Are you using Big Data Analytics in supply chain? Take our quick survey and enter to win a $100 iTunes gift card

 

Technology is enabling supply chain organizations to gather enormous amounts of information from an expanding variety of sources. But few companies are actually deriving sustainable value from the supply chain data they are accumulating. Instead, they are struggling with issues such as how to ensure data quality, how to analyze data, and how to make practical use of what they learn from it.

CSCMP’s Supply Chain Quarterly (DC Velocity's sister publication), Arizona State University, Colorado State University, Competitive Insights LLC, and lharrington group LLC are conducting an annual survey on the current state of supply chain Big Data Analytics. The survey will also allow us to track, in the aggregate, companies’ progress in using Big Data Analytics in supply chain management.

The survey is anonymous. The findings will be presented at the Council of Supply Chain Management (CSCMP) 2017 annual conference in September. Respondents who choose to provide contact information (which will remain confidential) will receive an early readout of the results prior to the conference. And, if you’re among the first 100 respondents, you’ll be entered in a drawing for one of two $100 iTunes gift cards!

Click here to participate in the survey

If you have trouble with the link above, please copy and paste the following URL into your web browser: http://colostate.az1.qualtrics.com/jfe/form/SV_bO98R0OrXZTnxYN

Our ability to provide supply chain professionals with meaningful data on this increasingly important topic depends on your participation. We thank you for your contribution, and we look forward to sharing the results with you later this year.

Big ideas on campus

For the past 10 years I have been a volunteer for the admissions office at my alma mater. Alumni volunteers hold informal meetings with applicants in their area, adding a personal touch to a process that can be intimidating to even the most qualified high schooler. Recently I met with six applicants who, as they always do, bowled me over—not just with their prodigious accomplishments, but also with their enthusiasm and commitment to learning, exploring, and achieving something big.

That kind of excitement and sky’s-the-limit enthusiasm isn’t restricted to high school students on the brink of entering college. Attend any university-sponsored event where students in logistics and supply chain programs showcase their research projects, and you’ll figure that out right away. One such event I regularly attend is the annual Student Research Expo hosted by the Massachusetts Institute of Technology (MIT) Center for Transportation & Logistics. The buzz and energy are apparent even before you enter the rooms where graduate students from the U.S., Asia, Europe, and Latin America explain their real-world business projects alongside posters displayed on large electronic screens. These students are older, wiser, and more experienced than the high school boys and girls I met last week, but they are no less enthusiastic, ambitious, or committed to reaching their goals.

The Talent Gap (capital T, capital G) has been one of supply chain organizations’ biggest worries for several years now. But they can take heart that there are more logistics and supply chain academic programs—and job-seeking graduates of those programs—than ever before. Many of those institutions put on events like the one I attend, hold case study competitions, or host career days where recruiters can meet prospective employees. Examples in the U.S. include big, well-known programs like Penn State, Michigan State, Georgia Tech, Auburn, Arkansas, Tennessee, and Ohio State, to name just a few. But there are a wealth of opportunities at other institutions you might not think of, including San Diego, Wayne State, Rutgers, Central Michigan, Northeastern, Wisconsin, Georgia College and State University, Rhode Island, and Syracuse—and that’s just a tiny sampling of the possibilities.

If you have not attended a supply chain student showcase, case study competition, or career fair at your local college or university, I urge you to do so. You’ll find it time well spent. Not only will you meet students who could be just the person your organization is looking for, but you’re also likely to come away with some inspiration and a renewed sense of excitement about this fascinating field we’re in.

The bimodal imperative

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?

Home delivery is not always easy

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.

Warming up for the supply chain

While I am writing this blog posting, my area in Pennsylvania is experiencing the first real snowfall of the year. Just a few inches outside now. This is mid-January already, and to say that we have had a mild winter so far is certainly an understatement.

For the most part, the recent holiday season was a big winner from a transportation and distribution standpoint. Absent were the hiccups parcel carriers experienced in 2013 when many presents arrived too late to go under the tree by Christmas morning. Parcel capacity has expanded over the past two years, which has been the biggest factor in avoiding the nightmares of the Ghosts of Shipping Past.

Yes, volumes were high – about 1.3 billion packages in December alone, but most products got to destinations on time. Retailers also have gotten smarter, which has resulted in making the volume easier to handle. Many online stores began promotions earlier and more often, which helped spread the Black Friday and Cyber Monday deals over several weeks instead of one weekend.

