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.

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.

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.

J.B. Hunt study shows ways to boost trucking efficiency

Logistics partners in every part of the supply chain are in a constant hunt to increase driver utilization and optimization in trucking fleets—whether their own, their partners’, or their 3PL’s.

Now a white paper from J.B. Hunt Transport, Inc. says one solution for wringing maximum efficiency out of the Hours of Service regulations covering the legal driving limits for commercial motor vehicles (CMVs) may be right under our noses—inefficiencies at the loading dock.

Breaking down the math around the DOT-regulated driver’s “on duty” day of 840 minutes (14 hours), the report shows how quickly those minutes can drain away. The rules require a 30-minute break and 150 minutes for everything else a professional driver does, including pickup, delivery, safety inspections, and shutdown.

A quick calculation shows that leaves just 660 minutes of actual driving time per day, but surveys show most drivers fall far short. The J.B. Hunt report cites figures showing that a typical driver loses valuable time on activities such as empty drive time, appointment inflexibility, and time spent at the shipper or receiver location. Multiply that over many loads, and there’s no mystery what happens to missing capacity.

The paper points out ways to avoid those wasted minutes, such as:

• shave down loading and unloading times
• utilize a drop-and-hook strategy strategy instead of live unloading
• push back against rigid pickup and delivery times
• shrink shut-down time by asking shippers to provide onsite parking and amenities
• furnish a more predictable schedule to avoid cancellations, short lead times, multi-stop loads and other headaches

To read the full whitepaper, check out http://blog.jbhunt.com/wp-content/themes/files/pdf/660_Minutes.pdf.

On track in Texas

Yesterday I was in Pharr, Texas working on a print story and a video at a company called McCoy’s Building Supply (look for this story in an upcoming issue of DC Velocity). As the name implies, McCoy’s provides lumber, hardware, shingles, blocks, and a full range of other building products to construction firms from over 80 locations throughout five southern states. I was there to look at their use of Toyota lift trucks, particularly in moving the heavy loads within their yard.

 

The Pharr facility does a little of everything. It serves as a distribution point for other McCoy stores in south Texas and there is also a retail store attached to the lumberyard that provides hardware and other home improvement products to do-it-yourselfers.

 

What struck me as uncommon about this facility was that it had a rail spur in its yard. While rail is often used to supply manufacturing facilities, few distribution operations in the U.S. have rail connections. Two flatbed rail cars had been dropped off onto the spur the night before I visited. Heavy-duty pneumatic-tire lift trucks were used to quickly unload the cars the following morning, taking advantage of their ability to access the rail cars from both sides.

 

Of course, a lot of freight moves by rail in North America. It is the most cost-effective ground transport available to shippers. Most rail loads, though, have to transfer to trucks to reach a D.C. Having a rail spur in their yard allowed McCoys to purchase full train car loads, which gave them better pricing and saved on freight. The product is then distributed to other local McCoy’s stores.

 

Possibly in the future we will see more distribution networks designed to better take advantage of direct connections to rail, gaining the efficiencies and cost savings found with being on-track.

New for you

I am writing this blog from the Spring meeting of MHI being held in Charlotte, N.C., where today two new industry groups were created to better serve you.

For those not familiar with MHI, it is the largest trade organization serving the material handling industry. That is its traditional role, but MHI has expanded its borders over the past couple of years to extend to all facets of the supply chain. The two new groups owe their incarnation to the realization that the industry has changed and so have the needs of end users who rely on solutions from system providers.

While MHI is the entity that encompasses many disciplines, within the organization are sub-sets known either as Product Groups or Solutions Groups. The Product Groups are composed of member companies that make similar specific technologies, such as automated storage systems, racking, hoists, lifts, and conveyors. Though competitors, they collaborate together within MHI to conduct research into industry trends and customer needs, as well as they provide education and resources to strengthen their portions of the industry as a whole and to independently develop products that better serve the marketplace.

Similarly, Solutions Groups consist of competing solutions providers who cooperate to share knowledge and information, while addressing trends and challenges facing their customers.

The two new Solutions Groups birthed today came from former product groups that had moved beyond their initial scope. Recognizing a need to better serve and interface with end-users, these groups were established to be the “go to” authorities for customers seeking solutions to their problems.

The former Integrated Systems and Controls (ISC) group has now become the Automated Solutions Group (ASG). More than a name change, the new direction of the group is to identify needs through research, educate the industry and end users about automation, and provide solutions that address industry trends.

Similarly the former Supply Chain Execution Systems and Technologies (SCE) group has been shuttered to make room for the Information Systems Solutions Group (ISSG). These folks will focus on educating the industry on software trends and how information systems connect the varied data streams of the supply chain.

