2022 LOGISTICS PLANNER
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BITE SIZED SUPPLY CHAIN / LOGISTICS INFORMATION Info SNACKS
Hard ACT to Follow California Oregon Washington New York New Jersey Massachusetts States that have approved the Advanced Clean Truck (ACT) rule, requiring a growing percentage of all medium- and heavy-duty trucks sold to be zero-emission starting in 2025. Manufacturers must increase their zero-emission truck sales in those states to between 30 and 50% by 2030, and 40 and 75% by 2035.
54 MILLION Number of autonomous vehicles that will be on U.S. roads by 2024 37% Estimated growth in the autonomous vehicle market by 2023 – Thomas Index Report
HIGHLEVEL WORRIES CEOs worry about supply chain disruption: • U.S. CEOs: Supply chain disruption ranks as their 3rd biggest external concern. • CEOs globally: It ranks 4th. Most CEOs feel unprepared for supply chain disarray. • U.S. CEOs: Just 27% say they are well-prepared to deal with a global supply chain crisis. • CEOs globally: 29% say they are well-prepared. – The Conference Board, C-Suite Outlook 2022 survey of CEOs and other C-Suite executives
“Yes, these are trying times, but this is not necessarily something to be really worried about. We have the best logistics system on the planet. We spend about 10% of our GDP on logistics activities, inventory management, and warehousing. No other country comes close to us.” – Madhav Pappu, Professor, Texas A&M University, Business Department
HOLIDAY RETURNS AND BRUISED SUPPLY CHAINS Consumers favor retailers who provide quick and painless returns. Retailers need to implement the technology necessary to provide a headache-free shopping experience. • 61% of consumers would buy more from a store if the returns experience is guaranteed to be easier. • 61% of consumers are expecting the returns process to be more automated to make the experience faster. • 24% of consumers say checking inventory availability and pricing via handheld and cart-mounted devices would provide a better in-store experience. — SOTI 2021 report
January 2022 • Inbound Logistics 1
CONTENTS JANUARY 2022 | VOL. 42 | O. 1
138 2022 SUPPLY CHAIN PREDICTIONS
174 MANAGING
TRANSPORTATION: INSIDER TIPS AND WINNING STRATEGIES
Use these predictions to play your cards right and beat out everything from limited capacity to skyrocketing material costs.
Transportation management has become increasingly complex and challenging. Experts share the steps you can take to reduce costs, mitigate risks, and keep products moving. 182 YOU WEAR IT WELL: WEARABLE TECHNOLOGY HITS THE MARK Wearable technologies like hands-free barcode scanners and smart glasses are in demand and revolutionizing warehouses. See how logistics providers and customers use them to boost worker safety, improve efficiency, and lower costs.
104 SUPPLY CHAIN LESSONS LEARNED: WE WON’T GET FOOLED AGAIN With three sections covering enterprise-level operations (p. 104) , technology (p. 114) and procurement (p. 122), these chart-topping strategies will keep you on track when supply chain challenges spin out of control. 130 9 INNOVATIVE WAYS TO MANAGE AND MEET RETAIL DEMAND SURGES Supply chain disruptions and other challenges force retailers to find new ways to respond to order spikes, whether they’re anticipated or not.
160 THE (NOT SO) HIDDEN
BENEFITS OF INTERMODAL Sometimes shippers are completely in the dark about intermodal’s unique benefits. However, uncovering intermodal can ease capacity challenges and save money on long-haul shipments unburdened by pressing deadlines. 166 HERE’S AN IDEA: 3PLS MANAGE GROWTH THROUGH INNOVATION With creative thinking and novel solutions, third-party logistics providers support shippers through demand surges, labor shortages, cost increases, and capacity constraints.
2 Inbound Logistics • January 2022
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JANUARY 2022 | VOL. 42 | NO. 1 CO TENTS
204 BUILDING CARRIER RELATIONSHIPS THAT WITHSTAND THE STRESS TEST
234 SHIPPERS STOCK UP
As the pandemic continues to impact supply chains, retailers go shopping for third-party logistics providers to gain end-to-end control. SHIPPERS STOCK UP
In times of crisis, you learn who your real friends are. Disruption tested relationships among shippers and carriers across the industry, highlighting the value of mutually beneficial bonds during challenging times and beyond.
190 KNOCK KNOCK! SMBs
DELIVER THE FINAL MILE Small and mid-sized manufacturers and retailers are killing it in the middle and final miles during the pandemic, thanks to committed relationships with retailers and carriers and optimized data. 198 CARGO SECURITY: HAVE A SAFE TRIP From exploiting cargo bottlenecks to launching malware attacks, criminals are targeting the supply chain. Here’s how to keep your freight—and information—safe.
241 Q&A: TRANSPARENCY BUILDS TRUST In an exclusive discussion with Inbound Logistics , Marty Wadle and Paul Jensen of Ruan reveal the benefits of working with a logistics provider that ensures transparency and aligns with your business objectives. 232 Inbound Logistics • January 2022
212 10 BEST SUPPLY CHAIN COMPANIES OF 2021 Gartner’s annual global Supply Chain Top 25 list identifies today’s supply chain leaders and highlights their best practices. 222 18 QUICK TIPS FOR 2022 This year may be fraught with the same challenges as 2021, but the Inbound Logistics audience has your back. From limiting your SKUs to refining reverse logistics, industry leaders share quick tips to help you navigate with certainty.
