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The bimodal imperative

By Toby Gooley | July 19, 2016 | 2:41 PM | Categories: Supply Chain

In May I attended Gartner’s Supply Chain Executive Conference in Phoenix, Ariz. The conference sessions covered everything from software to sales and operations planning to supply chain strategy and much, much more. (I suspect I wasn’t the only one who wanted to clone myself in order to attend more sessions.) There were numerous opportunities to learn from Gartner analysts, technology providers, and supply chain leaders from a wide range of industries. And, of course, the event featured announcements of Gartner’s Top 25 Supply Chains list as well as their annual “Magic Quadrant” assessments of software and logistics service providers.

There were so many sessions, topics, demonstrations, and discussions packed into each day of the conference that it would be hard to identify a single, overarching message. But if I had to focus on just one, it would be this: to succeed in business now and in the future, you need to follow two distinct supply chain paths.

Gartner calls this principle the “bimodal supply chain.” Here—in very simplified terms—is how Chief of Research David A. Willis described it in his opening keynote. You can think of Mode 1 as analog and designed for stability, efficiency, and operational excellence. Mode 2 is digital and designed for agility and innovation—an approach supported by advanced analytics, automation, and connectivity. A company that follows both paths will be “industrialized and innovative, lean and effective but agile,” he said.

The digital side of the supply chain will encompass e-commerce, the Internet of Things, predictive analytics, “big data,” machine-to-machine communication, and demand sensing, among other things. Algorithms will rule the day, and data scientists, analysts, and information technologists will become an integral part of supply chain organizations, Willis predicted.

Does this mean the end of “old school” supply chain management? Definitely not. Willis emphasized that the digital and analog sides of supply chain operations are not in competition; rather, they are complementary and should work together. He cited the example of the home goods retailer Williams-Sonoma, which now derives half of its revenue from online business. The company had to devote considerable resources to adapting its supply chain and its information technology resources to serve that channel, but it did not sacrifice growth in its brick-and-mortar retail channel or disrupt its traditional operations.

The “bimodal supply chain” is catching on as a management strategy, becoming a guiding principle for companies like HP, Schneider Electric, and Discount Tire. Gartner, of course, has a vested interest in pushing the concept; the more companies buy into it, the more opportunities to sell its advisory services and research papers on the topic. But the bimodal supply chain is neither a gimmick nor an empty promise. In fact, it makes perfect sense for companies in almost every industry. Who could argue with a strategy that encourages supply chain organizations to prepare for the data-driven business of the future while reinforcing the value of good, old-fashioned operational excellence?

Truck drivers will be replaced by autonomous vehicles within 10 years, former Facebook executive warns

By Ben Ames | July 13, 2016 | 8:05 PM

The relentless drive of Silicon Valley startup companies is on track to make the truck driving profession obsolete within a decade, according to a former Facebook executive who recently published a tell-all memoir about his years at the huge social media firm.

Speaking in a radio interview with Boston’s WBUR on July 13, author Antonio García Martinez discussed his business book "Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley."

Named for a software application used by the online movie-rental company Netflix to model the impact of unpredictable events on its ability to stream movies and TV shows to its customers, the term “chaos monkeys” also describes the futility of predicting which tech startups will succeed and what impact they will have on society, he said.

“Just imagine a wild monkey rampaging through a large computer center, kicking over boxes and pulling on cables. Silicon Valley right now is sort of like the zoo where the chaos monkeys are kept,” Martinez said on WBUR’s On Point program.

“They run around society and they pull the plug on things like taxis, and they ship an app called Uber, where anyone can become a taxi driver. Or they pull the plug on hotels and anyone with a spare bedroom or a weekend cottage can suddenly become an innkeeper [with Airbnb],” he said.

Driven by that creative instinct, waves of technology startups are sweeping through American society, “pulling the plug” on many traditional industries in a frantic search for the next great business success. However, no firm has the motivation—or even the capability—to forecast how its invention will affect the personal lives of fellow citizens, he said.

“Consider what will happen to truck drivers when autonomous vehicles are standard; and that’s going to happen in 10 years,” Martinez said. “If you look at a map of the most popular job in every U.S. state, for a large number of states, truck driving is the most popular profession—it’s the one way that non-college educated people can make a good living--and that’s going to go away in 10 years. That’s not going to exist as a job in 10 years. And nobody is thinking about that. I think that’s going to be a real problem down the line.”

