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BITE SIZED SUPPLY CHAIN/LOGISTICS INFORMATION Info SNACKS
NEARLY 70% of global logistics executives say they are bracing for recession amid higher costs, slowing demand, and ongoing supply chain disruption. 90% say their shipping, storage, and other logistics costs remain well above early 2020’s pre-pandemic levels. 53% say their companies have committed to net-zero emissions. 6.1% say their businesses have achieved net-zero. 55% say they will be more aggressive in emerging markets expansion and investing or leave their existing plans untouched despite recession fears. –2023 Agility Emerging Markets Logistics Index
PYKA’S PEAK Autonomous electric planemaker Pyka has developed the world’s largest zero-emission freighter. The aircraft, known as Pelican Cargo , is pilotless, has a nose-loading door like the Boeing 747, can fly up to 200 miles, and can carry up to 400 pounds. “We want to deliver cargo between two areas that have relatively poor infrastructure,” says company founder and CEO Michael Norcia. “We’re looking for a way to do that affordably so they can run daily deliveries between places that historically only get service maybe once a week.”
NEW CARGO DRONE SMALL BUT MIGHTY Bay Area company MightyFly is testing a bottleneck-busting autonomous cargo drone that can carry up to 96 small USPS packages in its internal cargo bay. The Cento is smaller than two compact cars, so it needs nothing more than two parking spaces for takeoff, landing, and automatic unloading. Users won’t even need to open up the drone; it deploys an autonomous conveyor belt from its cargo bay, so packages can be picked up and dropped off easily. TOP 10 SUPPLY CHAIN DISRUPTIONS (2022)
NO HIGH SCHOOL DEGREE? NO PROBLEM A February 2023 report from TradingPedia identifies the best jobs that do not require a college degree. • The most promising profession for those who have only a high school diploma (or equivalent) is flight attendant. They will be in high demand in the coming years — 5,700 new jobs will be added and those employed are expected to receive at least $62,280 per year. • Other great professions for those who have never stepped inside a college are lodging and gambling managers. These positions are projected to grow by a minimum of 17% over the next 7 years and the average wage is $67,770 and $89,190, respectively. • Hearing aid specialists and industrial machinery mechanics also have huge potential in the coming years with projected growth in employment of at least 14% and an annual wage of $58,000+.
1. Factory fire 2. Mergers
6. Labor disruption 7. Legal action 8. Cyber attack 9. Recall 10. Port disruption
& acquisitions 3. Business sale 4. Leadership transition 5. Factory disruption
Supply chain disruptions were up 32% year- over-year, with an overwhelming majority (91%) being human-caused, according to Resilinc’s EventWatchAI monitoring database.
February 2023 • Inbound Logistics 1
CONTENTS FEBRUARY 2023 | VOL. 43 | NO. 2 6
GOOD QUESTION What’s your biggest supply chain takeaway from peak season?
FEATURES 28 MANAGING YOUR
INFOCUS 1 INFO SNACKS 12 VERTICAL FOCUS: Home Improvement 14 NOTED 16 TAKEAWAYS 52 IN BRIEF 56 LAST MILE Easter candy by the numbers
AUTOMATED WAREHOUSE More than 80% of warehouses are not automated, but signs point to higher adoption soon. Here’s what to consider when it’s time to implement automation and robotics to improve warehouse operations. 34 SUPPLY CHAIN EDUCATION KINDLES NEW SKILLS Turning the page on disruption and upheaval, academic supply chain programs prepare future leaders and logisticians by emphasizing the most important skill sets. 40 LOGISTICS DISASTERS: HANG ON! Extreme weather events happen more frequently and with greater severity. Delivering disaster relief supplies quickly and efficiently requires logistics professionals to overcome some wet and wild challenges. 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
CONTENT PARTNERS KNOWLEDGE BASE 20 FINDING STABILITY IN A TURBULENT TRUCKLOAD MARKET Offered by SMC 3 21 OMNICHANNEL FULFILLMENT FOR RETAIL E-COMMERCE Offered by QSSI by consensus and lets team members course-correct on their own, which allows him to devote time to developing innovative solutions. INFO 46 WEB_CITE CITY 50 SUPPLY CHAIN INSIGHTS 54 CALENDAR 55 RESOURCE CENTER INPRACTICE 10 LEADERSHIP As CEO of Omni Logistics, JJ Schickel leads
INSIGHT 4 CHECKING IN Education: a call to action 6 GOOD QUESTION What’s your biggest supply chain takeaway from peak season? 8 10 TIPS Choosing a freight bill audit and payment provider 22 IT MATTERS Leveraging NFTs to elevate shipment security 24 PROCUREMENT 4 ways procurement will evolve in 2023 26 VIEWPOINT Collaboration and connectivity have to come before technology
2 Inbound Logistics • February 2023
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Education: A Call to Action
Vol. 43, No. 2 February 2023 THE MAGAZINE FOR DEMAND-DRIVEN ENTERPRISES www.inboundlogistics.com
STAFF PUBLISHER Keith G. Biondo
A lot of transportation, logistics, and supply chain expertise is cycling out of day-to-day operations in the United States and it is worrisome. I’m talking to you seasoned gray hairs. While enjoying retirement, can you find some time to transfer your decades of practice and experience to the next generation of logisticians and business leaders? The need for this skills dump has never been greater, considering the impact of the pandemic, the great
EDITOR Felecia J. Stratton
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CREATIVE DIRECTOR Jeof Vita
Keith Biondo, Publisher
