQC
SDC1220_10-19_Cover.indd 19
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
19
11/23/20 4:24 PM
2020 GREEN SUPPLY CHAIN AWARD
By Mackenna Moralez, Assistant Editor
Sustainability Requires
ACCOUNTABILITY
Supply & Demand Chain Executive announces the winners of its annual Green Supply Chain award.
T
he Coronavirus disease (COVID-19) pandemic has upended many industries, and the supply chain is no exception. Since March, millions of people have lost their jobs, plummeting the economy. Stores experienced severe shortages of essential products. And, companies’ supply chains were upended, forcing them to re-tool, revamp and re-assess how they do business and move product through the supply chain. But, the supply chain industry continues to persevere, coming together to address some much-needed changes in sustainability and holding corporations accountable for their green practices. In fact, a Kearny study found that 78% of consumers believe companies could be doing more to help them make decisions that improve environmental outcomes, while 48% of consumers have grown more concerned about green practices since the outbreak began. As the pandemic continues, more companies have zeroed in on their green initiatives. A Coyote Logistics report found that 81% of companies are more focused on sustainability today than they were three years ago. In order for companies to maintain successful supply chains, sustainable practices must play an integral role company-wide. This year’s winners of the Supply & Demand Chain Executive Green award continue to put sustainability at the forefront. The Green Supply Chain award recognizes companies making green or sustainability a core part of their supply chain strategy and working to achieve measurable sustainability goals within their own operations and/or supply chains. The recipients of
20
this year’s award have made sustainability a priority in a time of crisis, focusing on ways to re-use or recycle items throughout their operations. According to an EcoVadis survey, supply chains were vulnerable leading up to the COVID-19 crisis. Nearly 18% of businesses in North America participate in direct carbon reporting compared to 15% of organizations in Europe and AMEA. Small and medium-sized enterprises underperform in emissions reporting, highlighting the need for engagement strategies that develop management system maturity and guide improvements. “The recent pandemic put a magnifying glass on supply chain risks and vulnerabilities,” Pierre-Francois Thaler, co-CEO of EcoVadis, said in a press release. “As organizations look to rebuild operations, they must ensure strong sustainability practices remain front and center, especially when it comes to supplier selection and relationship management. You are only as strong as your most vulnerable supplier, and without a holistic sustainability management system, organizations will continue to struggle to build resilience to supply chain disruptions and fail to meaningfully contribute to global sustainability outcomes.” Regardless of how long the pandemic continues, sustainable practices and operations are now considered an expectation among consumers and key stakeholders. As companies pave the way to become sustainable leaders in the global supply chain, consumers will take notice. Please join SDCE in congratulating the Green Supply Chain award winners. Here are some select standouts.
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_20-27_Green Awards.indd 20
11/23/20 4:37 PM
ADEXA adexa.com
ALPEGA alpegagroup.com
For Adexa, measuring is the first step to improvement. The company enables Fortune-class manufacturing companies to monitor their carbon footprint index every time they plan production, determining all the possible ways of producing a mix of products at all different locations and with the use of different materials. As the combination of production factors changes, so too does the carbon footprint. This allows Adexa’s planning system to tag the carbon footprint of each method, supplier, component, location and more. The company’s system also deploys machine learning techniques using pattern recognition algorithms to detect trends and find major causes of carbon emission in the supply chain, integrating product lifecycle management and supply chain planning to produce a greener company. By offering visibility into its methods, Adexa provides insight that helps educate clients on the impact their operational decisions have on the environment.
Alpega provides several transportation technology solutions to support corporate supply chain sustainability efforts. The company’s transportation management system offers an integrated carbon footprint calculator to calculate and track the CO2 footprint of shipments, providing customers visibility into the sustainability practices of their supply chains. With that, companies can monitor and create transparency around their greenhouse gas contributions and the data can be collocated and used for reporting, comparisons and future tenders. In addition, Alpega’s TenderEasy platform enables freight tendering, spot bidding and the ability to source and evaluate a preferred carrier network based on specific criteria that aligns with sustainability goals that can be used as points of consideration when procuring carriers to help reduce one’s carbon footprint.
ALOM TECHNOLOGIES CORP. alom.com As a global supply chain provider, ALOM maintains an increased responsibility of monitoring environmental management by demonstrating its highest levels of corporate social responsibility. Over the last year, ALOM formalized its longstanding commitment to environmental protection and resource sustainability by achieving ISO 14001 certification at both its Fremont, Calif., and Indianapolis, Ind., production and fulfillment facilities. Despite the company already executing environmental and sustainability policy/programs throughout its operations, ALOM demonstrated to clients and community stakeholders that its environmental management system fully achieved its intended outcomes. The company has placed a key focus on its environmental management plan with associated performance metrics and regulatory compliance documentation into four areas—material sourcing/procurement; carbon footprint offset; operational efficiency and supply chain planning; and material recycling and use of sustainable materials.
AUTOSTORE autostoresystem.com AutoStore continues to be a pioneer for cube storage automation. The company provides retailers with cutting-edge, sustainably designed technology that revamped the outdated retail supply chain system, allowing customers to achieve measurable sustainability goals within their operations. The company also restructured the way customers handle their operations to meet their sustainability goals by ensuring warehouses are optimized and that automated robots are using minimal energy. Just 10 AutoStore robots use as much energy as a household vacuum, consuming as little as 100 watts of energy an hour. Aside from conserving warehouse energy, AutoStore also enables companies to utilize their products long-term, committing to first servicing parts rather than replacing and wasting materials unless absolute necessary.
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
SDC1220_20-27_Green Awards.indd 21
21
11/23/20 4:37 PM
2020 GREEN SUPPLY CHAIN AWARD BASWARE basware.com
BGIS GLOBAL INTEGRATED SOLUTIONS bgis.com
Basware continues to put sustainability at the forefront by using automation via its Basware electronic purchase-to-pay services. By adopting electronic invoicing, companies can not only reduce the amount of paper used within the organization, but also reinforce their green credentials by reducing CO2 emissions. The company is also committed to helping customers adopt sustainability practices. Just this year, Basware introduced an invoice carbon footprint index, which allows customers to view their CO2 emissions per invoice and benchmark the index against peer companies. Basware customers can also follow development of their own CO2 index over time, as well as see the average carbon footprint within the Basware network and benchmark against that. Plus, the solution estimates how many trees or how much water a company has saved if they onboard more suppliers to e-invoicing.
BGIS Global Integrated Solutions prides itself on being a leader when it comes to corporate social responsibility. The company’s BGIS Sustainable Procurement policy provides guidance to all BGIS personnel toward integrating environmental and social considerations in purchasing decisions to promote a more sustainable way of doing business. The company is committed to providing safe and healthy working conditions, all while operating under an environmental stewardship philosophy. Through its commitments, BGIS enables corporate innovation and across its clients’ real estate portfolios by developing and implementing industry real estate and facility management solutions.