4 Inbound Logistics • January 2022
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integrated solution requires logistics, warehouse management, Ruan assets, or more. And our flexible, best-of-breed technology platform scales to meet your needs, improving visibility, reducing spend. For more information about how we can design a solution that brings more value to you (whether you’re shipping apples or steel), call (866) 782-6669 or visit ruan.com.
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CONTENTS 244 WINTER READING GUIDE 2022 278 10 MOST READ ARTICLES OF 2021 JANUARY 2022 | VOL. 42 | O. 1 INPRACTICE
Grab a warm mug and dig into the latest logistics learnings covering everything from textile supply chain tactics to dominating in the digital age.
From keeping cargo cool to amping up innovation in the age of acceleration, take a look back at the Inbound Logistics content that resonated with readers throughout the year. 291 YOUR ESSENTIAL LOGISTICS RESOURCE
30 READER PROFILE Michael Shaughnessy ( pictured ), senior vice president of supply chain with seasonal home décor retailer Balsam Brands, cultivates strong relationships with carriers and uses his 23-year military background to master timing and movement. 32 LEADERSHIP Alexi Cashen, co-founder of alcoholic beverage distributor Elenteny Imports, drinks up supply chain challenges by staying grounded and communicating with customers with honesty, empathy, and By deploying autonomous mobile robots in its Atlanta-area warehouse, automotive equipment specialist Integrated Supply Network increased productivity 266%, boosted employee satisfaction, and kept pace with annual growth. 261 IT TOOLKIT Paper distributor OVOL USA automated complete transparency. 257 DC SOLUTIONS multiple processes and saved time and money by using a transportation management system that suited all its divisions, provided visibility, and offered a straightforward user interface. 265 CASEBOOK During a period of rapid growth, online grill retailer BBQGrills.com reduced damaged freight claims by more than 75% and lowered shipping costs by working with a logistics services provider for country-wide less-than-truckload services.
S P E C I AL S U P P L EME N T
2022
253 TAKING STOCK OF
INVENTORY MANAGEMENT As supply chain managers navigated empty store shelves, essential item shortages, and unpredictable demand, they stocked up on new forecasting tools and increased collaboration to inform inventory management. 275 LISTEN UP! 12 ILLUMINATING LOGISTICS CONVERSATIONS Address capacity concerns, strengthen partnerships, and get other insightful takes with these must-listen podcast episodes from Inbound Logistics ’ extensive collection of conversations with logistics leaders.
L EAD E R S I N LO G I S T I C S
January 2022 • Inbound Logistics 291
SPOTLIGHT ON LEADERS IN LOGISTICS
Planner COVER_0122.indd 291
1/21/22 4:26 PM
INFOCUS 1 INFO SNACKS 26 VERTICAL FOCUS: CONSUMER PACKAGED GOODS 34 NOTED 42 TAKEAWAYS 270 IN BRIEF
6 Inbound Logistics • January 2022
CONTENTS JANUARY 2022 | VOL. 42 | O. 1
GOOD QUESTION What is the biggest
14
supply chain lesson you learned from the past two years?
26
70 IT MATTERS TMS evolution: A provider’s perspective
Taking grocery stores into the future
72 LEAN SUPPLY CHAIN S&OP: Bringing the outside in 74 LOGISTICS MGMT Expedited shipping can savemoney 76 SC RESILIENCY Three ways to build a resilient supply chain
93 SPONSORED SOLVED Curating in-transit visibility for fine art clients...94 Bringing insight and savings to a retailer’s freight spend...95 3PL wins more loads and grows business...96 Reusable shipping technology in the pharma industry...97 Masterful moves: Overcoming deadlines, pressures, and the pandemic...98 Fortune 500 company takes control of inbound program...99 Pool distribution increases the speed to market for fast fashion...100 Scalable automation boosts productivity for peak season and beyond...101 When the rubber meets the road: Warehousing solution goes on overdrive...102 3PL outsourcing beyond initial goals...103 INFO 268 SUPPLY CHAIN INSIGHTS 280 CALENDAR 284 RESOURCE CENTER
78 REVERSE LOGISTICS Four tips to master reverse logistics 80 SMART MOVES Bridging the supply chain gender gap 82 RISKS & REWARDS
61 SPONSORED THOUGHT LEADERS
INSIGHT 12 CHECKING IN You won’t get fooled again 14 GOOD QUESTION
Parcel is a crucial value-add in the evolution of the TMS...62 Supply chain efficiency through smart in-cab BOL capture...63 Why expedited is not a four-letter word...64 Strengthening omnichannel capability to address shifts in consumer behavior...65 Reducing small parcel shipping costs, here’s where to begin...66 Right-sizing and leveraging fulfillment automation...67 WMS must-haves: Adaptability, scalability for efficiency and profit...68
Before making critical decisions, evaluate these supply chain risks 84 REAL ESTATE Is there an end to Amazon’s impact on industrial real estate? 86 COVID RECOVERY How to combat logistics logjams 88 LAST MILE Last mile predictions and priorities 90 SC SECURITY National security starts with individual manufacturers
What is the biggest supply chain lesson you learned from the past two years? 20 DIALOG 22 10 TIPS Deploying a robotics system in your warehouse/DC 24 WHAT’S THE WORD? 51 SPONSORED KNOWLEDGE BASE The relationship between supply chain resiliency and sustainability...52 Key habits of highly effective cold chain shippers...53 Achieving exponential growth with your WMS...54 Transportation spend management in 2022...55 Is labor status quo crippling your operation?...56 Addressing supply chain pain
270
points for shippers...57 Data management—vital today...58
New inkless label printer and other innovations
Inbound Logistics (ISSN 0888-8493, USPS 703990) is mailed monthly to approximately 60,000 business professionals who buy, specify, or recommend logistics technology, transportation, and related services, by Thomas, a Xometry company, 5 Penn Plaza, NY, NY 10001. Periodicals postage paid at New York, NY, and additional mailing offices. All rights reserved. The publisher accepts no responsibility for the validity of claims of any products or services described. No part of this publication may be reproduced or transmitted in any form or by any electronic means, or stored in any information retrieval system, without permission from the publisher. POSTMASTER SEND ADDRESS CHANGES TO: Inbound Logistics, 5 Penn Plaza, New York, NY 10001
8 Inbound Logistics • January 2022
LINKS JANUARY 2022
DECISION SUPPORT TOOLS Search our databases of the Top 100 providers in key segments of the supply chain industry.