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resignation, and the economic circumstances that we are currently using all our supply chain smarts to resolve. Many of you are at or past retirement age. You’ve weathered the pain and the challenges, and earned your supply chain stripes, right? We need to transfer the solutions and perspectives that you have crafted through years of facing and solving supply chain friction points to the up-and- comers facing the tough (tougher?) business challenges of today. They will be the next generation of business leaders, too. Inbound Logistics has profiled many enterprise leaders who started out as truck or forklift drivers, or warehouse workers. Over years of learning and trial and error, they now lead multi-million-dollar companies. That early experience served them well. I was speaking with a colleague recently who moved south from Chicago and took his years of supply chain experience and practical knowledge with him. That got me to thinking. It’s not just him; many others past retirement age are doing the same. He is not letting his hard-earned knowledge go to waste. He is retasking it by conducting virtual logistics courses, teaching at a local college, leading labs in a warehouse, and mentoring those interested in matching demand to supply as a career. Inbound Logistics regularly devotes time and content to recognizing logistics educators and the crucial work they do in honing the skills of current professionals who need new tools to face new challenges. Supply chain educators are also instrumental in arming a new generation of business leaders with the practical and technological skills to succeed in this new environment. But they cannot do it alone.
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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.
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GOODQUESTION Readers Weigh In
What’s your biggest supply chain takeaway from peak season?
PEAK SEASON IS A 12-MONTH JOB. You need to commit time and resources all year long
Extrapolate Demand at Your Own Peril
to analyzing past performance for opportunities to improve, forecasting future demand, and lining up both primary capacity and secondary carriers that can step in immediately in a crunch. –Shawn McCloud Senior Vice President, Operations Coyote Logistics EARLY DETECTION IS IMPORTANT. You can’t always forecast when the pendulum will swing the other way, especially with constant disruptions. Being able to monitor demand and sense changes in real time can give you a competitive advantage. –Lachelle Buchanan Vice President, Logility INBOUND OCEAN TEU s , as long as no backlogs exist, are a strong leading indicator for pending retail freight volumes. –Christopher Thornycroft EVP, Procurement, Redwood Logistics UNDERSTAND THE DIFFERENCE between a robust and a resilient supply chain. Robust means being able to absorb any shock without breaking, whereas resiliency recognizes disruption is inevitable, while also knowing how fast you can recover. To understand your resilience, ask, “Are we recovering better and faster than others?” –Vincent Cellard Vice President Commodity Management, Flex
Don’t mistake initial strong demand for sustained, continued demand. Expecting the buying rate to continue at pace when resupplying can lead to significant overstock issues if the customer type who’s purchasing has reached saturation point. Retailers need to tune into a diverse set of demand signals to get a more accurate gauge on inventory replenishment. –Jonah Ellin Chief Product Officer, 1010data Understand point-of-use demand and don’t overreact to buying patterns. Many companies saw demand surges, ramped up capacity, and moved to “just-in-case” inventory policies to buffer against future volatility. Now they are dealing with excess inventory and capacity. –Allen Jacques Industry Thought Leader, Kinaxis
COLLABORATE TO INNOVATE. Recently, consumers returned holiday purchases at record-highs, demanding agile supply chains that move both outbound and inbound. To meet consumer demand and improve reverse logistics, our industry needs to enable shared resources like data, warehousing, transportation, and labor to create efficiencies at scale. –Dan Ahrens Director, Customer Solutions, CHEP HAVING ACCESS TO CAPACITY translates to success, regardless of the intensity of a peak season. We leverage technology to connect to our network of LTL and truckload providers. –Doug Waggoner CEO, Echo Global Logistics
BE PREPARED FOR THE HIGHS AND THE LOWS. Plan for lots of different scenarios and be flexible enough that you can spin up capacity quickly and if the volume doesn’t come, that you’re able to reallocate resources and dollars. –Daniel Sokolovsky CEO and Co-Founder, WARP CONSUMERS ARE MORE INTERESTED IN SUSTAINABLE HOME DELIVERY options and this has become a delivery “persona” that retailers need to heed because it not only increases customer loyalty, but can also result in lower delivery costs. –Chris Jones EVP, Industry and Services, Descartes
6 Inbound Logistics • February 2023
TREAT PEOPLE FAIRLY. A peak season is great for one side (trucking) and complete chaos for the other side (shippers and receivers). If you treat the other side fairly and make an effort to take care of the other person, they will be there to take care of you when the down season arrives. –Tommy Fishburn VP, Business Development TA Services ENSURE TRUST AND TRANSPARENCY with customers through timely and effective communication. Something simple, like a widget clearly indicating when an item will be restocked, has a huge impact, preventing customer frustration and maintaining loyalty, even during periods of high demand or supply chain disruptions. –Charles Desjardins EVP and Managing Director Commerce Service North America Valtech DON’T TAKE ANYTHING FOR GRANTED. “Give me more time than I need” is one simple phrase I share with colleagues who rely on me to create transportation miracles daily for their just-in-time needs. I never get that time, but I repeat the phrase often in the hopes I’ll have a nice, leisurely shipment to monitor and announce its arrival. How glorious that would be in lieu of “Can you intercept that?” “How much longer?” and the ever-popular “Why does that cost so much?” –Brian Gaffney
Let’s Get Visible
More data = better insights = better visibility, which is the perennial takeaway from all peak seasons. The more deeply we understand our supply chains, the better the job we can do in translating those insights into lessons and actions. –Omer Abdullah Co-Founder, The Smart Cube The days of buying contracted capacity rates are ending. This past holiday peak season saw shipping rates actually decrease, bucking previous trends and forecasts. Contract rates rose even though spot rates fell. It’s clear the future of paying for capacity will rely on real-time network visibility rather than risky contracts.