BERGEN LOGISTICS bergenlogistics.com Bergen Logistics is always looking for ways to better the company and evolve its processes that best serve customers and the environment. The company has been incorporating green and sustainable activities and policies in its supply chain through a variety of areas. For example, in its four U.S. locations, Basware lowered energy consumption by installing LED lights and motion sensors. In addition, it completely turned off lighting in its 10,000-square-foot Automatic Guided Vehicle Area. In two locations, the company installed HVLS fans to reduce the number of individual cooling devices on the floor. Meanwhile, Bergen incorporates sustainability into its shipping operations by offering carbon-neutral shipping options.
22
CONTROLANT controlant.com Waste, whether it be from food, beverage or pharmaceutical, is becoming a global epidemic. Controlant’s solution reduces supply chain waste and carbon footprint. Plus, its Internet of Things (IoT) data loggers are reusable, which allows clients to reduce their logger usage to 30,000 through a reusable device that will last for years.
CT LOGISTICS ctlogistics.com To further its sustainability efforts, CT Logistics invested in software developments that provide shippers the tools to make greener choices in their supply chain. The company enhanced its FreitRater Lion software to help shippers drive energy efficiency with supply chain routing analysis technologies, aiming to facilitate more optimal and a greener transportation mode for shippers. In addition, the software enables shippers to choose environmentally conscious routings, mode selections and carriers with the shortest transit times to reduce fuel consumption and lower CO2 emissions.
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_20-27_Green Awards.indd 22
11/23/20 4:38 PM
S
HILTON SUPPLY MANAGEMENT mysupplymanagement.com
THE RAYMOND CORPORATION raymondcorp.com
ng
As a global hotel brand operating in some of the most beautiful destinations around the world, Hilton and its procurement arm, Hilton Supply Management (HSM), recognize their critical responsibility to protect the planet, so that it remains healthy and vibrant for future generations. Hilton is redefining sustainable travel through its Travel with Purpose program. By 2030, the company committed to cut its environmental footprint in half and double its social impact by driving positive change across operations, the supply chain and in the communities in which it operates. To activate on this commitment, HSM works closely with partners across the supply chain to identify opportunities to source responsibly, reduce plastic waste, address food waste, increase recycling rates and collaborate with local communities to invest in projects that contribute to environmental stewardship and resiliency.
The Raymond Corporation incorporates sustainability into its supply chain in numerous ways, including upgrading software and controllers to automated logic, designating five full-time positions responsible for minimizing the organization’s waste stream, using alternative fuels or energy cycles, implementing sustainable packaging and more. By doing this, the company has seen a nearly 56% reduction in landfill contribution per truck since 2010 and recycling 97.6% of byproducts. In addition, 100% of the company’s wood pallets are either recycled or re-used.
e te y
nt. o .
RYDER SYSTEM, INC. ryder.com Ryder System grabbed on to the opportunity to reduce environmental impacts of its own operations, reducing more than 21% of CO2E emissions in the last 10 years. By utilizing Ryder’s supply chain solutions and dedi-
moving towards
a greener supply chain an electronic bill of lading and transportation solution Contact us at
www.techsera.com | xbol.io contactus@techsera.com
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
SDC1220_20-27_Green Awards.indd 23
23
11/23/20 4:38 PM
2020 GREEN SUPPLY CHAIN AWARD cated transportation solutions, customers benefit from maximizing freight tonnage delivered per shipment and per mile, while minimizing fleet emissions and related fuel costs for their operations. The company invests in state-of-the-art vehicles, fleet management solutions and diagnostic technologies that expand cleaner-burning fuel capabilities and drive fuel savings. In addition, at Ryder-managed warehouses, the company employs LEAN methodologies that continually improve operating processes, maximize efficiency and minimize waste.
SHIPHAWK shiphawk.com ShipHawk lets data be the guide for packing in boxes, poly mailers, padded mailers, shipping bags and envelopes to ensure the right container is used for each order. The company reduces the amount of packing material required to process an order, configuring every order based on item size, weight, value and fragility and selects the smallest box that meets carrier standards to
reduce box usage. In addition, the company assembles the boxes onto pallets to rate across mode to ensure the most efficient transportation option.
SHIPWELL shipwell.com In an industry with tight margins, high food waste and major swings in demand, Shipwell helped to streamline the inbound logistics operation of a major meal kit company and quickly identified features in the platform that could help it reduce waste with efficient logistics. The company used Shipwell’s TMS to integrate its order system and centralize orders through its application programming interface. By doing so, Shipwell consolidated the orders into shipments based on characteristics informed by machine learning and artificial intelligence into fewer shipments, saving the customer money, but also reducing pollution from excess long-haul shipments. By managing all shipments in one platform, Shipwell helped the meal kit company reduce food spoilage and improve supply chain efficiency.
ShipHawk is the premier packing and shipping software for ERP connected companies.
Process orders faster. www.shiphawk.com 24
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_20-27_Green Awards.indd 24
11/24/20 8:38 AM
TECHSERA INC. techsera.com
WEST LIBERTY FOODS wlfoods.com
TechSera offers “x.BOL” as a carbon-neutral, go-green solution to the traditional paper-driven documents that shippers and truckers tend to use. By using an electronic Bill of Lading exchange, shipping and trucking companies can provide the information digitally, enable track-and-trace options, collect digital signatures and have proof of delivery. This allows for tremendous paper savings and offers a major ROI on digital tools.
West Liberty Foods is committed to preserving natural resources and protecting environmental quality. Safeguarding natural resources helps ensure its business has the raw materials it needs—now into the future—to continue producing high-quality, safe protein products. The company’s environmental policy statement outlines its commitment to preserving natural resources, protection of shared resources and enhanced community involvement around these goals. Its locations are ISO 14001-certified and verified landfill-free. Currently, West Liberty Foods distributes a sustainability questionnaire to all vendor partners that measures involvement in, and achievements of, programs pertaining to sustainability, auditing, animal welfare, environment, community, ethics practices and more. By doing so, the company leans on its vendor partners to ensure supply chain practices and strategies meet evolving goals and continuous improvement initiatives.
VAI vai.net VAI’s cloud-based enterprise resource planning and technology solutions help enhance sustainability across the supply chain for distributors, manufacturers and specialty retailers. By servicing many industries, the software is equipped with green measures that not only save companies time, money and resources, but also adds value to their bottom line. In addition, the company’s warehouse management system helps customers reduce paper and manual processes, sharply reducing the use of natural resources. And, VAI’s truck mapping application helps companies maximize available space on trucks by consolidating pallets as well as making sure they are positioned correctly for deliveries. This allows companies to organize routes and ensures that warehouse employees have the right information and can minimize breakage while maximizing efficiency.