Both new industry groups will be conducting industry research and thought leadership in the coming months and both plan educational presentations as both the MHI Fall meeting held in October in Ponte Vedra, Fla. and at Modex in Atlanta next April.

DC Velocity is a member of both of these Solutions Groups. Look for further updates from us on how these two new groups are designed to better serve you.

A healthy industry - for sure

It has been just over a week since all of us at DC Velocity have come home from ProMat and we’ve had some time to reflect on this year’s show, which is always one of the top conferences in the supply chain industry.

This year, more than 800 exhibitors were on hand to show off their wares in the huge hall at Chicago’s McCormick Place, and over 30,000 people attended the four-day show. The biggest impression I walked away with this year is that we are in a very healthy industry. Supply chain has shaken off the rust of the Great Recession and has more than made up for six years of barely keeping above water. I believe we are poised for great things ahead.

Plenty of intriguing technologies were on display during ProMat, as well as the latest in software offerings. During the show, DC Velocity editors held over 80 meetings with exhibitors and attendees. We produced more than 60 articles of ProMat coverage. If you could not make it to the show, you can find information on many of the leading technologies on display as well as select conference sessions held at ProMat here:

http://www.dcvelocity.com/conference_reports/promat2015/

We also produced 10 videos highlighting some of the latest solutions found in the exhibits. You can view those videos here:

http://www.dcvelocity.com/dcvtv/profiles/

Additionally, DC Velocity recorded video interviews at our in-booth studio with many industry leaders as part of our continuing Meet the Rainmakers series. These will be released over the next two months. Look for those videos in our This Week on DCV-TV newsletter.

I would like to express my thanks to the many people our editors met with during ProMat for helping us to provide such extensive coverage to DC Velocity readers. See you all at Modex next year in Atlanta.

Will smart robots take your job?

Technology in logistics is replacing jobs traditionally done by humans, the trend and will continue at a record pace for the foreseeable future. Many have grown accustomed to seeing this kind of thing in certain industries like manufacturing, healthcare, and logistics. But now, according Professor Edward D. Hess of the University of Virginia's Darden Graduate School of Business, technology will be coming for white collar jobs, too.

"Technology will be replacing more jobs at an ever-increasing pace, particularly with this next round of technology, which includes artificial intelligence. AI is the game changer," says Hess, author of a new book Learn or Die: Using Science to Build a Leading-Edge Learning Organization (Columbia Business School Publishing, 2014, ISBN: 978-0-231-17024-6, www.EDHLTD.com). "It is the biggest discovery since fire! It effectively threatens to wipe out a whole new group of jobs, including white collar positions."

His assertions are supported by a recent University of Oxford study that found over the next 10 to 20 years, of full two-thirds of U.S. employees have a medium-to-high risk of being displaced by smart robots and machines powered by artificial intelligence.

So, what can you do to keep your job?

"When the AI tech tsunami hits, the only jobs that will be safe are the ones that require a human element,” says Hess. “The things that humans will be able to do better than robots is creative, innovative, and complex critical thinking and engaging emotionally with other humans. You must take up your skills in these areas in order to make yourself more irreplaceable."

His advice on the skills sets that will strengthen employability in the rise of smart machines include:

• Overcome cognitive blindness. Humans have a problem when competing with smart machines. We are lazy, sub-optimal thinkers, Hess says. We seek to confirm what we already believe, and we tend not to be open-minded or rational. We take what we already know, replicate it, improve it, and repeat. It is easier than thinking critically or innovatively, but it makes us cognitively blind. You can overcome your cognitive blindness by strengthening your critical thinking.
• Get good at not knowing. We have to change our mindset about what being smart really is. In the technology-enabled world, how much you know will be irrelevant, because smart machines and the Internet will always know more than you. What will be more important is knowing what you don't know and knowing how to use best learning processes—in other words, the smartest people will be focused on continuously learning.
• "Quiet your ego," recommends Hess. Humilitywill help you really hear what your customers and colleagues are saying, and humility will help you be open-minded and more willing to try new ways. Don't be so consumed with being right—be consumed with constantly “stress testing” what you believe against new data. Treat everything you think you know as conditional, subject to modification by better data.
• Become an true collaborator. "The ability to collaborate effectively will be an essential skill in years to come," says Hess. "The powerful work connections that will be needed to build successful organizations will result from relationships that are built by authentically relating to another person, recognizing their uniqueness, and doing so in a respectful way that builds trust.