–Rick Burnett CEO, LaneAxis
Ongoing technology investments can help manage visibility, mitigate risk, and make or break a supply chain during peak season. In preparation, shippers should be consistently tracking consumer behaviors to better understand what improvements are needed to avoid disruption while conducting high-volume shipments. –JJ Schickel CEO, Omni Logistics
THE VALUE OF RESILIENCY. That could mean having a more diverse supplier base to minimize the impact of any one country, having different options for transportation, or even a backup customs broker. Companies that made efforts to build resiliency were better off. –Tony Pelli Practice Director Security and Resilience, BSI INCORPORATE SAFEGUARDS. In the recent peak season, merchants found themselves incorporating more safeguards to protect against increasing cases of fraud while still ensuring a positive customer experience. Nearly 1 in 3 SMBs report
that fraud significantly impacts profitability, as they receive empty boxes, incorrect items, or nothing at all. –Eduardo Lopez-Soriano VP, UPS Capital SPREAD IT OUT. In 2022, retailers spread out the peak season by offering earlier incentives to consumers. Early planning of inventory
and spreading out peak buying resulted in better sales, reduced inventory shortages, and fewer
constraints on carriers—especially last- mile carriers. Creating diversity within both suppliers and carriers also helped companies navigate peak season. –Steven C. Beda EVP, Customer Success, Trax
Supply Chain Specialist Natural Fiber Welding
PLAN AHEAD AND COMMUNICATE CLEARLY. The most successful retailers were ones that planned ahead for peak season by prioritizing clear communication and collaborative planning. Retailers that avoided last-minute changes that impacted how or when customers received orders were able to foster strong relationships with customers through trust and loyalty—and in turn became the most profitable.
Have a great answer to a good question? Be sure to participate next month. We want to know: How will supply chain management transform in the next five years? We’ll publish some answers. Tell us at email@example.com or tweet us @ILMAGAZINE #ILGOODQUESTION
–Kelton Kosik Senior Director Supply Chain Strategy, Ware2Go
February 2023 • Inbound Logistics 7
When it’s time to select a freight audit and payment provider, evaluate the services and solutions each prospective company offers against what your company needs. Here are 10 capabilities to consider. Choosing a Freight Bill Audit and Payment Provider
experience, look for case studies, awards, and reviews from past and current customers. 8 DETERMINE IF THE PROVIDER CAN AUTO-RATE ALL TRANSPORTATION MODES. Auto-rating across all transportation modes helps streamline billing processes
1 CONSIDER IF THE PROVIDER HAS FULL-TIME EMPLOYEES OUTSIDE OF NORTH AMERICA.
If you do business globally, choosing a freight audit and payment provider with global employees can help streamline transactions. Providers with full-time staff around the world can offer multilingual support. A worldwide presence also demonstrates international business is an important part of their operations.