IT’S EASY
BEING GREEN BE COMPETITIVE AND SUSTAINABLE
ALPEGA SOLUTIONS FOR SUSTAINABILITY
2
FREIGHT PROCUREMENT
CO CALCULATOR
PLANNING & OPTIMIZATION
REUSABLE PACKAGING MGMT
IMPROVE EFFICIENCY. REDUCE CARBON EMISSIONS. ACHIEVE GREENER LOGISTICS. (877) 763-3240
na.alpegagroup.com
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
SDC1220_20-27_Green Awards.indd 25
25
11/23/20 4:39 PM
2020 GREEN SUPPLY CHAIN AWARD A. Duie Pyle aduiepyle.com
FST Logistics Inc. fstlogistics.com
PITT OHIO pittohio.com
Alliance Shippers Inc. alliance.com
GEODIS Logistics LLC geodis.us
Quadient us.packagingbyquadient.com
Americold americold.com
GlobalTranz globaltranz.com
The Raymond Corporation raymondcorp.com
APTEAN aptean.com
GoodOps goodops.co
Arena Solutions arenasolutions.com
Holman Parts Distribtuion holmanparts.com
RFgen Software, division of DataMAX Software Group, Inc. rfgen.com
AspenTech aspentech.com
Hub Group hubgroup.com
Assured Logistics Enterprise shipwithale.com
Hyster Company hyster.com/north-america/en-us
Averitt Express averittexpress.com
iGPS Logistics igps.net
CCT Shipping Frames LLC cctshippingframes.com
Inmar Intelligence inmar.com
CGP EXPAL cgp-expal.com
Kuebix, a Trimble Company kuebix.com
Chainalytics chainalytics.com
LLamasoft llamasoft.com
CHEP chep.com
MatchBack Systems Inc. matchbacksystems.com
Consolidated Chassis Management ccmpool.com
Matson and Matson Logistics matson.com
Crown Equipment Corporation crown.com
Fleet Advanage fleetadvantage.com
DeepStream Technologies deepstreamtech.com
MPO mpo.com
Diageo North America diageo.com
Newegg Logistics newegglogistics.com
DSC Logistics dsclogistics.com
Nolan Transportation Group (NTG) ntgfreight.com
Echo Global Logistics echo.com
Ontruck ontruck.com/uk
Elite Transit Solutions LLC elitetransit.com
ORBIS Corporation orbiscorporation.com
enVista envistacorp.com
Outrider outrider.ai
Flexport flexport.com
Penske Transportation Solutions gopenske.com
Flock Freight flockfreight.com
Peoples Services Inc. peoplesservices.com
Flux Power fluxpower.com
PINC pinc.com
SAP sap.com Sarasota County Government scgov.net SFL Companies sflcompanies.com Tecsys Inc. tecsys.com Toshiba America Business Solutions business.toshiba.com TRAILAR trailar.co.uk Transplace transplace.com Trinity Logistics trinitylogistics.com U.S. Xpress usxpress.com Upcycled Food Association upcycledfood.org vHub vhubapp.com Viking Cold Solutions vikingcold.com Werner Enterprises/Werner Logistics werner.com XPO Logistics xpo.com Yale Materials Handling Corporation yale.com/north-america/en-us Z5 Inventory z5inventory.com
FourKites, Inc. fourkites.com
26
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_20-27_Green Awards.indd 26
11/23/20 4:39 PM
Visit Supply & Demand Chain Executive online for • Digital editions of the magazine
Covering THE ENTIRE global supply chain ONLINE
• Channels of content specific to warehousing, procurement, sustainability, professional development and more
WWW.SDCEXEC.COM
• Upcoming educational webinars • Nomination information for the following industry awards: Pros to Know, SDCE 100, Green Supply Chain, Women in Supply Chain Award • Headline News e-newsletter subscription sign up • And more!
SDC1220_20-27_Green Awards.indd 27
11/24/20 8:38 AM
SPECIAL REPORT EMERGING TECH
THE STATE OF WIRELESS ASSET TRACKING IN THE SUPPLY
CHAIN INDUSTRY
W TR
Wireless asset tracking provides an efficient, constant and remote way to locate and monitor assets in real time.
I
industry will continue to embrace n today’s interconnected logistics becomes more complex. it moving into 2021. world, tracking assets Naturally, businesses with more throughout the global control over their logistics supply chain industry is have a greater opportunity of ADDED VALUE essential. As is the ability to do increasing their bottom lines by Long before the Internet of so ubiquitously and accurately. reducing costs, optimizing profits Things (IoT) and IoT devices The need for asset tracking and providing better customer introduced the promise of keeps growing, especially service. In today’s increasingly generating, collecting and after the Coronavirus disease interconnected and mobile exchanging live data, companies (COVID-19) pandemic forced world, wireless asset tracking can would track their assets manually. consumers online in droves, which give businesses more control by This left room for large exponentially boosted demand for providing an efficient, constant margins of error resulting from e-commerce and shipping. Not and remote way to locate and myriad reasons, ranging from to mention, in the United States monitor products in real time. mismanagement of physical items, alone, 1.7 million packages don’t Here are some challenges time and logistical restraints arrive at their final destination wireless asset tracking faces in on manpower, theft, accidents, and are reported stolen or lost the supply chain, and why the lost cargo, etc. Today, through on a daily basis, connectivity and advanced resulting in $25 software solutions, million worth of companies can remotely lost goods a day, track their assets from according to C+R anywhere at any point in Research. the supply chain, all while It goes without analyzing that data to saying that as determine and monitor the globalized their assets. Companies logistics landscape can also keep track of keeps expanding, overall workflow, service More companies are moving toward using Internet of Things supply chain quality and productivity, to create greater efficiency within their supply chain.
28
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_28-29_[SR]Emerging Tech.indd 28
as im I ass to acc Re
11/23/20 4:45 PM
W sup ass cur ful Th for no on ser tec F tra ma ful M usi ph as mo T uti ass is f exp ma aw abo wi bu T the at fea of
Y
e
ce
y.
ms,
ed
e
as well as prevent asset loss or improve the asset recovery process. It’s no wonder that the global asset tracking market is forecast to surpass $31 billion by 2025, according to Data Bridge Market Research.
monitoring software platforms. The most relevant areas for improvement include higher accuracy rates, less vulnerability to hackers, longer battery life and better connectivity.