MORENEWSONLINE
For up-to-the-minute information, bookmark the IL news page. Enjoy opinions, commentary, and links to the latest news to help you stay on top of your game. bit.ly/IL-news WEB_CITE CITY The most comprehensive online directory of supply chain websites— organized by category, cross-referenced, and
6 REASONS TO CONTROL INBOUND LOGISTICS One way trade-dependent businesses can mitigate the risk of critical shortages and reduce costs during a disruption such as a pandemic is taking control of inbound logistics. Take a look at six benefits of managing your inbound logistics. bit.ly/ControlingInbound THE ROLE OF IoT IN KEEPING VACCINES SAFE The historic scale of vaccine distribution made the healthcare industry a crucial application for cold chain monitoring solutions. Here are two ways the Internet of Things (IoT) can ensure vaccine safety for COVID-19 and beyond. bit.ly/IoTVaccineSafety BUSINESS SURVIVAL DEPENDS ON MANAGING THE 5 V’S Logistics has shifted from being primarily a back-office function to a boardroom priority. To avoid bankruptcy, C-suite executives must effectively manage the five V’s: supply chain visibility, volatility, velocity, vulnerability, and viability. bit.ly/SupplyChain5Vs
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10 Inbound Logistics • January 2022
CHECKINGIN
Vol. 42, No. 1 January 2022 THE MAGAZINE FOR DEMAND-DRIVEN ENTERPRISES www.inboundlogistics.com
STAFF
You Won’t Get Fooled Again
PUBLISHER Keith G. Biondo
publisher@inboundlogistics.com
EDITOR Felecia J. Stratton
editor@inboundlogistics.com
SENIOR EDITOR Katrina C. Arabe
karabe@inboundlogistics.com
S ometimes a kick in the pants is a step forward. The past two years have certainly been kicking it, and not in a good way for many of you. Stress of the type we are still going through can be incentive to change business practices. Incremental changes are a normal part of standard business practices. Catastrophic COVID kicks was nothing anyone could have predicted or planned for. We asked some business leaders in our audience to
Jaclyn Ix jix@inboundlogistics.com
PLATFORM CONTENT MANAGER
CONTRIBUTING EDITORS Sandra Beckwith • Merrill Douglas • Thomas Gresham • Karen M. Kroll • Helen Mann • Debra Phillips • Amy Roach Conrad Winter • Gary Wollenhaupt CREATIVE DIRECTOR Jeof Vita jvita@inboundlogistics.com DESIGNER Nicole Estep nicole@inboundlogistics.com DIGITAL DESIGN MANAGER Amy Palmisano apalmisano@inboundlogistics.com PUBLICATION MANAGER Sonia Casiano sonia@inboundlogistics.com CIRCULATION DIRECTOR Carolyn Smolin
Keith Biondo, Publisher
describe what it was like: “A massive broken unpredictable mess.” —Kevin Ledversis, Newcastle Systems “A never-ending game of whack-a-mole.” —Brian Higgins, managing director, KPMG “The biggest dumpster re ever.” —Chris Peckham, vice president of operations, FreightPlus Yet people in logistics are a resilient bunch and are prone to pivoting privation into process improvements. “Antiquated processes unearthed signi cant disruption.” —Michael Hung, CEO, CBX Software “Opportunity to excel and evolve.” —Bruce Lancaster, CEO, Wilson Electronics “Everybody’s rethinking their supply chain.” —Mark Robinson, president, UPS Capital “A digital revolution is happening. Massive disruption, wild unpredictability, and sky-high customer expectations have combined to produce a perfect storm for global supply chains. Shippers have no choice but to abandon outdated ways of working.” —Virgil Ferreira, COO, Magaya We agree with our audience and this edition contains plenty of examples of the motivation to improve on what this “never-ending game of whack-a-mole” has given us. But it goes beyond that. The cover of this 2022 Logistics Planner edition features an album with the title song: We Won’t Get Fooled Again. What that means is the way forward is not just another case of having a speci c business operations problem and then nding a solution to address that one- off challenge. That is an outdated static approach. The way forward must be different in that it has to be ongoing and continuous improvement. Only then, we won’t get fooled again. n
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Inbound Logistics supports sustainable best practices. Our mission is rooted in helping companies match demand to supply, eliminating waste from the supply chain. This magazine is printed on paper sourced from fast growth renewable timber.