2 GAIN TRANSPARENCY EDI TRANSACTIONS. EDI transaction imaging capabilities securely document freight expenditures and ensure data is stored securely and is easily accessible. Virtual images also provide transparency throughout the transaction process. 3 MEET COUNTRY-SPECIFIC COMPLIANCE NEEDS. International payments can involve navigating different WITH DIGITAL IMAGES OF regional compliance requirements. Global trade demands certain financial transactions to be conducted through local bank accounts and in specific currencies. Meeting the requirements of each region is essential to the completion of payments. 4 EXPLORE ONLINE EXCEPTION MANAGEMENT. Online exception management solutions allow shippers and transportation providers to collaborate on invoices requiring additional information or approval
for payment—making sure payments are delivered quickly, while ensuring transparency for all parties involved. 5 INCREASE ACCURACY WITH DATA NORMALIZATION AND CLEANSING. Data normalization requires that all freight invoices are provided in an electronic format so no manual entry is needed and data can be standardized for accuracy. Data cleansing ensures all invoice information is accurate and up-to-date before entering the payment processing cycle. 6 LEVERAGE A REPORTING AND ANALYTICS SOLUTION. Choose a freight audit and payment provider that can
accurately and efficiently identify freight billing discrepancies, as well as monitor key performance indicators of your carrier partner’s service. Having access to detailed analytics allows for transparency when evaluating costs associated with a carrier invoice and gauging the effectiveness of transportation service-level agreements. A thorough reporting function provides opportunities to gain insights into shipping trends and adjust operations. 7 PRIORITIZE AND EVALUATE EXPERIENCE. With the diverse array of freight audit and payment providers available, it is important to choose one that best aligns with your business needs. When assessing their level of
and ensures accurate shipment pricing. This
functionality is especially helpful for shippers that use multiple transportation providers or manage shipments of many sizes. 9 AUTOMATE YOUR INVOICE PROCESSING prospective freight bill audit and payment provider has an automated system that recognizes your unique BUSINESS RULES. Determine if your internal invoice processing business rules. Being able to automate these rules ensures they are always triggered and frees up your time to handle other tasks. This feature can help ensure data accuracy and reliability.
10 LOOK BEYOND COSTS.
BEWARE THE ECONOMICAL PROVIDER. Consider all of the options available to you before deciding on a freight bill audit and payment provider. It can be tempting to pick the least-expensive option, but be wary. All providers are different, so research their reputation and understand exactly what services they offer when making your decision.
SOURCE: KEITH SNAVELY, SENIOR VICE PRESIDENT, GLOBAL SALES, nVISION GLOBAL
8 Inbound Logistics • February 2023
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LEADERSHIP Conversations with the Captains of Industry
JJ Schickel remembers the silence that swallowed even high- value shipments in transit in the years before the internet. It was the early 1990s, when Schickel served as chief financial officer at a trucking firm that moved imported vehicles from ports to dealerships. “A truckload of Porsches could leave the port, and you wouldn’t know where it was until it arrived and somebody dialed the rotary phone to say, ‘It’s here,’” Schickel recalls. The prospect of using digital technology to more effectively run a business excited Schickel back then, and it continues to excite him now in his role as CEO of Dallas-based Omni Logistics. Schickel filled us in on his work at Omni and how he has developed as a leader. IL: You started your career in accounting. How did you end up in logistics? After earning a master’s degree in accounting, I was at Deloitte for a while and then worked my way into the technology department of an investment bank. There, I had the chance to work on IPOs for logistics technology companies. When I took my job at the trucking company, I knew there was a lot of opportunity for improvement when it came to technology. I worked with the team to build out a logistics IT platform, and I fell in love with the industry. The people are great, and if you work hard, show up, and do what you say you are going to do, there is still a lot of opportunity. IL: What in your early career helped to shape you as a leader? I’ve been fortunate to be around many incredible mentors. But top of mind is my experience with Brad Jacobs, currently executive chairman at XPO Logistics. This was through my work at EVE Partners, an investment group I co-founded in 2002. Brad is a terrific leader and a great person. While all my mentors have influenced my work, observing his experiences at United Waste Systems and United Rentals shows the importance of scale in building great results for customers, which had a foundational influence on what we do at Omni today. IL: What keeps your customers awake at night, and how does Omni help them sleep better? This has been a crazy time for all the obvious reasons— COVID, port congestion, and the war in Ukraine, for example.
JJ Schickel CEO Omni Logistics
Because he leads by consensus and allows team members to course- correct on their own, JJ Schickel can devote his time to creating innovative solutions that help customers sleep better.
by Merrill Douglas
10 Inbound Logistics • February 2023
people to course-correct on their own. We’re also consensus- driven; we try to make decisions through our senior leadership team. The tough decisions tend to be made by the group. I can’t think of a time when I had to be the tie-breaker. IL: What’s the hardest part of your job? Omni is my family, but I also have another family. I’ve been married for 24 years, and I have three grown kids. Those two families are the most important things in my life, and maintaining a balance between them is hard. We Found a Machine… In 2020, during the first wave of COVID, Omni Logistics, like many other service providers, flew planeloads of personal protective equipment into the United States for its customers. “But there was a time when it was difficult to source masks and gloves,” recalls JJ Schickel. Then Omni’s leadership team in Hong Kong made an unusual suggestion. They found a machine to make masks, and they found all the materials that are necessary inside a mask. They asked for approval to start making masks and then shipping them. Omni bought the machine. “It wasn’t cheap,” Schickel says. “We bought all the materials. Our team started cranking out masks so we could get them to our customers and employees. They did an amazing job, and our customers and employees were thrilled. “I’m proud that our unique culture empowers our team members to come up with innovative solutions that help improve peoples’ lives,” he adds.