WHERE WIRELESS ASSET TRACKING FALLS SHORT
Organizations are increasingly embracing IoT to maximize their profit from supply chains. IoT capabilities help them develop new products and services, predict their customers’ needs and quickly execute their strategies. IoT also allows businesses new revenuegenerating channels. Therefore, it’s not surprising that more business processes will involve using one of the elements of IoT this year, as Gartner predicts, with a thirty-fold increase in internet-connected physical devices, which will “significantly alter how the supply chain operates.”
While adding significant value to supply chain companies, wireless asset tracking technologies are currently far from being able to fulfill the industry’s full potential. There are a number of reasons for this, a key one being that not all industries that depend on supply chain management services use wireless asset tracking technologies. For companies utilizing wireless tracking, the issue is that they may not be maximizing the full utilities of the technology. Many companies are mostly using it to track, monitor and physically secure valuable assets, as well as asset management, fleet monitoring and smart logistics. This lack of complete utilization means that wireless asset tracking in the supply chain is falling short of the customer experience. Rather, it’s that more marketing is needed to raise awareness amongst enterprises about the benefits and value wireless tracking can provide their business assets. To keep up with demand, there are constant attempts at improving the precision, features and overall performance of wireless asset tracking and
LOOKING AHEAD TO IOT
GLOBAL ASSET TRACKING KEEPS TRENDING UPWARDS The following are some vital areas where wireless asset tracking plays a central role in moving the supply chain forward: Monitoring assets, of all price ranges. Businesses are no longer monitoring just the location of their expensive assets, like trucks, trailers, shipping containers or railcars. Today, there’s also a need to monitor less expensive assets, like cartons or rolls, so they’ll be readily available and accessible when needed. Such monitoring also prevents them from being
SDC1220_28-29_[SR]Emerging Tech.indd 29
stolen, getting lost or being unused. Fleet monitoring operation. More businesses are monitoring vehicle drivers and fleets to help boost and maintain responsible corporate behavior by maximizing delivery times, capacity utilization, vehicle maintenance, enforcement of rest periods for drivers and C02 emissions. Predictive and preventive maintenance. Fleet operators need to monitor the maintenance of their engines and equipment used in supply chain processes. Doing so results in longer lasting equipment and reduced risks of production stops, ensuring that operation management can better protect their investments. Preventing theft. Theft, whether from the factory, en route to stores or store shelves, is common. Wireless asset tracking throughout the supply chain may reduce instances of theft. More companies are moving toward using IoT to create greater efficiency within their supply chain. Increased use of wireless asset tracking technologies, especially those platforms that are dependable indoor and outdoor, will provide new solutions for improved supply chain practices and management. The end result will be new revenue options and improved ROI. ABOUT THE AUTHOR GIDEON ROTTEM CEO Deeyook
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
29
11/23/20 4:45 PM
SPECIAL REPORT PROCUREMENT
GREEN PROCUREMENT
AND ITS ROLE IN SUSTAINABILITY INITIATIVES
Green procurement plays an essential role in driving sustainability, and is often the missing link between stakeholders, suppliers and commercial teams.
I
n early 2020, almost every company pushed for broad, long-term sustainability pledges supporting climate change. Then the Coronavirus disease (COVID-19) pandemic hit, and sustainability went out the window. Businesses went into survival mode to manage the aftershocks from major disruptions to global manufacturing and supply chains. As companies slowly emerge from the crisis, they are now redirecting their focus to earlier pledges of sustainability. Green procurement plays an essential role in driving sustainability, but is often the missing link enabling both shortand long-term sustainability initiatives. There is a unique opportunity for companies to rebuild their business relationships and supply chains emerging from the pandemic with sustainability at the forefront.
INNOVATION DRIVES SUSTAINABILITY As sustainability goals continue 30
to trend, companies and suppliers need to focus on practical, incremental green improvements that balance cost and efficiency in their supply chain in order to create and meet short-term goals. Additionally, many chief procurement officers see sustainability as a key tool to retain top talent passionate about the subject. A large amount of innovation is led by smaller organizations that are more agile. But, corporations with massive investments toward sustainability will need to help them on this journey. With collective collaboration, all companies should capitalize on new growth areas of sustainability. Certain innovations such as motion sensor or LED lights in warehouses and idle areas could be adopted quickly, saving energy, costs and potential tax benefits. These small changes could create tangible cost benefits whilst being better for the planet. Other examples of small sustainability innovations include packaging optimization, specifically recycled
materials that limit dumping in local landfills. Through measures such as these, businesses and customers can see the local impact. As many large companies implement major sustainability strategies and initiatives, there will be a ripple effect as they seek to maintain the growing sustainability demands of their customers. While many small businesses will not have immediate access to the resources needed to make these improvements, there will be shifts in innovation that will emerge in the supply chain and lead the way to create a greener future.
BUILDING A GAME PLAN When developing long-term initiatives, large companies are missing opportunities in the short-term and day-to-day to adopt green initiatives into their procurement strategy. While these ambitious, long-term sustainability goals are fantastic, businesses must challenge procurement teams to seek out
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_30-31_[SR]Procurement.indd 30
11/23/20 4:47 PM
Pro xim a
THE FUTURE OF
mo tha an L op M to pac an As rec an pu e-c to ava eve spa tw saw in in Co De W if t to exp L ini ove tea the ini ne tea sus con
Y S
s
ts n ay
N
As sustainability goals continue to trend in 2020 and beyond, companies and suppliers need to focus on practical, incremental green improvements.
Pro xim a
N T
more immediate opportunities that can make a difference now and into the future. Let’s start with packaging optimization, for instance. Manufacturing clients need to analyze their full range of packaging to optimize sizing and minimize material waste. As consumers continue to receive unnecessary box sizes and packaging for today’s purchases, especially in a growing e-commerce world, it is important to ensure efficient packaging is available and scalable to improve everything from material cost to space utilization. Within the first two quarters of 2020, e-commerce saw almost a 20% growth rate in 2020, up from almost 15% in 2019, according to Digital Commerce 360 analysis of U.S. Department of Commerce data. With these growth numbers, if there are not improvements to packaging, there will be exponential waste and lost cash. Long-term sustainability initiatives may seem overwhelming, but sustainability teams may be the only ones at the company focusing on these initiatives. Company leadership needs to empower procurement teams to make decisions based on sustainability criteria, or they will continue to be an afterthought.