Inbound Logistics welcomes comments and submissions. Email us at editorial@inboundlogistics.com; call (212) 629-1560; or mail 5 Penn Plaza, NY, NY 10001. For advertising or subscription information, call (212) 629-1560, or e-mail publisher@inboundlogistics.com. Inbound Logistics is distributedwithout cost to those qualified inNorthAmerica. Interested readers may subscribe online at bit.ly/get_il. Subscription price to others: in North America: $95 per year. Foreign subscriptions: $229. Single copy price: No. Amer. $10, foreign $19, back issues $15.
12 Inbound Logistics • January 2022
GOODQUESTION Readers Weigh In
What is the biggest supply chain lesson you learned from the past two years?
CLOSE COORDINATION AND SUPPORT throughout every point of the supply chain is the new normal. Disruptions have had a lasting impact on customer confidence. Detail- oriented supply chain management, enhanced customer service, and data-driven inventory decisions are essential to reestablishing a chain of confidence. —Angela McNally Vice President, Global Provider Solutions, Owens & Minor THE SUPPLY CHAIN IS RIPE FOR INNOVATION. A singular disruption impacts a sequence of events, creating inefficiencies. The positive outcome of this unprecedented market cycle is collaboration across the supply chain Any Way They Want It
resulting in technology solutions. This improves productivity by getting goods to shelves efficiently on a go-forward basis. —Blair Blake VP, Carrier Strategy, Arrive Logistics
Be bold to embrace change during challenging times. Move quickly and with purpose. —Kevin Williamson CEO, RJW Logistics Group
I’VE LEARNED NOT TO TAKE CONSISTENT AIR AND OCEAN
SUPPLY CHAINS FOR GRANTED. The past two years have been inefficient, making delays commonplace and causing deficits and surpluses of inventory due to increased freight costs. The solution is to stay informed
THE FRAGILITY OR BRITTLENESS OF A GLOBAL MARKETPLACE so deeply dependent on just-in-time inventory. Any event, whether a pandemic, hurricane, or a container ship stuck in the Suez Canal, creates immediate disarray. In response, retailers have reverted to “just-in-case” practices, building up large safety stocks. It has become a choice between risking a stock-out or keeping costly excessive inventory. Where is the balance? —Joe Dagnese President and CEO PECO Pallet SUPPLY CHAIN PROFESSIONALS SHOULD USE THE EXPERIENCES of 2020 and 2021 to take a fresh look at their supply networks, understand their vulnerabilities, and then take the appropriate actions to improve resilience. Doing so can create competitive advantage; failing to do so leaves an opening to the competition. Supply networks may contain potentially crippling risks, and organizations must identify and remediate them. —Oliver Lemanski CEO, OnProcess
and listen to suppliers, freight forwarders, and consumers.
—Richard Huang CEO, Cloudious9
Adaptation is absolutely critical. You have to offer substitutes, source creatively, have a plan B and maybe even C, and be vigilant in getting accurate data. —Kevin Ledversis Sales Director, Newcastle Systems
It’s more important than ever to “architect” agility into processes. The growing complexity of supply chains introduces plenty of opportunities for things to go awry. The more shippers can digitize and standardize manual operations, the better equipped you are to pivot when needed and keep shipments moving. —Virgil Ferreira COO, Rate Management, Magaya
14 Inbound Logistics • January 2022
GOODQUESTION
What is the biggest supply chain lesson you learned from the past two years?
FLEXIBILITY IN PLANNING beats perfect execution. The market is in flux; the businesses succeeding are the ones adapting to what is being thrown at them. If I’ve learned anything over the past two years, it’s that perfectly planning for the long term doesn’t necessarily lead to success. —Sean Elliott Chief Technology Officer/ OUR RELIANCE ON A FEW KEY PORTS AND JOBS (dock workers and truck drivers) highlighted our supply chain fragility. It only takes one or two bottlenecks to have ramifications and ripple effects throughout the entire economy. The recent supply chain challenges also demonstrated how critical the ports of Los Angeles and Long Beach are specifically to the United States— these ports are in earthquake-prone Chief Digital Officer Körber Supply Chain
With a Little Help from My Friends
The pandemic highlighted the need for a much closer relationship between manufacturers and their 3PL partners. We are working more closely with our partners than ever before—developing innovative and collaborative approaches to tackling these new, longer-term challenges. —Jim Saponaro President, Life Sciences & Healthcare, DHL Supply Chain Relationships now are more important than ever. Whether it’s developing partnerships with secondary and tertiary suppliers to meet rising demand, or managing the expectations of vendors and customers during challenging times, the importance of establishing and cultivating strong, lasting relationships cannot be overstated. —Jonathan Parks Senior Vice President, Supply Chain, iGPS Logistics
Amateurs hunt dollars, professionals hunt relationships.