But even with these changes, a lot of credit for a successful shipping season must be given to El Nino, which gave us mild weather that broke records across the nation. The lack of snow meant planes were flying, trains were moving, trucks were not delayed, and products met promised delivery dates. Lower fuel costs were an added benefit. Certainly such mild weather is not something we can expect every year, but at least for this season, we will count our blessings.

May the Force Be With You: Are delivery droids better than delivery drones?

The first live-action movie that I saw was the original Star Wars. I was almost 4-years-old and had to sit on my knees to see over the heads to the people in front of me. From the moment that the opening credits scrolled across the screen with words that I could not yet read, I was hooked, and like many people of my age, Star Wars became my foundational myth.

So when I stumbled across this video a couple of weeks ago of lollipop-colored delivery robots, it delighted something deep within me. 

Israeli engineer designs grounded drone delivery service 

While the creator, Kobi Shikar, an Israeli engineer calls them “Transwheel Delivery Drones,” they looked to me more like something that would come out of George Lucas’s Industrial Light & Magic Studio. The video shows the unicycle (!) robots holding packages on their heads with robotic arms as they zipped down city streets and then using face-recognition technology to deliver the package to the correct person. (For larger packages, two or more would team up.) Yes! My heart responded. Yes! If R2D2 could deliver an appeal for help to Obi-Wan Kenobi living in his cave on Tatooine, why couldn’t a candy-apple droid deliver a box of socks to me in my triple-decker in Boston?

It’s appealing: the thought of a cute robot handing a package to you with a cheerful chirp and beep, instead of an whirring insect-like drone (with its militaristic overtones) dropping one down from on high. There seem to be fewer risks of from a small drone malfunctioning on the ground than an aerial one breaking down and dropping on someone’s head. We are used to AGVs in DCs delivering pick bins. It's an easy step to them delivering packages to consumers.

Yet, the adult me (who is more than ten times older than the me who saw Star Wars), is skeptical. Just how cost effective are these delivery drones? And how secure? What’s to stop a Jawa from waylaying a lonely drone and then selling it on the black market? What happens when a drone breaks down en route to a delivery? I want this technology to exist, but there are a lot of real-world issues that have to be figured out before Boston looks like Mos Eisley.

So it may take a while. (Indeed Shikar believes the first applications could be not in delivery networks but at airports and military bases.) In the meantime, I have a four-year-old daughter of my own, and The Force Awakens opens in just a couple of short months.

University on wheels

Last month I attended the Material Handling and Logistics Conference in Park City, Utah. In my opinion, this is always one of the better industry events held each year. It always has high caliber content on supply chain operations, with the emphasis on distribution and material handling systems. And the mountain scenery is also easy on the eyes.

 

The MHLC is organized and sponsored by the folks at Dematic. One of the events in the conference program this year was a tour of the Dematic manufacturing facility in nearby Salt Lake City, which featured the latest lines of Dematic material handling systems.

 

Dematic used the tour to also showcase its Dematic University Mobile Training Unit, which had arrived in Salt Lake City to coincide with our visit. The Mobile Training Unit basically consists of two tractor-trailers that are stuffed full of conveyor and sortation modules designed to train the operations and maintenance personnel of customers using Dematic equipment. This technical training center on wheels travels the country between customer sites. Each equipment module is mounted onto its own wheels so that it can be quickly offloaded and wheeled into the customer site for the training sessions.

 

A key benefit for the customer is that they do not have to shut down their own conveyor and sorting units in order to conduct training – operations can hum along as normal while the training occurs in a space that is away from causing disruptions.

The equipment modules are also designed to work on standard 110-volt outlets so that no additional power needs to be run for them. They can quickly be put in place and powered without extra assembly or installation. The modules are also self-contained with everything that might be needed typically by a conveyor or sorter system, such as air, motors, electronic sensing, and controls.

 

According to a Dematic brochure, the units brought to a customer site include transportation and accumulation conveyors, motorized rollers, segmented belt on roller, right angle transfers, and curves. We also saw a sliding shoe sorter module there. The units can be disassembled to demonstrate belt changes, motor replacement, preventative maintenance procedures, and more. The training program can be customized according to the needs of the host company and the equipment they have installed or are about to install. Dematic says that the training is also augmented with video and e-learning instruction.

 

In an age where keeping systems up and running is crucial to any operation, having this type of mobile training available for customers just makes a lot of sense. It is a good example of a systems manufacturer responding to the needs of its user community.