But what really keeps our customers awake is the need for predictability for the C-suite. The CFOs and management teams of many of our large customers have public stakeholders who rely on them for predictability. We spend a lot more time than we used to communicating with the C-suite and trying to create dynamic supply chains that allow them to toggle between certainty, service demands, and price. IL: Does that mean, for example, using different ports as needed, or switching modes? Yes. As a non-asset-based provider using technology, we stitch together thousands of vendors to create various solutions for our customers, aggregating their purchasing power to create outcomes they couldn’t achieve on their own. For example, when there’s a logjam on the ocean, we ask what other modes we can use to create a solution. If you ask that question on the same day you need to move a load, that’s going to be expensive. Staying ahead of a fluid market and creating a dynamic capability has been a huge factor in the marketplace in the past couple of years. IL: What’s new and interesting at Omni Logistics? In our senior leadership meetings, we constantly think about innovation. Our main focus is on initiatives that reduce our unit costs and provide a great outcome for our customers. One of those is the use of robotic dispatch to give customers more autonomy over their freight decisions. Here’s a very simple example based on domestic shipments. The customer indicates how much they’re willing to pay to ship a load, and the software puts the load out to bid to pre- qualified carriers within a certain geographic area. At the end of a set period, the software assigns the load at the specified price—or even at a lower price, depending on the bids. If the system can’t find a solution at the desired price, it kicks the shipment out to a human. That employee then goes into problem-solving mode, which is much more fulfilling than working in execution mode all day. This is an effective solution with a great outcome for the customer. IL: How do you give criticism or correction when it’s needed? I don’t usually have to do that. Our culture is entrepreneurial, and our job is to provide tools that allow
IL: What have you read or listened to lately that you’d recommend?
Although it’s not new, Hit Refresh by Satya Nadella, CEO of Microsoft, is a great leadership book, and he does an excellent job of emphasizing the importance of empathy in the workplace. Also, David Rubenstein, founder of The Carlyle Group, has incredible guests on his podcast. IL: Outside of work, how do you like to spend your time? I hit the treadmill regularly, and I spend a lot of time outside. I play guitar and enjoy music. I’m an empty nester, which is a total bummer because I loved the chaos of having a full agenda on the weekends. But I do a lot of boating and hiking and I try to spend as much time as possible with family and friends. n
February 2023 • Inbound Logistics 11
Home improvement retailer Lowe’s is applying supply chain technology to its efforts to thwart shoplifters. As many retailers combat shrinkage by placing product out of reach of potential shoplifters, Lowe’s is exploring a different approach by making pilfered items useless to shoplifters. It has introduced Project Unlock, which combines RFID and blockchain technology to protect both retailers and consumers. Here’s how it works. Lowe’s asks manufacturers to embed a wireless RFID chip into a powered product, such as a drill. This tag is preloaded with the item’s serial number and the box’s barcode and disables operation until scanned at the point-of-sale. When a shopper hits the checkout line, a point- of-sale RFID scanner reads all tags in range, finds the tool, and writes a unique secret key value that activates the tool for use. What this all means is that if a power tool is stolen, it will not work. In tandem with the RFID capabilities, Project Unlock uses blockchain to create an anonymous record of product purchases. Legitimate purchases are recorded to the blockchain, which contains no personal information. Retailers, manufacturers, and law enforcement can use this information to validate authentic purchases. SUPPLY CHAIN TECH TAKES ON LOSS PREVENTION
BUILDING SMARTER HOMES Consumers love their smart home devices. Spending on smart home hardware that includes individual devices, such as automated lighting systems and controllers, grew in 2022. It surpassed $30 billion worldwide, up 15% over 2021 spending, according to an ABI Research market data report. Manufacturers have taken notice. The largest consumer technology and home goods players, including Amazon, Apple, and Google, have expanded their product ranges to connect into existing smart home systems, finds the report. To simplify purchase and installation of new devices for consumers, Version 1.0 of the Matter specification, a royalty-free standard for home automation devices that enables cross-vendor device interoperability, was released in October 2022 and may spur further growth. Version 2.0 could arrive in spring 2023 and may include support for robotic vacuum cleaners, ambient motion and presence sensing, smoke and carbon monoxide detectors, environmental sensing and controls, closure sensors, energy management, Wi-Fi access points, cameras, and major appliances. Other growth may come from previously under-served markets such as multi-dwelling units and hospitality, the report notes. “That is not to say growth will be even across device categories or vendors,” says Jonathan Collins, smart homes and buildings research director at ABI Research. “Interoperability, functionality, and application integration will all be key to spending as consumers increasingly transition from single device purchasing to building out whole-home systems.”
12 Inbound Logistics • February 2023
TAKING INVENTORY IN HAND The Home Depot is putting inventory management in the hands of in-store associates. A new app, named Sidekick, helps associates at more than 600 stores more efficiently prioritize tasks. The app, which integrates into hdPhones—mobile devices previously provided to Home Depot associates—uses machine learning (ML) to guide priorities. For example, Sidekick notifies associates when specific shelves need to be restocked and lets them know where to find excess product in the store. Specifically, the app: ● Leverages a cloud-enabled ML algorithm to determine which tasks are actionable and when they should be completed. ● Utilizes machine vision to detect and fill out-of-stock products, as well as to locate products in stores. ● Alerts associates to tasks that need to be completed first via a common tasking engine. ● Shows where and how to complete a task in a dashboard with associate and manager views.