—Whit Smith Director of Operations, TA Services
regions, and a large earthquake impacting one or both of these
ports could make COVID-19 related challenges seemmore like a nuisance than a major disruption. —Megan Linkin Senior Parametric Nat Cat Underwriter Swiss Re Corporate Solutions THE COMPANIES THAT SUCCEED ARE THE ONES THAT COMMUNICATE most effectively. Because there are so many players (vendors, manufacturers, 3PLs, carriers) and software all working together to run a supply chain, the companies that create a common vision, communicate the vision, and hold all parties accountable to the same standard are the ones that have adapted to the pandemic successfully. —Keith Moore Chief Product Officer, AutoScheduler.AI INVENTORY IS NOT NECESSARILY THE “EVIL” that supply chain professionals once thought. Having distributed inventory in strategic locations at an inventory carrying cost that does not burden your balance sheet can be the key to supply chain resiliency and winning.
HAVING THE RIGHT SYSTEMS AND TECHNOLOGY MATTERS. The supply chain changed in a hurry, our systems and technology helped us to adapt quickly with it. We were able to quickly identify obstacles and overcome them. By embracing forward thinking, we were able to limit the impact of supply chain issues. —Lonny Holston Export Operations Coordinator, Mickey TWO THINGS WE HAVE LEARNED : We must: 1) understand data to minimize risk and 2) identify weak spots in the supply chain to improve workflows. Organizations that have met the challenge of the past two years have done so by making calculated investments in technology and processes to limit disruptions. —Mark Casiano
equipment availability. Simply adding more ships and more containers will not get us anywhere if there is not more capacity in the system to receive those containers. —Nathan Strang Director, Ocean Trade Lane Management Flexport VISIBILITY IS VITAL. The shortages of rawmaterials and extended supplier lead times have drastically increased stock-outs. You need complete visibility of 1) inventory indicators to ensure you can meet demand and 2) knowing how well your suppliers perform. —Ara Alec Ohanian Group CEO, NETSTOCK WE NEED TO FULLY DIGITIZE OUR SUPPLY CHAINS if we want them to be resilient in the face of unexpected disruptions. By unifying our digital systems, applications, and processes, we will be able to efficiently manage supply chain operations. —Antony Francis Supply Chain and Logistics Consultant Endava
SVP, Sales, Marketing & Customer Experience Odyssey
THE PAST TWO YEARS EXPOSED INFRASTRUCTURE CRACKS in our industry—specifically when looking at effective capacity at ports and
—Tom Nightingale CEO, AFS Logistics
16 Inbound Logistics • January 2022
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GOODQUESTION What is the biggest supply chain lesson you learned from the past two years?
RETAILERS NEED BETTER INFORMATION to navigate quickly. As supply chain bottlenecks have impacted every retail touchpoint, winning means knowing your options and what the market is doing. With AI-driven market intelligence, brands can make better and faster decisions to deliver great customer experience and grow revenue. —Juliana Prather CMO, EDITED WE LEARNED HOW TO STAND UP BRAND NEW DISTRIBUTION OPERATIONS in newmarkets at warp speed. In some cases, we went from no market presence at all to lease, equipment, and team in place and completely RF-integrated in just three weeks. We also delivered a building five months ahead of schedule.
Everybody Wants to Rule the World
We need to be able to plan and face the consequences that result from the consolidation trend of brands and businesses. Consolidation has caused massive inefficiencies and created a lack of options due to the absence of competition. Many companies have benefited in the short term from these mergers but do not recognize their role in the supply chain or do not plan accordingly. This has resulted in practices that can be monopolistic in nature and can have disastrous results in the operation of the chain, especially for smaller brands and product lines. However, big actors, who have actively promoted mergers and consolidations did not realize—maybe until very recently— that their operations are at risk as well. Until these larger groups and brands realize that their practices have affected the overall functioning of the global supply chain, logistic partners need to be prepared for disruptions. —Eric Gomez CEO, maxiaNET
—Dale Young Vice President Warehousing & Distribution World Distribution Services LLC
THE MOST SURPRISING LESSON I LEARNED was howmuch the supply chain relies on commercial uplift. The airlines fly passengers all over, and airline companies reserve space for cargo on commercial flights. We saw firsthand howmuch companies relied on airplanes, so when the pandemic hit, and there were fewer flights happening, that contributed to the bogged down supply chain. As more passenger
THE MAGNITUDE OF DISRUPTIONS supply chains faced over the past two years demand rapid innovation. The world around us has changed fundamentally, so legacy systems and their outdated approaches no longer serve supply chains well. Adapting an adage, futility is doing the same things and expecting the same results, even when the underlying assumptions have shifted. Supply chain leaders who have digitally transformed their organizations are the ones positioned to address emerging trends, mitigate risk, and identify new opportunities.
THE PANDEMIC is by no means a short- term crisis event. Its impact on the work of people and the functioning of the supply chain in the organization will be long term. Therefore, in order to effectively confront the challenges of the future, the business must increase long-term resilience along the entire supply chain. To do this, supply chains must leverage platforms that offer access to applied analytics, AI, and machine learning solutions, and provide end-to-end transparency. —Dmitri Fedorchenko CEO and Co-Founder, Doft THE RETAIL SUPPLY CHAIN CAN NO LONGER BE PROTECTED from the impacts of omnichannel. The volume of omnichannel purchases and fulfillment has grown to the point that retailers can’t treat it like a rounding error. They must make supply chain strategy and network changes or risk losing their shirt—literally and figuratively. —Nikki Baird VP, Retail Innovation Aptos
flights come back, that has the potential to ease supply chain challenges.