Quoting the venture capitalist and former Netscape founder Marc Andreessen, Martinez predicted that the future will soon hold only two types of jobs—you’ll either tell the computer what to do, or you’ll be told by the computer what to do.

“I think that will be the reality for a large swath of the economy, and what happens in that world is a real question. There are not going to be jobs for a lot of people in this economy within 10 to 20 years,” Martinez said. “When the chaos monkeys visit, it’s a question of is your life going to be the same before and after?”

Engineers refine safety standards as collaborative robots enter the warehouse

By Ben Ames | May 12, 2016 | 12:02 PM

Now that robots are becoming a common sight in many warehouses, logistics companies face a new challenge—how to design their robots and train their employees to work together in safe, productive teams? That issue was a central topic last week at the RIA’s International Collaborative Robots Workshop, held in Boston May 3 and 4.

The traditional standard for ensuring safe relations in mixed human/robot workplaces has been to encase the robots in cages, isolating them to guarantee they would not crush a human worker’s hand or roll over his foot. A slightly more flexible approach set safety distances, so that robots run slower—or even stop—as humans cross light curtains and cross into pre-determined danger zones.

However, those approaches become unwieldy as robots increasingly move around the warehouse, shuttling merchandise from point to point. So the latest strategies involve power and force limiting, Roberta Nelson Shea, global marketing manager for safety components at Rockwell Automation, said in a session at the conference.

Engineers are drafting design standards through the International Organization for Standardization (ISO) that will govern how quickly robots can move when sensors show they are near various points of the human body. For example, a moving part might slow slightly when it is near a worker’s leg, but move nearly to a stop if it s near a human’s face or neck.

These safety steps can allow warehouses to achieve better productivity by using collaborative robots—known as “Cobots”—to work alongside humans. Depending on their proximity, designers can also adjust the robot’s payload limit, speed, reach, arm stiffness, and force sensors, said Corey Ryan, manager of medical robotics at Kuka Robotics Corp.

For example, one of Kuka’s robots that works on the dishwasher assembly line at a Maytag plant features a safety feature that will automatically stop the robot in the midst of any task when a person touches the robotic arm. When the employee touches the arm again, the robot resumes its work.

Additional ISO standards require robot manufacturers to install redundant software and sensors to ensure they stay within those parameters, Ryan said.

As robots emerge from their cages and begin to collaborate with human colleagues, designers can use a variety of standards to deliver the ideal level of collaboration, said Nicolas de Keijser, of ABB Robotics. This can range from:

  • no collaboration (with the robot secured behind a safety fence),
  • fenceless operation (allowing robots to move without physical safety structures separating them from workers),
  • sporadic interaction (where human occasionally reload a machine, or feed materials in and out of the workflow)
  • open co-working (where the robot constantly interacts with human employees).

Whether robots are serving to assemble devices, test products, deliver tools, move pallets, or swap parcels with a conveyor, these mechanical colleagues are here to stay. Collaboration between human employees and their robotic collaborators could be the beginning of a beautiful friendship.

Beyond the bottom line

By Toby Gooley | May 02, 2016 | 1:17 PM

 

Each month DC Velocity publishes a brief news item variously titled “Good deeds,” “Logistics gives back,” or (when we’re feeling a bit silly) “Monthly mitzvahs.” These articles list some recent public service activities and charitable donations by companies in the logistics, material handling, and supply chain space. Some sponsor fundraising events like golf tournaments or road races; others donate money, supplies, and/or their employees’ time and labor to local or national charities. Whether small or large, in cash or in kind, these donations can make an appreciable difference to nonprofit organizations.

Over the years that we’ve been collecting that information, it’s become clear that a significant number of businesses in our field have made such “good deeds” part of their corporate culture. Gina Manis-Anderson thinks more companies should do the same—and that if they did, they’d find that the benefits flow in both directions.

Manis-Anderson, a former supply chain executive, is the co-founder and CEO of Savii Group. The firm acts as a buyers advocate to help companies find hidden savings across dozens of product and service categories and is paid based on the amount of money it saves its clients. But Savii offers them something more: the opportunity to direct some of its performance fees to a nonprofit of the client’s choice.