RECOVERY AND INVESTMENT Sustainability-driven businesses have the capabilities to promote economic recovery and take the lead on community development in areas severely impacted by COVID-19. Re-investment strategies in communities, warehousing, technology and environmental protection will be used by companies that want to improve their communities, stabilize their business and meet customer demands. Large companies have investment funds to help local organizations invest in sustainable approaches, propelling that ripple effect across industries to become more sustainable. Reinvesting into warehousing and delivery efficiencies within the supply chain equates to lower consumption of fuel and labor. Efficiency software and technology, transportation management systems and warehouse management systems improve utilization and efficiency of the warehouse, save energy, lower labor cost and lessen physical depreciation of units. Investors prioritize companies who have positive environmental, social and governance ratings and need to see companies actively engaging in sustainable
SDC1220_30-31_[SR]Procurement.indd 31
approaches concerning the planet, people and profit.
WHAT IS GREEN PROCUREMENT? To drive sustainability initiatives, supplier relationships are key. Green procurement’s role will be essential in managing relationships with suppliers. Procurement specialists need to ensure that upstream suppliers are adhering to environmentally friendly standards. They also should dive into developing greener outcomes—opportunities like optimized packaging and recycling depots at retail establishments to re-insert materials back into the supply chain. Supplier and buyer relationships need to mature from transactional manufacturers to collaborative partners to improve sustainable practices, design and materials. Leaders can no longer overlook the role sustainability will play in cost savings and reputation building. It may decide the success or failure of a company’s future.
ABOUT THE AUTHOR SHANE ROONEY consultant Proxima Group
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
31
11/23/20 4:47 PM
EXECUTIVE FOCUS
4
TRANSPORTATION
WAYS TO FIGHT SHIPPING FRAUD WHILE REDUCING OPERATIONAL OVERHEAD
Here’s how advanced technologies such as UML and holistic data analysis help logistics and delivery companies detect fraud attempts early and in an automated fashion.
T
he images of people stealing packages off porches—so-called “porch pirates”—are all over the news, and they’re infuriating to consumers. Though, package theft happens even more frequently over digital channels, well before the goods arrive at their destination. This is a huge financial problem for organizations across the United States. With FedEx and UPS delivering more than 34 million packages daily, it’s no wonder fraudsters are attempting to cash in on this industry. According to Experian, shipping fraud rates increased by 37% from 2016 to 2017 and shipping fraud attack rates increased by 60% in the Western United States alone. With more and more
32
online orders being placed since the beginning of 2020, that percentage will keep climbing.
HOW DOES SHIPPING FRAUD HAPPEN? Fraudsters use fake or stolen credentials to pose as customers to redirect deliveries to their own addresses. For example, they can use customer information to create a fake online account using the delivery company’s shipping portal and modify orders to include high-value items or re-ship them to different destinations. Fraudsters may also call the service center and impersonate good customers to make changes to accounts, such as shipping details and credit card information. Or, they may massregister online accounts to send
emails that entice recipients to fall for advertising fraud. Logistics and delivery companies can lose millions to shipping fraud each year due to these malicious activities. Recently, a leading logistics company was struggling to get control of shipping fraud. Fraudsters had been mass registering fake accounts and using them to track and re-route packages, issue package holds for delayed pickups and spam good users with malicious advertising and/or emails requesting package-related data. They were also tracking thousands of fraudulent shipping actions using the company’s online portal or manipulating customer orders or accounts via phone. These activities caused financial losses as well as reputational damage.
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_32-35_[EF]Transportation.indd 32
11/23/20 4:59 PM
I rou ob the Pre abi leg
CO
To du sub fou sol
W to ad (U pat tec too S fra
all
e r
g
as
TRANSPORTATION
If the fraudster had used a single account to intercept and reroute a large volume of packages, the action would have been an obvious red flag. By mass registering and using multiple accounts, the criminals made it difficult to identify the activity as fraud. Preventing mass registration requires early detection and the ability to spot known and unknown patterns—capabilities that legacy, rules-based fraud solutions lack.
COMBAT SHIPPING FRAUD WITH THESE 4 TACTICS To reduce shipping fraud, it’s critical to uncover fraud patterns during the early stages—at sign-up or when requests are submitted for package re-routes, for example. Here are four foundational technologies to implement as part of an effective solution for preventing shipping fraud. Artificial intelligence and advanced machine learning. Whereas rules-based solutions rely on historical data and labels to spot potentially fraudulent activity, solutions that leverage advanced technologies such as unsupervised machine learning (UML) help organizations spot both known and unknown fraud patterns. This is important because fraudsters modify their techniques and have access to artificial intelligence-powered tools and bots that defy detection. Solutions that leverage UML have been shown to detect fraudulent accounts about 30 days earlier than legacy rules-based
HIGH-BAY WAREHOUSE FOR HIGH-BAY DEEP FREEZE WAREHOUSE FOR INTRALOGISTICS DEEP FREEZE AT ITS BEST INTRALOGISTICS In Burley, Idaho, AT ITSNewCold BEST celebrated the grand opening of one of the largest frozen storage facilities of its kind. This impressive project includes a high bay warehouse with 90,000 pallet positions supplied by SSI SCHAEFER.
The demand for deep-freeze products continues to grow. As volumes increase, requirements placed upon deep-freeze logistics are getting more complex. SSI SCHAEFER offers flexible, modular, and scalable solutions that optimize storage, picking processes, and profitability within cold storage facilities.
ssi-schaefer.com
ssi-schaefer.com
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
SDC1220_32-35_[EF]Transportation.indd 33
33
11/23/20 4:59 PM
TRANSPORTATION
solutions. Instead of focusing on behavior monitoring at the attack event level, advanced solutions can catch fraudsters upon account registration, neutralizing them before damage can occur. Holistic data analysis. Analyzing data on a holistic level enables organizations to uncover anomalies and suspicious activities and detect connections between seemingly unconnected data points to uncover sophisticated fraud attacks. Using a holistic approach to analyzing user profiles, digital fingerprints, registration and tracking events and package shipping and rerouting activities, organizations can detect up to 60% more fraud. Holistic data analysis enabled the logistics leader mentioned earlier to capture coordinated groups of fraudulent users taking advantage of its online tracking portal to manage illicit activities. That translated to about $4 million in savings annually. Early detection. Fraud attacks are often launched immediately following account registration, and a slow response can result in huge fraud losses. Combining UML with holistic analysis across large sets of data at scale enables advanced fraud and risk solutions to uncover suspicious activities early and in real-time, before fraud can be committed. Even if fraudsters make it past registration, they can be stopped at the first attack. Accelerated case review. Individual-based fraud investigations are not intuitive or 34
effective to uncover sophisticated patterns and coordinated attacks, and fraud can slip through the cracks. Investigating cases by manual scanning is timeconsuming and can’t keep pace with the speed of modern fraud. Plus, it increases operational overhead.