35% of consumers responding to an Ikea survey say they expect to cancel or postpone home improvement plans as a result of concerns about the general economy due to inflation. The project also adds four new rail spurs at the existing manufacturing site and leaves 200,000 square feet available for future expansion. Sherwin-Williams expects the $300-million project to be completed by the end of 2024. The company plans to add a 36,000-square- foot extension to its existing 200,000-square- foot manufacturing facility and build a new 800,000-square-foot distribution and fleet transportation center. SHERWIN-WILLIAMS BRUSHES UP DC EXPANSION The Sherwin-Williams Company displayed significant interest in both the domestic and European markets by acquiring four coatings companies on the continent in 2022. The paint company, however, remains focused on the U.S. market, as evidenced by its recent groundbreaking in Statesville, North Carolina, for an expansion of manufacturing and distribution facilities.
● Integrates with other platforms to ensure all data and task prioritization is up-to-date and aligned with broader business needs.
SETTING SALE The home improvement supply chain gets busier in early spring as home buying season kicks off and sellers hoping for quick sales begin projects to increase curb appeal. Sixty-five percent of recent sellers responding to research conducted by The Harris Poll and commissioned by Zillow took on at least two home improvement projects prior to listing their homes for sale. The most common projects are interior painting (40%), carpet cleaning (35%), and landscaping (33%). About 3 in 4 sellers (74%) in the past two years say they believe that improvement projects helped their home sell. “The first step to customer service is being in stock with the right product that's easy to locate,” says Muzammil Akram, vice president for store technology, The Home Depot. “Equipping our associates with innovative technology is one key factor in delivering on that initiative.”
February 2023 • Inbound Logistics 13
NOTED [ IN FOCUS ]
The Supply Chain in Brief
> GOOD WORKS
n Material handling automation integrator Hy-Tek has acquired Winchester Industrial Controls, which provides control systems for automated material handling systems. n GEODIS has signed an agreement to acquire trans- o-flex, which specializes in temperature-controlled transport for pharmaceutical products as well as time- definite delivery of products for the cosmetics and high-tech industries.
• Toyota Material Handling Solutions (TMHS) donated $2,500 to The Foodbank of Southern California. TMHS associates (pictured) also collected 500 pounds of canned goods to accompany the cash donation. • The American Logistics Aid Network (ALAN) launched an initiative funded through a Walmart Foundation grant to provide disaster-focused non-profits with the opportunity to apply best supply chain practices gleaned from other humanitarian organizations as well as the commercial logistics community. • J.B. Hunt Transport Services was inducted into the Anderson Assembly at The University of Texas MD Anderson Cancer Center, a society created to recognize philanthropic donors who have made a lifetime commitment to supporting the mission of MD Anderson. J.B. Hunt created The J.B. Hunt Transport Services, Inc. Cancer Prevention and Control Endowment with a $1 million gift to MD Anderson.
n Creopack, a company that designs and manufactures custom protective packaging, acquired Emballages Montreal Express, which offers handling, packaging, and storage services for oversized equipment. The deal gives Creopack 35,000 square feet of additional storage space equipped with a high-capacity overhead crane.
n Descartes, a supply chain technology company, purchased Supply Vision, which provides modular applications that help logistics service providers coordinate shipments from end to end. n RoadOne IntermodaLogistics, a single-source intermodal, warehouse and logistics services company, acquired The Transporter, a regional intermodal service provider with office locations in Houston, Dallas, and Laredo, Texas. n Jones Logistics, a national specialized transportation and logistics company, acquired Nationwide Express, which provides dedicated trucking services, warehousing, and 3PL services. Its geographic footprint includes operations in Alabama, Arkansas, Georgia, Kentucky, Mississippi, Oklahoma, Tennessee, and Texas.
> UP THE CHAIN
• Amy's Kitchen announced several new supply chain
leadership roles. Oksana Woloszczuk joins in the newly created executive
role of chief supply chain officer. Steve Kravariotis joins as vice president of supply chain planning and David Griego as senior director of engineering.