Savii calls this “Foundraising” (a term the company has trademarked) because the donations do not cut into a company’s bottom line; instead, they come from savings uncovered through better management of indirect expenses, including the procurement of supplies and services. Among the companies that have taken advantage of this arrangement are Ulta Beauty Supply, Baker Electric, and Century 21.

Manis-Anderson and her colleagues say they can document that companies achieve a measurable return on investment when they use the financial resources they’ve freed up through smarter spend and supplier management to fund initiatives that matter to their company, their employees, and their community. It’s powerful, she says, when CEOs say to people, “I don’t need you to cut your budget by a million dollars. I want you to find a million dollars so you can not only do your job better, but also make the world a better place.”

The supply chain and procurement functions are well suited to help a business that aims to “marry profits with purpose,” as Manis-Anderson puts it. After all, eliminating waste, improving efficiency, and supporting profitable growth are all part of a supply chain organization’s charge. From what I can see, you don’t have to work for a huge corporation to do as Savii’s clients have done. If you’re going to provide your company with “found money,” why not use some of that windfall for a good cause?

Two books pull back curtain on "logistical magic" of modern life

By Ben Ames | April 25, 2016 | 1:44 PM

Most citizens of the global economy take logistics for granted, not pondering how their purchases arrive on their doorsteps as long as each parcel arrives cheap and fast.

Two books that have hit retail shelves in recent months may change that, however. The first examines the “logistical magic behind every trip we take and every click we make,” while the other takes a critical look at the crumbling status of American infrastructure like roads and bridges.

In Door to Door: The Magnificent, Maddening, Mysterious World of Transportation, author Edward Humes digs into “the hidden and costly wonders of our buy-it-now, get-it-today world of transportation.”

Humes uses interviews and data to explore the impact that ports, traffic-control centers, and research labs are having on our transportation future. He looks at the complex movements of humans and goods from multiple perspectives, such as the increasing number of Americans who live without cars and the great distance UPS goes to deliver a leopard-printed phone case.

Finally, the author makes the whole equation personal by tracking one day in the life of his Southern California family, examining their commutes, traffic jams, grocery stops, and online shopping excursions.

In The Road Taken: The History and Future of America's Infrastructure, author Henry Petroski takes a sobering look at the state of American roads and bridges.

He quickly concludes that our infrastructure is at a crisis state, citing The American Society of Civil Engineers for its recent dismal grading of U.S. roads (D) and bridges (C+). Most alarming, the society described 65,000 American bridges as "structurally deficient."

Better maintenance is essential to America's economic health, he argues. And that judgment will affect everything from interstate highways—with their attending guardrails, stop signs, and traffic lights—to local civic features such as potholes, gutters, and curbs.

Of course, supply chain professionals work with many of these challenges every day. But thanks to these two new additions to the neighborhood bookstore or e-commerce cart, our friends and family may finally gain a better appreciation of what truly happens behind the curtain of global logistics to make our modern world go ‘round.

Five steps to choosing a conveyor

By Ben Ames | March 24, 2016 | 7:00 AM

Choosing a new conveyor is a harder job than it looks. Any warehouse manager who has purchased new conveyor equipment in recent years knows that outfitting a facility with conveyor equipment demands a crash course in recent technology advances, a spreadsheet to balance the benefits of different options, and an accounting degree to pick the best payment plan.

Now a new infographic from Dorner Manufacturing Corp. of Hartland, Wisc., simplifies the process by presenting a graphic display describing “Five easy steps to choosing a conveyor.”

The diagram offers answers to some of the most frequently asked questions the vendor hears from its customers, including:

  • environmental influences (such as wipe down and wash down)
  • configuration (options for layouts and design types),
  • size range (matching the conveyor equipment to the material handling needs in your DC),
  • motors and accessories, and
  • choosing a belt type.

Check out the infographic for a quick lesson in the components and pieces of a conveyor, the options and configuration varieties available for each part, and the ideal context and product for that specific element.

Why minority suppliers belong in your supply chain

By Toby Gooley | March 03, 2016 | 12:47 PM

What do you look for in a supplier? Quality products and services, favorable pricing, reliability, flexibility ... the list of possibilities is a lengthy one. Joset Wright-Lacy would like supply chain professionals to add something to that list that they often don’t consider: a supplier’s ownership.