HOW ADVANCED SOLUTIONS DELIVER Advanced solutions that use automation and bulk decisioning can rapidly uncover clusters of fraudulent activities, increasing review efficiency. Fraud analysts need only to review a handful of sample cases before confidently making bulk decisions applicable to all cases within the same fraud ring. Accelerating case reviews has been shown to reduce operational overhead by 40% or more. The delivery company in the above example put these technologies to use and successfully thwarted two fraud attempts this year that could have been massive in scale and caused significant damage. First, the company detected a fraud attack made of 257 users registered in a four-day span in March. Another one was also detected and that involved 30 users over a 15-day period in April. Each of the accounts engaged in tracking and rerouting packages and shared several other characteristics, including email address patterns, IP addresses and device IDs. Had it not been for the company’s advanced fraud and risk solutions,
the delivery company could have lost millions.
SHIPPING FRAUD IS OMNICHANNEL, SO SHOULD PREVENTION Since the onset of the Coronavirus disease (COVID-19) pandemic, purchasing behaviors have given rise to new fraud patterns, and shipping fraud is a popular vector. Fraudsters can use any customer touchpoint—account registration, payment or other translation or interactions with digital portals and customer support systems— as an entry point to steal user information and commandeer accounts. Because deliveries involve many customer touchpoints, preventing shipping fraud requires an omnichannel approach that provides continuous protection across the customer account lifecycle. Advanced technologies such as UML and holistic data analysis can help logistics and delivery companies detect fraud attempts early and in an automated fashion, no matter where they originate. This prevents attack and downstream damage, while reducing the high cost and operational overhead often associated with traditional methods of fraud prevention. ABOUT THE AUTHOR PULE WANG technical account manager DataVisor
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_32-35_[EF]Transportation.indd 34
11/23/20 5:00 PM
2
e
2021 Summit Webinar Series THE PREMIER VIRTUAL EVENT EDUCATING LOGISTICS PROFESSIONALS ON CRITICAL ISSUES IMPACTING THE SUPPLY CHAIN INDUSTRY.
9)
January 28
Pharma Safety
mer n,
From maintaining temperature control to abiding by FDA regulations to even adjusting to online delivery, suppliers are hard-pressed with moving temperaturesensitive product in a safe, sustainable and efficient manner. Hear how experts tackle many of today’s freight challenges and ensure track-and-trace measures along the way.
—
res
February 23 & 25
Sustainability Whether it be reducing waste, implementing sustainable packaging materials or optimizing supply chain operations to be more energy and fuel efficient, many companies are taking extra measure to ensure a sustainable footprint. Discover why sustainability matters amid a pandemic, how companies can achieve a sustainable supply chain and what NOT going sustainable means for the future.
March 30 & April 1
The Ins & Outs of Air, Land & Sea
h
What happens when pandemic hits, a hurricane puts a port on standstill or trucks are forced to adjust how and where they deliver product? Experts detail the advantages of each shipping method, how technology facilitates traceability, visibility and quality along the line and how changes in supplier sourcing impact the way companies move product from coast to coast.
DETAILS, REGISTRATION & ON-DEMAND WEBINARS SDCEXEC.COM/WEBINARS
SDC1220_32-35_[EF]Transportation.indd 35
To become an expert panel sponsor, contact:
Jason Desarle, Group Publisher | 440-476-9526 | jdesarle@ACBusinessMedia.com
11/23/20 5:00 PM
EXECUTIVE FOCUS
WAREHOUSING
11 OPPORTUNITIES TO OWN THE FUTURE
dri acr •
•
•
OF SUSTAINABLE WAREHOUSING
•
End-to-end sustainability is the way of the future, particularly when that future is defined by supply chain uncertainty and turbulent market conditions.
36
HOLISTIC SUSTAINABILITY For many, sustainability evokes “going green.” Holistic sustainability is about more than environmental initiatives and corporate responsibility. It’s about protecting product quality, ensuring employee safety, and ultimately, driving ROI. The best way to think about it is to borrow from the notion of ESG, which is to reduce your Environmental impact, protect Societal wellbeing and improve
He can res en an ou
business outcomes through good corporate Governance. Forward-thinking company leaders know this. That’s why sustainability initiatives continue to expand beyond strictly energydense areas of operation, like manufacturing. End-to-end sustainability, inclusive of the warehouse, is the way of the future, particularly when that future is defined by supply chain uncertainty and turbulent market conditions. This sustainability agenda
sto use im bet ris E Th an mo for O sur wa are bec les fun pro
CRB
P
icture yourself stepping into a warehouse, circa 1990. What do you see? Low racking separated by aisles wide enough to accommodate a superhighway of operator-driven forklifts. You also see paper, a clipboard in every hand and a stack of physical records around every corner. And, how about what you feel, or rather, what you don’t? No climate control. Very little ventilation. Looking back, it’s easy to spot these risks and inefficiencies and appreciate how far we’ve come thanks to improved technology and shifting marketplace dynamics. But, what about looking ahead? How can we design resilient and sustainable warehouses that are ready for another 30 years of rapid change? A company’s most useful tool in answering these questions is one that’s not typically associated with warehousing design—at least, not yet—and that’s sustainability.
RE OP
A fully sustainable warehouse is about designing warehouses that are part of a resilient, energy-efficient, safe and optimized enterprise ecosystem.
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_36-37_[EF]Warehousing.indd 36
11/23/20 5:07 PM
dy are bec the
WAREHOUSING
drives change in the warehouse across four key areas: • Warehouses will develop more resiliency. • Warehouses will make smarter use of energy. • Warehouses will prioritize worker safety. • Warehouses will contribute to better business outcomes through tech-assisted optimization.
G
RESILIENCY, SAFETY AND OPTIMIZATION
d
e y-
of
CRB
n et
Here are some ways warehouses can be designed to offer more resiliency, make smarter use of energy, prioritize worker safety and contribute to better business outcomes through optimization. Thermal energy storage. By storing thermal energy for future use, warehouse operators will improve their cost control while better managing their ongoing risks. Enhanced building envelope. The more a warehouse is sealed and insulated like an igloo, the more thermal energy it can store for future use. On-site renewables to sustain surrounding operations. The warehouse isn’t always a priority area for energy reduction initiative because it typically consumes far less energy than other building functions. But, what about energy production? Computational fluid dynamics (CFD) simulation. All areas of warehouse operations will become “smarter,” giving operators the data-backed insights needed
to take decisive action. This is especially true when it comes to making decisions about energy use. Destratification. Temperatures can vary at different heights inside the warehouse. By understanding and proactively addressing these variances, operators can reduce the volume of energy required to correct for hot or cold spots. Skylights. Warehouses of the future will increasingly take advantage of natural light to achieve industrial-grade illumination more efficiently. Lighting power density (LPD) reduction. Many warehouses sustain a light power density (watts of lighting per square foot of room floor area) that exceeds what’s actually needed in order to effectively perform required tasks. By recalibrating the LPD to suit the environment and what goes on inside of it, operators can reduce their overall energy use. Automation. Automation is often touted as the key to a highly efficient and quality-driven warehousing system, and that’s very true. Automation also offers improved safety. Fall protection. As warehouses transition to more a sustainable design, they will need to evolve their safety protocols to suit the new environment. Right-sizing. The most
effective way to design sustainability into a warehouse is to right-size that warehouse in the design phase or for existing buildings to assess and optimize the way space is allocated for both current and future activities. Flow simulation. Using computer models to simulate the flow of people and materials through the warehouse environment is already an important tool for forwardthinking operators and managers, and will become even more vital as enterprises push for ever more efficient and sustainable operations. Climate change, geopolitical unrest, a global pandemic— supply disruption can be sudden, extensive and potentially disastrous. This makes it all the more essential for companies in every sector to closely examine how their warehouses are operating—and how well. This isn’t only about facing the daunting challenges of tomorrow, though. It’s also about seizing on today’s tremendous opportunities to design warehouses that are part of a resilient, energy-efficient, safe and optimized enterprise ecosystem—that is, a fully sustainable warehouse, prepared and ready for a productive and thriving future.