—Dustin Hansen CEO, InXpress
—Polly Mitchell-Guthrie VP, Industry Outreach and Thought Leadership, Kinaxis
Have a great answer to a good question? Be sure to participate next month. We want to know: What ’s the difference between traceability and transparency in the supply chain? We’ll publish some answers. Tell us at editorial@inboundlogistics.comor tweet us @ILMAGAZINE #ILGOODQUESTION
18 Inbound Logistics • January 2022
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MUNCH ON THIS
IN THE HEADLINES “Supply chain” went from relative obscurity to an everyday term due to global delays. When it works well, it’s not a concern or trending topic. It’s fantastic people are more aware of the industry, and I look forward to the day supply chain doesn’t need to be a top headline. -Lindsey Shellman Chief Commercial Officer, Centerboard
Empty produce shelves at Stop & Shop in Orangeburg, New York, grab shoppers’ attention on January 16, 2022.
“receiving” but when we get there it has changed (due to forwarder, shipper, ship line, or port) and we have to leave with the load and take it back someplace to hold it. • The rebooking process is supposed to take a few hours—but it takes days, and some export loads are loaded and sitting in containers on chassis for 4+ weeks because of inef ciencies in rebooking and moving targets of the ship line. • Sometimes a vessel “opens up for receiving” in the computer in the middle of the morning, and also the last day to receive (cutoff) is the same day. So it’s a sudden scramble to get all loads in; all the trucks are sitting in the same areas in the ports waiting for cranes. There isn’t much the Department of Transportation/Washington, D.C. can do to x these things except get out of the way by suspending any regulations that can be suspended without causing immediate harm. —Danny R. Schnautz Clark Freight Lines Via email, November 17, 2021
TRUCKER PERSPECTIVE View from the Port of Houston
Re. Good Question: How would you summarize the supply chain in 2021 in ve words? bit.ly/GQ_SCin5words Transport: Quick Tips. “How to keep freight moving when it seems like the whole world is conspiring to slow it down.” Frank Mullens @FrankMullens Tequila lime grilled chicken and veggie bowl with @ILMagazine’s Expedited
I see all kinds of bureaucracy in transportation these days that limits our effectiveness. We have warehouses scheduling the arrival of empty containers for export so we have one day to get the empty there. If that day is missed (which could be 7 days before cargo cutoff back at the vessel) the warehouse tells the shipper that the cargo has to roll to another vessel. This starts the ongoing avalanche of emails to reset and possibly rebook to another shipping line. For decades there has been a small window to drop empties on; this “one day” is detrimental to overcoming the daily challenges in the import/ export market. At the Port of Houston, we have an incredible amount of inef ciency on drayage these days. Here are the facts as they exist today from the trucker experience: • Sometimes we show up with a load for a vessel that the computer shows
Gloom, despair, agony on me.
—Brian C. Gaffney Su pply Chain Specialist Natural Fiber Welding
There is no reset button. Historically high container shipping rates, meet historically low service levels. While logistics networks could have performed better in 2021, things couldn’t have gotten much worse. Shippers and logistics service providers need to take a hard look at the processes and ow of information between supply chain partners. —Matt Gunn VP Solutions Marketing, Slync.io
20 Inbound Logistics • January 2022
10 TIPS
Automation is necessary to meet customer demand and companies have no other option but to deploy these technologies in their warehouses and fulfillment centers to remain competitive now and in the future. Here are 10 suggestions to help you get started. Deploying a Robotics System
1 UNDERSTAND THE
CURRENT BASELINE. What are the facilit y’s operating parameters today? Gather one year’s worth of performance metrics to understand where the transformation to robotics is starting from. This is a valuable input to the robotics solutioning design efforts and gives you a way to determine the business value of the potential outcomes robotics enables.
2 EVALUATE AND GROW TO UNDERSTAND THE ROBOTICS MARKET. Different suppliers provide very different robotics solutions to address various business use cases. Do the research (third-party market reports are best) to understand which vendors should be on your short list for evaluation. Do you need a robotics AS/RS, goods-to-person, mobile sortation, or co-bot strategy? 3 CONSIDER HOW YOUR SUPPLY CHAIN WILL EVOLVE IN THE SHORT TERM. Are you supporting multiple channels from the warehouse/DC? How is the balance between those channels changing? Will you ship more units versus cases in the future? Omnichannel fulfillment and the evolution of that strategy should strongly influence your evaluation of robotics.
4 UNDERSTAND YOUR Software application integration is typically on the critical path for implementing a robotics INTEGRATION STRATEGY.