          "Artificial intelligence will in many ways make our lives better," says Hess. "But it will also challenge all of us to take our skills to a higher level in order to compete and stay relevant. We humans need to focus on continually developing the skills that are ours and ours alone."

The expanding supply chain

The recent move by FedEx to acquire Genco Supply Chain Solutions is proof of the growing trend of companies looking to stretch their traditional supply chain borders. The huge transportation company sees embarking into the contract warehouse business as an integral part of its future.

In doing so, it matches UPS, DHL, and other transportation providers who see a link between moving products and processing them in a distribution center.

Up until now, FedEx has not been a big player in this arena. With Genco under its umbrella, it has a proven commodity that has a nationwide footprint in warehousing and distribution – 35 million square feet in 130 locations.

Genco is also recognized as a leader in handling returns, which of course must be transported back to the distribution center. Once processed, FedEx can leverage its transportation network to deliver the returns to other parts of the supply chain. It should be a profitable union – one that recognizes the symbiosis within the supply chain of these important functions.

The move comes as no surprise to those of us at DC Velocity, confirming a core belief here. From its initial edition, DC Velocity has stressed the marriage of both transportation and distribution in an evolving, forward-thinking supply chain.

Manage like a coach, not a dictator

Common sense sometimes isn’t as common as it should be. This came to mind in correspondence with the folks at West Monroe Partners.

 

Michael Harris, manager of workforce optimization at WMP makes a very strong case for a shift in mindset and approach for warehouse managers in dealing with team management. The bottom line: managers who coach their team will yield more positive result than those who dictate.

 

Harris notes it is very common in warehouses with standards to discipline based solely on a performance percent – for example, John only achieved 80% of his target for the week.  The problem is deeper than John’s performance, though, because there is typically no detail on what caused the subpar performance. For example, was it because an environmental condition was not present, i.e., a wheel on John’s picking cart is broken? Or was it due to something John is or is not doing? 

 

Managers have two ways to approach this matter with John. They can discipline him for poor performance, or they can coach him to improve his performance.

 

In a disciplinary approach, says Harris, the associate is instructed to react to a course of action dictated to them through the company’s formal discipline process. There is little to no opportunity for the associate to have input into this course of action and it ends up creating low morale and a lack of trust. It can also strain the relationship between the associates and the management team.

 

By instead taking a coaching approach, he suggests, a manager engages John to actively work together to address the issue. This creates a process of supervisors observing the associates and their environment to determine a root cause. It also gives the management team and the associates an opportunity to improve their relationship and create a team environment where both sides are working together towards a common goal.

 

If the root cause is a methods issue with the associate, the supervisor can explain what the associate is adding to the work or doing different from the preferred methods and how that equates to their underperformance.

 

“Coaching should be utilized as the initial steps to newly-identified underperformance, Harris states. “Supervisors should give the associate an opportunity to learn from mistakes and fix any issues prior to launching into the formal discipline process, which may still be necessary if the associate continues to show an inability or unwillingness to address the issue.”

 

According to Harris, this approach helps the associate understand exactly what activities hurt their productivity and gives them hands on understanding of how to fix the issue as well as how it benefits them to do so. It also gives the supervisor and manager insight into any issues outside of the associate’s control that are affecting overall productivity.

 

Managers, Harris maintains, can foster this environment by utilizing the same coaching approach between themselves and their supervisors. In addition, having regular discussions on the process and helping supervisors to understand how a coaching approach will benefit the operation in the long run will go a long way. Some key benefits include:

• Increased morale
• Stronger relationship between management team and associates, manager and supervisors
• Reduced turnover
• Consistent performance and increased productivity

Supervisors applying the coaching approach have an intimate knowledge of the functions under their responsibility (the methods for each job) and incorporate the following steps into their typical day:

• Identify consistently underperforming associates.
• Schedule time to observe identified associates as soon as possible.
• Address any root cause issues immediately during observations.
• Practices good listening skills when working with associates.
• Utilize proper training techniques to ensure understanding and buy in.
• Document each associate interaction related to coaching or discipline.
• Spends as much time as possible in the operation even when not performing formal observations.
• Have an “open door” policy and a process for associates to report operational concerns or other issues.

Managers applying the coaching approach also have an intimate knowledge of the operation and incorporate the following steps into their typical day routines:

• Have an “open door” policy and a process for associates to report operational concerns or other issues.
• Works with supervisors on a regular basis (including occasional role plays) to help them develop their communication and conflict resolution skills which are essential to the coaching approach.
• Develops and trains supervisors on how to identify coaching opportunities versus when discipline is necessary.
• Performs regular walk through of their operation over the course of each shift to ensure visibility and to give the opportunity for associates to approach with questions and concerns.