I recently spoke with Wright-Lacy, a Georgetown-educated lawyer who formerly was vice president of procurement and property services for a major telecom company and currently is president of the National Minority Supplier Development Council (NMSDC). The nonprofit organization’s mission is to advance business opportunities for certified minority business enterprises, or MBEs. NMSDC certifies MBEs owned by U.S. citizens who are Asian, Black, Hispanic, or Native American, and connects them with its 1,200 corporate members, whose ranks include many of the country’s largest and most influential companies. The group also offers a wide array of educational and other services to its members.

In my most recent monthly column for DCV’s sister publication, CSCMP’s Supply Chain Quarterly, Wright-Lacy discusses the benefits of considering not just value and the best price but also minority ownership when selecting a supplier. Number one: “When supply chain decision makers look at what’s available in the marketplace, including minority suppliers … they can pick suppliers knowing that all of the talent and innovation, not just some, is available to them,” she said.

To read more of Wright-Lacy’s compelling argument in favor of the business and economic benefits of working with minority suppliers, read Why minority suppliers belong in your supply chain“Why minority suppliers belong in your supply chain” at www.supplychainquarterly.com.

Augmented reality could be latest software tool to accelerate warehouse work

By Ben Ames | February 25, 2016 | 11:37 AM

Warehouse managers have looked to software for decades in search of faster ways to handle materials and fulfill orders.

DCs have deployed major platforms like warehouse management systems (WMS) and labor management systems (LMS) as well as complex robotic solutions like automated storage and retrieval systems (AS/RS) and Amazon.com’s Kiva Systems robots.

Now the latest wave of supply chain software solution takes a different approach. Instead of bringing data analytics and robotics to bear on the flow of goods, this new strategy focuses on the junction between workers and the materials they handle.

Augmented Reality (AR) is a technique of overlaying simple objects with digital images and metadata. Casual viewers wouldn’t see these new layers of information, but workers equipped with smartphones, tablet PCs, or Google Glass-type video-eyeglasses can see extra layers of digital information tailored to every object.

At first glance, the technology sounds similar to virtual reality (VR), the approach of creating fantasy worlds visible only through three-dimensional goggles or headsets, a recent Boston Globe article points out.

But augmented reality stays focused on real-world objects, enhancing them with helpful information that can funnel instructions to a worker in a DC, warehouse, or factory. Viewed through a smartphone or other platform, a case or pallet tagged with AR could be labeled with its unique identity, destination, and schedule.

One of the top early suppliers of AR systems is the product design software firm PTC Inc. of Needham, Mass. The company plans to help its customers build the technology into millions of commonplace items, from factory equipment to cars to home appliances, the newspaper said.

PTC took a large step forward in crafting new AR applications in 2015 when it paid $65 million to acquire the software firm Vuforia from Qualcomm Corp. By combining Vuforia’s technology with its own engineering software, PTC hopes to spread the use of AR far beyond current sectors such as gaming and consumer products, applying the approach to automotive, aerospace, industrial, and retail businesses.

Combined with product analytics and Internet of Things (IOT) software architecture, AR could quickly deliver a way to help design, monitor, and control products, and to instruct technicians in the appropriate methods of use and service, PTC says.

Home delivery is not always easy

By David Maloney | February 02, 2016 | 5:43 PM | Categories: Supply Chain, Transportation

I have been playing tag of sorts with my parcel delivery company.

Since I work from home most of the time, my son felt it would be wise to have packages intended for him requiring a signature sent to my home instead of his own. He, of course, is not present when most parcel companies come calling, so this seemed a reasonable request.

However, it has not always worked out. I travel a good bit in my job as chief editor, so I am not always home when the parcels arrive. Also, it appears my delivery driver has weak knuckles, as he claims he knocks on my screen door, but I do not always hear him. I have even tried putting a note on the door to request that he knock loudly enough so that I can hear his bidding even when in my office or another room of the house. I really don’t have time to camp at the front door to await his arrival, which is never at a consistent time.

I even told him to open the screen door and knock on the wooden door itself, but he claims he cannot do that. Once, he said, a customer’s screen door “broke” and he was accused of causing the damage.