14 Inbound Logistics • February 2023
> SEALED DEALS
> GREEN SEEDS
n DSV launched an initiative to reduce its environmental footprint by refurbishing rather
• To improve efficiencies in its main U.S. warehouse near Cleveland, wholesale
sealing supplier anyseal implemented AutoStore empowered by Kardex. The high-density storage and retrieval solution optimizes available space, enabling anyseal to manage large SKU counts more efficiently. • Onia and WeWoreWhat have partnered with 3PL fulfillment company Boxzooka to handle their drop-shipping and B2C fulfillment needs, as well as enabling international shipping with its proprietary landed-cost technology. • ArrowStream has partnered with Freddy's Frozen Custard & Steakburgers, which operates 100,000 restaurant locations with 1,300 distribution locations. The ArrowStream Central solution allows Freddy's to quickly identify overcharges and reduce pricing errors by streamlining its update and communication process. • Everything But Water, a women’s swimwear and resortwear retailer, has deployed several Manhattan Active Omni offerings in retail locations across the country. The platform breaks down silos between digital and physical systems, allowing store associates a 360-degree view of customer information and the ability to transact against merchandise regardless of where the item physically resides. • Renfro Brands, a designer and manufacturer of socks and legwear, has selected the TrusTrace platform to centralize its current supply chain data for continued compliance, as well as to measure and document progress toward its sustainability goals. • Murdoch's Ranch & Home Supply has renewed its partnership with Tecsys to provide order management software across the retailer’s online and physical stores. Tecsys’ Omni OMS provides Murdoch’s shoppers with an enhanced digital experience, while improving shipping speed and order consolidation.
than replacing its trailers. In 2023, the transport and logistics company will double the life of 1,100 trailers, kicking off a new trailer refurbishment program through which all DSV-owned trailers in its European network will undergo refurbishment at least once before the company returns the trailers to the manufacturer.
n American Airlines Cargo is transitioning to a biodegradable plastic wrap for use in its cargo operations. The carrier has begun to replace its current plastic products with BioNatur Plastics, launched by M&G Packaging. The adoption has allowed American to reduce its long- term plastic waste in landfills by more than 130,000 pounds, or 6.4 million water bottles, in 2022 alone.
• Global logistics company Ascent earned recognition as a Partner-level supplier for 2022 in the John Deere Achieving Excellence Program for the eighth consecutive year. The honor recognizes Ascent’s dedication to providing products and service of outstanding quality as well as its commitment to continuous improvement. • Leonard’s Express won the 47th annual Truckload Carriers Association Fleet Safety Award for fleets that travel between 50 and 100 million miles. Winners are selected based on the carrier’s accident-to- mileage ratio, a metric used to show how many on-road accidents a fleet has in a calendar year. • Supply chain provider NFI was recognized in InHerSight’s recent list of The Top 20 Best Logistics and Supply Chain Companies to Work For: As Rated by the Women Who Work There. NFI earned the ninth spot on the list by offering equal opportunities for women and men, flexible work hours, and women in leadership.
• Speedheater, a supplier of innovative paint removal products, entered into an agreement with 3PL American MetsCube to facilitate its expansion into the United States.
February 2023 • Inbound Logistics 15
TAKEAWAYS Shaping the Future of the Global Supply Chain
What Keeps CEOs Up at Night?
Fears of inflation, recession, and overall slow growth are the top worries interrupting the sleep of many CEOs around the world. Slightly more than half (51%) of CEOs surveyed by The Conference Board also say that they aren’t expecting the economy to pick up steam until late in 2023, or even 2024. “CEOs say they plan to mitigate risk by accelerating innovation and digital transformation, pursuing new opportunities in higher-growth markets, and revising business models—the three most-cited actions,” says Dana Peterson, chief economist for The Conference Board. Some concerns are abating. Although COVID remains top of mind for many CEOs operating in Asia, their U.S. counterparts seem to have placed the issue in their rear- view mirrors. By-products of the pandemic, such as labor shortages, remain constant. Finding and retaining talent continues to be a huge challenge that nearly all CEOs place at the top of their internal priority list. “To attract and retain talent—the biggest internal worry of CEOs worldwide—leaders are focused on building stronger cultures,” says Rebecca Ray, PhD, executive vice president, human capital, The Conference Board. “But some key factors that contribute to such an environment— including addressing pay inequality, development opportunities, and a psychologically safe workplace—are relatively low on their list of priorities. “This presents an opportunity for C-suites to revisit their companies’ goals for strengthening organizational culture and the specific actions required to do so,” she adds.
SMBs FIND WAYS TO COMPETE The business disruptions of the past few years have made it harder to optimize supply chains and forced all businesses to examine the best use of resources. It’s tough enough for large companies with deep pockets, but how are small and mid-sized businesses (SMBs) adapting? They’re examining any and all options—including nearshoring, cooperative procurement, and technology adoption—according to a Capterra survey. Here’s where SMBs are spending their energy and money as they deal with disruption and discover new best practices: ● 88% plan to or are currently switching at least some of their suppliers to ones closer to the United States. ● 64% have joined or plan to join a group purchasing organization to help manage procurement costs and challenges. ● 90% are committed to implementing emerging technologies. SMBs are increasing or maintaining investments in the Internet of Things (42%), blockchain/smart contracts (41%), and artificial intelligence (39%). Through strong seasonal forecasting, SMBs also have been able to avoid many of the pitfalls larger retailers face. 67% say their forecasting techniques helped them avoid excess inventory. But many SMBs entered 2023 with some trepidation, concerned about inflation (65%), inventory shortcomings (45%), and economic recession (42%).