Is this an engineering function? The answer varies from one company to the next depending on how they envision the utilization of robotics in fulfillment and how they see it scaling in the future. 9 CREATE A BUSINESS CASE FOR ROBOTICS INVESTMENT. Unify on the vision for what capabilities robotics are enabling. Define this vision using the same metrics you operate with today to create a way to define accountability for success of the program. Evaluate throughput enhancements and labor reduction in the context of the robotics solution.
program is critical to the project’s success. 7 SELECT A STABLE VENDOR. Understand the viability of the robotics vendor you partner with. Mergers, IPOs, and acquisitions are common in the robotics vendor community today. Will the vendor you are considering be around in three years to continue your partnership? 8 DETERMINE STAKEHOLDERS. Think about who inside your company should “own” robotics in fulfillment. Is this a supply chain operations function? Is this an IT function?
solution strategy. Understand which
robotics vendors have already integrated their control systems software into your warehouse management system or ERP solution. 5 SELECT YOUR ROBOTICS VENDOR CAREFULLY. Most robotics companies are small and may not have done a project in your specific industry segment. Understand the actual experience they bring to the transformational program for your warehouse/DC. 6 MAKE SURE YOUR PEOPLE ARE READY. From hourly associates
10 THINK ABOUT
THE LONG TERM. As the value proposition continues to improve for robotics, how will your strategy evolve and be fully integrated? Think about the warehouse execution software and its abilit y to suppor t multiple robots from multiple suppliers over time.
to senior executives, the change in both
thinking and execution is substantial. An effective change management
SOURCE: JOHN SEIDL, PARTNER, GREYORANGE
22 Inbound Logistics • January 2022
WHAT’S THE WORD
The Language of Logistics
WHAT’S THE DIFFERENCE BETWEEN LOGISTICS AND SUPPLY CHAIN?
Logistics can be described as the legs of the overarching supply chain body. Running is good, but running at the right speed in the right direction at the right time is what makes a great supply chain. — CHRISTINA VALI Director of Client Solutions, Tecsys
Upstream
Refers to end-to-end supply chain ef ciency that culminates with what’s available on the store shelf. While identifying on-shelf availability is critical to keeping shoppers satis ed, retailers can’t rely on point-of-sale data alone to understand inventory levels. Shelf accuracy is impacted by any number of events that happen along the way, which is why it’s important retailers have AI-driven, real-time insights to provide a holistic view of inventory. —PATTY McDONALD Global Solution Marketing Director, Symphony RetailAI Shelf accuracy
Downstream vs.
Some organizations divide the supply chain into two parts to simplify management: upstream and downstream. ● The upstream supply chain includes all activities related to the organization’s suppliers, which source raw material inputs to send to the manufacturer. ● The downstream supply chain refers to activities post-manufacturing, namely distributing the product to the final customer. Downstream supply chain can also be thought of as the “demand” while upstream supply chain is the “supply.” Supply chain managers seek to balance demand and supply to make sure there are no lost sales, inventory shortages, or over-ordering. Supply chain inefficiencies can waste up to 25% of operating costs, so matching supply and demand is of paramount importance. Delineating upstream vs. downstream portions of the supply chain can help supply chain managers get a handle on three main flows—materials, money, and information—that happen in the creation and distribution of a product.
Supply chain encompasses the end-to-end process; logistics executes the plan. Here’s an analogy: In chess, the supply chain includes finding a partner, scheduling the game, securing the gameboard, and planning your opening move. Logistics entails the physical movement of pieces to win. Logistics without the view of the supply chain is a loss. — JEREMY TANCREDI Partner, Operations Excellence/Supply Chain, West Monroe
Trader Joe’s, Paramus, New Jersey, on January 9, 2022, after delivery truck delays.
Think of a rideshare app. The app itself is the supply chain. It processes requests, sources drivers, plans trips, and ensures riders arrive at their destinations. The driver physically moves the rider from point A to point B. That’s logistics. — SAM LURYE CEO and Founder, Kargo
SUPPLY CHAIN SURFACE AREAS These are the sum of all the products, processes, and networks that compose the supply chain and represent touchpoints that can be affected by risk events, according to Gartner, Inc. “Chief supply chain officers should reduce the surface areas of their supply chains by simplifying processes, reducing movement within their supply chains, and reducing the number of sites and suppliers that compose their networks. With a higher cadence of risk event, a smaller surface area is an asset, a large surface a major liability.” —SUZIE PETRUSIC, Director, Research, Supply Chain Practice, Gartner
24 Inbound Logistics • January 2022
Extraordinary Service for Over a Century
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Consumer Packaged Goods
CONSUMER LOYALTY IS BUILT ON TRUST Most executives say they’re investing significantly to prevent trust erosion on multiple fronts ( see chart ), a Deloitte report says, and it’s not hard to see why: 95% of consumer product companies that have high consumer trust are more resilient. Here are three things consumer product brands should keep in mind when it comes to maintaining trust, the report says: 1. Supply chain issues result in stockouts. Stockouts break the inherent promise of reliable availability and hurt perceptions of competence—not just of retailers but also of brands themselves. 2. Labor shortages reduce production and, in some cases, affect quality and service levels, further harming a brand’s perceived ability to deliver on its promises. Workers who don’t trust a company to create a sense of belonging are also unlikely to accept job offers or stay. 3. Rising prices that increase beyond what consumers view as justified break the promise of a fair deal. The intent and motive of the brand comes into question.