I can hardly blame him though. Drivers are often under tremendous pressure to stick to time schedules. They don’t want to spend time knocking on doors. I think they also assume that someone is not home. I know that they never knock if a signature is not required – they simply leave the package on the doorstep.

As a father, I don’t want to disappoint my son. If I fail to hear the parcel carrier’s arrival, then it means he has to try delivery again. After a few attempts at non-delivery, for example if I am traveling several days in a row, the package has to go back to the sender or else I have to drive 45 minutes each way to the distribution center to pick up the parcel or pay for it to be re-delivered the next day. I realize there are alternative programs that parcel companies now offer (usually for a fee) which will wave the signature if no one is at home. But that cannot be done for some items, as either an adult is needed to sign for the product, it has too much value to simply leave it on the doorstep, or the sender requires the signature as definitive proof of delivery.

So, there has to be some alternatives for home delivery. For instance, why doesn’t this parcel company leverage its store franchises when a signature is required? I would gladly pick it up there, but I don’t want to pay the fee for something that is really their convenience, not mine. Another solution would be to install delivery kiosks located in strategic parts of the community, such as a grocery store, mall, department store, etc. This solution has worked well in other parts of the world, but has not yet taken root in the United States for some reason. Picking it up at a kiosk and leaving an electronic signature would be a snap compared to playing hide and seek with the deliveryman.

Kiosks would also eliminate the most expensive part of the delivery - those last few miles getting it to my home. That’s especially important for shippers who are under pressure to offer next day delivery (or soon same day delivery) for free. Maybe some day a kiosk solution or alternative delivery method will save my deliveryman’s knuckles from bruising.

Buggy WMS software hits sneaker retailer with $32 million sales loss

By Ben Ames | January 29, 2016 | 1:14 PM

The next time anyone in your company downplays the importance of supply chain software, pull out a copy of the “Third Quarter Fiscal Year 2016 Results” from The Finish Line, Inc., an Indianapolis-based retailer of athletic shoes, apparel, and accessories.

Earnings reports generally make extremely dull reading, but logistics industry professionals will flip through this one like a spy thriller novel from an airport bookstore.

Skip to the chase scene, and you will discover that the company recently installed a new warehouse and order management system which apparently disrupted its entire supply chain, triggering $32 million in lost sales over a 13-week period, the shuttering of 150 stores (representing one-quarter percent of the company’s branded retail outlets), and the reassignment of the company’s CEO to a seat on a board of directors.

“Our third quarter performance was severely impacted by a disruption in our supply chain following the implementation of our new warehouse and order management system,” outgoing CEO Glenn Lyon said in the Jan. 7 statement. The report covered a period spanning the 13 weeks ending Nov. 28, 2015, and featured a bottom line with consolidated net sales of $382.1 million—a decrease of 3.5 percent over the prior year period—and a slump in comparable store sales of 5.8 percent.

“Specifically, in October, we began experiencing issues flowing fresh inventory into our stores as well as fulfilling online orders as the new system was unable to process freight at volumes necessary to support our sales plans,” Lyon said. “We worked quickly to address the disruption in our system and improve our operating capabilities, increasing technical and operational resources including third party experts… We anticipate that we’ll return to a stable operating environment during the first quarter and we will start leveraging the multiple benefits from our supply chain system enhancements.”

In a separate announcement on Jan. 7, Finish Line said that company president Sam Sato will succeed Lyon as CEO on Feb. 28. In turn, Lyon will remain on the company’s board, but will transition to the role of non-executive chairman of the board beginning Jan. 1, 2017.

Although it plans to cut its line of branded retail stores from 600 to 450, Finish Line will continue its relationship with Macy’s, which allows it to reach a current total of 1,010 Finish Line retail locations, located primarily in U.S. malls and shops inside Macy’s department stores.

In addition to fixing its software SNAFU, the company’s future challenges will include fine-tuning its omnichannel strategy to allow it to keep prices low while delivering goods quickly, according to a Wall Street Journal article on the quirky earnings report.

Neither the Finish Line press release nor the newspaper story cited the specific problem with the WMS or indicated which vendor had sold the faulty system.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

Thoughts from our editors.



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