ABOUT THE AUTHOR
ABOUT THE AUTHOR
JEFF WEGNER mechanical engineer CRB
SDC1220_36-37_[EF]Warehousing.indd 37
BRAD PRIZER industrial engineer CRB
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
37
11/23/20 5:07 PM
EXECUTIVE FOCUS
SOFTWARE & TECH
By Brielle Jaekel, Associate Editor
THE FUTURE OF CRYPTOCURRENCY
V
○ Authentic tracing is important for the future of supply chains.
isibility, traceability and data are prominent trends throughout the supply chain, as partners seek greater knowledge in their operations. Cryptocurrency is one method to tap into these trends, despite its reputation for being a form of currency, as its name denotes. The tech significantly help in authenticity practices and tracking. “Blockchain technology enables real-time data transparency and immutability, which protects individuals from bad actors, deceitful companies and vulnerabilities caused by human error,” ays Daniel Polotsky, cofounder and CEO of CoinFlip. The usefulness of cryptocurrency in the supply chain is significantly apparent, but it is only the beginning of its potential. “We already see many different
Oracle
38
companies investing in blockchain companies or partnering with blockchain-centric organizations,” says Jai Suri, vice president, IoT and blockchain applications development, Oracle. “There are also numerous consortia being set up to facilitate blockchain networks for financial transactions, which is a more complex use case, or to validate employment and education credentials. We are still in the early stages of blockchain adoption. “However, in the coming years we’ll see many applications of blockchain in supply chain and financial contracts and some traction in human resources,” adds Suri. Blockchain can be used for a variety of authentication processes such as detailing product origins, which can be as specific to include where materials have been sourced from and their conditions. It is even possible for companies to trace the authenticity of something like the results of a Coronavirus disease (COVID-19) vaccine. “The potential of detailed quality control records and origin information has the potential to dramatically reduce costs and preserve a company’s reputation when it comes to product recalls,”
Suri continues. “Furthermore, the temper-proof shared ledger can ensure counterfeits are not added between production and the customer. As smart contracts become the norm, blockchain will also improve the speed and efficiency of transactions and enable more automated processes in the supply chain.” Cryptocurrency is also used to improve monetization and revenue. “Some [companies] are looking [to blockchain] internally for auditing purposes,” says Denise McCurdy, vice president of blockchain governance at Government Blockchain Association. “Others are looking to monetize assets that we didn’t think to monetize to assign ‘slivers’ of new revenue to existing business models. And, of course, there is the supply chain workhorse use case— making sure that everyone in the ecosystem sees the secure chain of information. “This improved visibility and traceability can reduce counterfeits and losses from the gray market; prove compliance for auditing purposes; and of course, drive inefficiencies out of entire industries. If everyone knows the ground rules,” she adds.
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_38-39_[EF]Software-Tech.indd 38
11/23/20 5:17 PM
LA
De the “ nee exp blo can un “T sup “ we yea blo D cry thi
s
es
Oracle
SOFTWARE & TECH
LACK OF KNOWLEDGE Despite cryptocurrency’s newness, there can be drawbacks. “In the real world, firms will need a lot of knowledgeable expertise, well versed in blockchain technology, that can assist with the nuances and unknowns,” McCurdy adds. “These skills are currently in short supply. “We know blockchain works; we’ve had crypto for 10-plus years,” she says. “But, how well do blockchains work together?” Despite this lack of knowledge, cryptocurrency has been booming this past year in the supply
chain. And, COVID-19 sped up adoption even more so, like many other trends. “During a global crisis, it’s extremely important that supply chains are running smoothly and efficiently, especially when it means distributing life-saving products like PPE,” Polostky says. “Blockchain technology allows for the real-time sharing of important information, including location tracking and product indexing, so that we can ensure consumers get essential products when they need them.”
The future of supply chains lies with blockchain, as consumers and partners seek greater authenticity. The use of cryptocurrency will ensure legitimacy throughout the chain, even in a post-COVID-19 environment.
○ Blockchain can provide detailed traceability.
ly
g
e of
or e,
e
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
SDC1220_38-39_[EF]Software-Tech.indd 39
39
11/23/20 5:18 PM
EXECUTIVE FOCUS
PROFESSIONAL DEVELOPMENT
By Mackenna Moralez, Assistant Editor
COVID-19’S
ROLE IN THE FUTURE OF SUCCESSION PLANNING The Coronavirus pandemic is impacting the way that companies hire from within their organizations.
W
there are still positions that need to be filled. According to a survey conducted by the Adecco Group, nearly 70% of businesses that have furloughed or laid off employees during the pandemic will back-fill roles previously eliminated. While 40% of respondents are currently going through hiring freezes, nearly
Antonioguillem - Adobe Stock
hen the Coronavirus disease (COVID-19) pandemic first began in March, many faced economic uncertainties, as companies were forced to lay off or furlough their workforce. With no particular end in sight, the U.S. unemployment rate has plummeted to 10.2%, but
Nearly nine in 10 companies plan to hire back employees within the next year, despite being in a current hiring freeze due to the COVID-19 pandemic. 40
nine in 10 plan to re-hire roles in less than a year. In the same survey, 45% of respondents indicate that their organization is upskilling current employees, followed by 35% reskilling current employees to be redeployed to other areas within the company. As the pandemic continues, succession planning within organizations is only going to become more popular. “The talent challenges we often hear from our clients are focused on an impending retirement boom, a seeming decrease in employee intent to stay or loyalty to a company and a bench of talent that does meet their current or future capability needs. Most of these challenges are rooted in succession planning and management practices, and many supply chain leaders are waking up to this fact,” says Caroline Chumakov, principal analyst, Gartner Supply Chain Practice.