16 Inbound Logistics • February 2023
Snail Mail Goes Green
The United States Postal Service (USPS) is ready to deliver your mail greener and quieter. As it begins to replace its aging fleet of more than
220,000 vehicles, USPS expects to acquire at least 66,000 battery electric delivery vehicles as part of its 106,000 vehicle acquisition plan between now and 2028. As part of a $9-billion investment, the USPS anticipates increasing the quantity of purpose-built Next Generation Delivery Vehicles to a minimum of 60,000. Of these, at least 45,000 will be battery electric by 2028. Plans call for vehicle acquisitions delivered in 2026 and thereafter to be 100% electric. As it explores the possibility of a 100% electric fleet, USPS also expects to purchase an additional 21,000 battery electric delivery vehicles through 2028. Mail carriers also will see benefits. The new vehicles will offer air conditioning and advanced safety technology—options unavailable in the older models the USPS is replacing.
FOLLOW THE PROCESS Process automation plays an important role in building supply chains, finds a benchmark report from Precisely and SAPinsider. A majority (89%) of the SAPinsider members surveyed indicate that they believe process automation in the supply chain is either “important” or “very important” to attain digital transformation objectives. Respondents cite resiliency (51%) and agility (46%) as the top drivers for process automation. The report, however, points to a gap between where respondents want the industry to be versus where it is now. For example, 72% say less than 50% of their supply chain processes are currently automated, while another 33% automate just 25% of their processes. Almost half of respondents are looking to close that gap, with 47% saying they are considering implementing artificial intelligence and machine learning technologies over the next 24 months. Respondents also say that process automation has led to benefits that include: ● End-to-end process visibility (82%) ● Increased process efficiency (79%) ● Defining and documenting standardization (77%) ● Integrated processes across the end-to-end supply chain (75%) ● Building internal skill sets (72%)
February 2023 • Inbound Logistics 17
With a Little Help From My Friendshoring For more than 40 years, economic policies encouraged companies in the developed world to move production offshore to reap the benets of cheap labor and raw materials. But times are changing. Over-reliance on foreign supply chains and geopolitical events have led many companies to explore nearshoring and friendshoring opportunities to help prevent logistics hiccups. Some companies are rethinking their supply chain plans to include closer and friendlier partners, nds a recent Coupa survey. For example, the data shows that in the next six months to one year: ● 28% of respondent companies will reduce dependency on suppliers from any one region. ● 28% say they rely on suppliers that are geographically closer to production and distribution facilities. ● 31% plan to strengthen relationships with their current suppliers and/or buyers. “When supply gets constrained and capacities and materials go on allocation, suppliers tend to prioritize their preferred customers,” says Dr. Madhav Durbha, vice president of supply chain innovation, Coupa Software. “Organizations are gaining this status as ‘preferred customers’ through collaborating with suppliers by providing visibility into their anticipated demand and ensuring payments happen on time.” As companies diversify operations, many see the benets of closer economic relationships with businesses in countries that closely align politically. For example, the United States and India hosted a summit in January 2023 to explore efforts to enhance the resiliency and sustainability of trade between the two allies so both are “better able to withstand current and future global challenges,” according to U.S. Treasury Secretary Janet Yellen. The close relationship between the countries may culminate in companies moving operations out of countries less friendly with the United States and into the Southeast Asian nation. Case in point: Container xChange published survey results that show 67% of respondents consider India and Vietnam as attractive alternatives for a China-plus-one strategy. Mexico is another U.S. trade partner beneting from both nearshoring and friendshoring. In 2022, Mexican imports to the United States rose 19.5% year-over-year to reach $479.6 billion according to Mexico’s National Institute of Statistics, Geography and Informatics. Mexico houses assembly plants for GM, Toyota, BMW, Honda, Volkswagen, Mazda and others, and is the top importer of motor vehicle parts made in the United States.
BYE, BYE BARCODE?
For more than 70 years, the barcode has been an integral component of nearly all supply chains. But is the ubiquitous technology taking its last breaths after Amazon announced it is developing a new warehouse reader technology? The retail giant indicates that barcode reading may hinder plans as it integrates robotics solutions into warehouses and distribution centers. Amazon says that legacy code-reading technology has gotten in the way as it attempts to move forward with robotics. Variances in barcode placement, along with sizes and shapes of products, create di culties for robots attempting to read the codes. Amazon anticipates that machine learning can change the game. Currently, Amazon needs to catalog products by photographing them; an intimidating step given how many dierent SKUs the retailer oers. In an early pilot, images were translated into a vector, which allowed Amazon to apply machine learning to the process. Early attempts demonstrated that the robots were about 80% accurate in matching the image with the item. With a few tweaks, investments, and time, match rates are now near 99%, according to the project team. The new process also pairs with Amazon’s inventory tracking system that can identify specific bins that house 12 dierent products. This can simplify the process by allowing the algorithm to identify items against only those within a specific bin.
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