The Sustainability Consortium, a global nonpro t focused on transforming the consumer goods industry, formed a new recycling coalition to address small-format packaging, which is commonly used in cosmetics and food supply chains. Small-format packaging consists of items such as beverage bottle caps, lip balms, travel-size shampoo bottles, and other small packaging components that are unrecyclable in most curbside recycling programs due to the size of the screens used for sorting. Consequently, most small-format items end up in land lls or become litter, rather than being repurposed in other products through a circular path. The recycling coalition includes nonpro ts, universities, and companies such as P&G, Burt’s Bees, and Colgate-Palmolive. Its aim is to improve circularity for small-format packaging of all material types through collective, science- based projects. The coalition will perform a study involving a projection of the scale of collection to estimate economic value, and testing secondary sortation technologies. The ndings will help create tools that can be used globally to create a more circular supply chain for small consumer products. GREEN THINGS COME IN SMALL PACKAGES
EXECUTIVES SAY CONSUMERS LOSE TRUST IN BRANDS WHEN…
Brands are not open and transparent
90%
Brands don't meet ESG expectations
84%
Brands engage in greenwashing
82%
Labor shortages affect quality
79%
Prices increase higher than justified
76%
Last-mile shipping to home is delayed
59%
Products out of stock at preferred retailers
55%
Brands fail to engage in a personalized way
51%
Preferred variety of a product is unavailable
48%
Source: Deloitte 2022 Consumer Products Industry Outlook Survey
LEADING CONSUMER PRODUCT BRANDS WILL WORK TO BUILD TRUST IN THREE PRIMARY WAYS IN 2022: 1. INCREASE TRANSPARENCY
2. EXPAND DIGITAL ENGAGEMENT 3. INVEST IN THE FUTURE OF WORK
—Deloitte
26 Inbound Logistics • January 2022
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thelogistixco.com
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Consumer Packaged Goods
THE GROCERY STORE OF THE FUTURE With the explosion of food delivery
and contactless checkout, grocery stores offer a more seamless shopper experience across digital and physical interactions, with an emphasis on data collection and efficiency across the supply chain. Here’s what your trip to the grocery store will look like in two years, says a CB Insights report: Text-based customer service . Phones and chat-based service options, such as Albertsons’ live chat for online grocery support and ShopRite’s registered dietitian chat, will be essential resources for grocery shopping. Virtual and robotic kitchens . Virtual kitchens and robotic tools will gain traction. For example, Kroger partnered with delivery-only restaurant ClusterTruck to trial fresh meals for delivery, DoorDash acquired robotic saladmaker Chowbotics, and grocery platformOcado invested in made-to-order meals robot provider Karakuri. Micro-fulfillment . As online grocery shopping grows, making fulfillment profitable is key. The micro-fulfillment market is projected to grow 10 times in the next four years, withWalmart already adding automated micro-fulfillment to several stores. Sustainable packaging . Attention to reusable packaging reached an all-time high in 2020, aided by the EU’s ban on a variety of single-use plastics. Consumer product giants assert sustainable packaging commitments: P&G introduced refillable aluminum shampoo bottles, and Nestlé piloted in-store dispensers for pet food. Cashierless self-checkout . Contactless payment will take over. Brands such as Dollar General already offer buy-online-pickup-in-store options. Just-walk-out technology has also spread among Kroger, 7-Eleven, Circle K, and Giant Eagle.
Like many department stores such as NeimanMarcus and Sears, J.C. Penney led for bankruptcy during the pandemic. However, the decades-old American mall mainstay is getting more adaptable, says a Chain Store Age report. Some of its recent e-commerce upgrades include: New ful llment options: J.C. Penney expanded its curbside pickup and buy-online- pickup-in-store services by partnering with on-demand delivery platformDoorDash to offer same-day delivery frommore than 600 stores. Shoppers can browse and order items such as makeup, skincare, fragrance, and haircare, as well as home goods, via the DoorDash mobile app or e-commerce site. Smart predictive technology: To better understand how online shoppers make their purchase decisions, the retailer is using arti cial intelligence technology fromMetrical to streamline its digital customer experience. Since deploying the platform, J.C. Penney saw an 18% reduction in cart abandonment. Tech-focused hires: Former Gap and Walmart executive Sharmeelee Bala joined the company as its chief information of cer, responsible for the technology systems that support its stores and supply chain. Bala will help combine J.C. Penney’s physical assets with its digital footprint. Katie Mullen, previously with Neiman Marcus, was named chief digital and transformation of cer and will lead the growth of its e-commerce business. The appointments come shortly after Marc Rosen, who previously drove digital strategy at Levi Strauss and global e-commerce at Walmart, was named Penney’s chief executive of cer in October 2021. PENNEY FOR YOUR E-COMMERCE STRATEGY?
CLOUDY WITH A CHANCE OF INTELLIGENT INVENTORY
As consumer demand pushes retailers and consumer goods manufacturers to their limits, a new software-as-a-service solution can help them better anticipate demand surges. SAS collaborated with Microsoft to create the SAS Cloud for Intelligent Planning. Available on Microsoft Azure, the solution predicts demand signals including when, where, and how sales will happen. With the bene ts of the cloud, retailers can access timely data, increasing supply chain transparency and reducing the time it takes to complete a forecast. The arti cial intelligence creates self-tuning plans and makes sure the right products are in the right place at the right time, provides short-term demand sensing that turns consumer insight into action, and displays forecasts on any device. By using comprehensive shopper data, the software recommends balanced, pro table commercial plans across a retailer's channels and customers. Automated with machine learning, the cloud offering is always up to date. That means better on-shelf availability and a maximum return on investment for inventory dollars.
28 Inbound Logistics • January 2022
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