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_40-46_[EF]Professional Development.indd 40
11/23/20 5:30 PM
“ pan ch all na of cri wo the cri the ful can thi ma con
S
F G
PROFESSIONAL DEVELOPMENT
“More recently, the COVID-19 pandemic has pushed supply chain leaders to realize that not all critical roles are strategic in nature. There is another category of critical roles—roles that are critical to the success of essential workflows. The employees in these roles often do not have critical or scarce skills, but if these roles are not staffed and fully enabled, critical workflows can grind to a halt. For example, this might include roles in manufacturing or logistics,” she continues.
n
e
There are several benefits for organizations to use succession planning, Chumakov suggests. For instance, there’s a shortened cycle time in filling critical vacant roles and reduced lapse in business performance due to transitions. This can also help mitigate the risk involved when it comes to transition periods, as it can improve the likelihood of meeting business performance targets posthiring.
4 COMMON TYPES OF LEADERSHIP TRANSITIONS According to Chumkavo, there are four common types of leadership transitions. Replacing an icon. Transition activities will first be focused on building relationships that will help build support for the successor’s agenda. Following poor leadership. Initial focus areas will be on creating a clear vision for the organization and forging new relationships and repairing those damaged by past underperformance.
Cookie-cutter solutions to business problems don’t work anymore. At BGIS, we’re strategic thinkers that help you see change as an opportunity. We stop at nothing less than producing real results for your business, because we only succeed when your business does.
n
.
d y
www.SDCExec.com | December 2020 | SUPPLY & DEMAND CHAIN EXECUTIVE
SDC1220_40-46_[EF]Professional Development.indd 41
41
11/23/20 5:30 PM
PROFESSIONAL DEVELOPMENT
Rebuilding. Successful leaders focus on understanding the industry, organization and dynamics of their new team, while using existing networks and teams to socialize and drive change
However, there can be negative impacts that come from succession planning if not maintained properly. “There are risks associated with a poorly executed succession
transitions will have change management implications, as they can leave employees wondering how it will impact their role and the work they do. When
planning process. We might plan a strategic succession based on predecessor traits or capabilities, without much mind to what leadership capabilities might be required for the future,” says Chumakov. “There is also unconscious bias that can creep into our succession planning processes if not properly checked; this can lead to unsavory diversity, equity and inclusion outcomes. We might also be at risk if we fail to view critical roles and their potential successors at a portfolio level. This may mean that we neglect to deploy or align talent more strategically across the organization to achieve maximum business impact.” Regardless, leadership
succession planning, employers must be able to answer the following questions: What new initiatives might this leader introduce? How can employees deliver on this new leader’s expectations and goals? Could this change pose a risk in terms of potential career
By Monster Ztudio/Adobe Stock
Breaking ground (a newly created or rebranded role). Transition activities will be focused first on clearly defining the responsibilities and objectives of the role and gaining better understanding of the stakeholder universe. In order to ensure a successful transition, companies may focus on targeted development for successors. This requires support to new leaders by creating individual developmental plans that help guide them in learning experiences, such as interventions that are experiential, social or forma in nature. Chumakov suggests that these plans be reviewed and reflected upon on a quarterly basis. 42
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_40-46_[EF]Professional Development.indd 42
11/23/20 5:31 PM
SU PP LY C H A IN N ET WO RK SUPPLY CHAIN NETWORK SUMMIT
is the premier virtual event educating logistics professionals on the critical issues impacting – and driving – the global supply chain and logistics industry
NOW AVAILABLE ON-DEMAND: SUPPLY CHAIN THREATS NAVIGATING BUSINESS AMID THE CORONAVIRUS
his
STATE OF THE SUPPLY CHAIN INDUSTRY
n nd
IN-STORE VS ONLINE HOW TO HIRE, TRAIN & SPEAK TO TODAY’S YOUTH CANNABIS OVER STATE LINES
TO REGISTER VISIT: www.sdcexec.com/scn-summit
SDC1220_40-46_[EF]Professional Development.indd 43
11/23/20 5:31 PM
By Minerva Studio/Adobe Stock
PROFESSIONAL DEVELOPMENT
development and aspirations? “Improving the experience of change through leadership transition requires us to tailor our approach to the type of leadership transitions, provide greater transparency to our succession management processes and better prepare successors for the roles that they take over,” says Chumakov. Still, effective succession planning heavily depends on preparing successors for future roles. With supply chain employees continuing to work remotely for the near future, there will be new challenges associated with succession planning given the need to learn and develop in a virtual environment. “The pandemic has opened our eyes to new types of critical roles— ones that are not necessarily strategic in nature. So, while our succession management efforts have typically focused on preparing for vacancies in senior leadership positions, supply chain leaders will need to expand beyond this focus to develop succession plans for critical workflow roles,” says Chumakov.
Freight Audit & Payment Since 1923
ADVERTISER INDEX ADVERTISER...................................................... PAGE NUMBER Adexa......................................................................................... 41 Alpega....................................................................................... 25 Basware Inc............................................................................... 39 BGIS Global Integrated........................................................... 41 Clean Energy...............................................................................2 CT Logistics............................................................................... 44
V C
•
•
DSC Logistics............................................................................ 46 Schaefer Systems , Inc............................................................ 33 ShipHawk.................................................................................. 24
•
•
TechSera Inc.............................................................................. 23 West Liberty Foods................................................................. 13
44
•
SUPPLY & DEMAND CHAIN EXECUTIVE | December 2020 | www.SDCExec.com
SDC1220_40-46_[EF]Professional Development.indd 44
•
11/23/20 5:32 PM
op
n
Visit Supply & Demand Chain Executive online for • Digital editions of the magazine
Covering THE ENTIRE global supply chain ONLINE
• Channels of content specific to warehousing, procurement, sustainability, professional development and more
WWW.SDCEXEC.COM
• Upcoming educational webinars • Nomination information for the following industry awards: Pros to Know, SDCE 100, Green Supply Chain, Women in Supply Chain Award • Headline News e-newsletter subscription sign up • And more!
SDC1220_40-46_[EF]Professional Development.indd 45
11/23/20 5:32 PM
>
At DSC Logistics, we combine innovative solutions, collaborative partnerships and high performance operations to unlock the potential of your supply chain. We’ve joined with CJ Logistics, The Global SCM Innovator, creating Learn more at
an integrated global network with
D S C LO G I S T I C S .C O M / S O L U T I O N S
expanded capabilities.
SDC1220_40-46_[EF]Professional Development.indd 46
11/23/20 5:32 PM