Risky business

I was in Europe a few weeks ago visiting several distribution facilities for future articles in DC Velocity. While in one warehouse in Belgium, I noticed a stack of fliers in the area where delivery drivers check in. What was odd was that the fliers were warning of the risk of theft of the goods they haul.

 

Drivers always need to be aware of the security of their goods with which they have been entrusted, but this warning seemed far beyond the normal amount of caution required. The flier displayed a picture of a truck being opened while it was moving at high speed. Apparently a group of thieves in this part of Europe, including Belgium, are pulling up to the rear of moving trailers, walking onto the hoods of their own vehicles, breaking the locks, and opening the trailers to remove goods.

 

I mentioned this to some of our editors who are our experts in covering the trucking industry and was told that incidents like this have also occurred in the United States. Apparently in one occurrence, the thieves drove a truck backwards at high speed so that the bed of their truck was within a foot of the rear of a trailer for easy pickings.

 

Possibly the use of rear cameras can help to reduce this threat. Regardless, it seems that if thieves are willing to take risks like these, it is nearly impossible to secure all freight 100 percent of the time. Being ever vigilant is about all that we can do.

The high cost of not caring

In my first job after college, I worked in the ocean shipping industry. One of my responsibilities was to arrange transportation of hazardous materials, including verifying that they were properly classified, marked, and documented. As part of my training, I attended a safety seminar designed for shipping line employees, freight forwarders, and stevedores. The Coast Guard officer who presented the seminar began by dimming the lights and projecting a photo of a large cargo ship on a screen at the front of the room. Suddenly the slide changed; in the next image the ship had been blown to pieces, with chunks of steel flying through the air and a huge fireball and black smoke filling the sky above what was left of the hull. “This is what happens if you don’t do your job right,” the officer said. “Take it very, very seriously. People will die if you don’t.”

That was nearly 40 years ago, and I have never forgotten that image or the instructor’s warning. They invariably came to mind each time I handled a hazmat shipment during the 10 years I was an export traffic manager. And they were front of mind again earlier this month, when an explosion that originated in a hazardous materials warehouse destroyed a large area in and around the port of Tianjin, China.

For anyone involved in international trade, the news photos of 40-foot ocean containers that had been twisted, crushed, and tossed like empty soda cans by the blasts were shocking. But that is a truly minor consideration compared to the loss of human life and the innumerable injuries suffered by people who lived nearby.

Which brings us to the title of this post. Because someone—business owners, real estate developers, local government officials, maybe all of the above—did not take the risks of storing and transporting hazardous materials very, very seriously, companies were allowed to construct apartment and office buildings dangerously close to huge quantities of those materials. And because someone—the warehouse operator, and perhaps its customers—did not care enough to do everything possible to eliminate those risks, hundreds of people are dead, injured, or missing.

Safe handling of dangerous goods in transport and storage requires appropriate training, strict discipline, constant vigilance, ferocious attention to detail, and an unflagging commitment by every employee at every point in the supply chain to follow the rules and always do the right thing—no matter how difficult, costly, or time consuming that may be. It is challenging, of course, to enforce such practices across supply chains that span the globe. But as the events at Tianjin make painfully clear, failure to do so could have tragic consequences.

Distribution across the Pond

I was in Europe last week looking at five effective distribution centers, three in Germany and two in Belgium. While DC Velocity primarily reports on things going on here in North American distribution, it is also important for us to share the worldview.

 

Europe has always been very advanced in warehouse technology. Many of the industry’s leading automation companies are based on the continent and there tends to be more automation overall in Europe than here at home. There are two important reasons for this. First, land is more scarce and expensive there, especially in Western Europe. Automation helps companies reduce the footprint of their buildings. Secondly, labor is also more costly. Automation helps there too to reduce manpower and save on overall distribution expenses.

 

Four of the facilities I visited store products very densely in several variations of automated storage systems, including shuttle systems, miniloads, and automated storage and retrieval systems. Two of the facilities operate AS/RS systems inside freezer environments, saving people from having to work in such harsh environments.

 

I also saw a couple of iterations of goods-to-person picking systems that handle a variety of products from cosmetics to auto parts.

 

I will be sharing these stories in future issues of DC Velocity. I also shot videos in four of the facilities, which will be used in upcoming episodes of our popular Move It! program. This will allow you to see some of these sophisticated systems in action.

 

And speaking of seeing distribution operations from elsewhere, Toby Gooley and I will be visiting some facilities in Japan later this year – again, with the goal of helping our readers to see what is going on elsewhere in the world. Stay tuned.