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Microsoft Reinvents its Supply Chain by Leveraging SAP Ariba & Intrigo Systems

Microsoft Corp. has one of the most complex supply chains in the world.

And to keep it humming and ensure supply keeps up with demand for its hottest products, the company is reinventing its supply chain.

In a newly released Webcast (watch the video above), the company discusses how it is teaming with SAP Ariba and Intrigo Systems to create a scalable, modern platform to support the efficient, cost-effective manufacturing of its most popular products, including the Xbox and Surface.

“At Microsoft, our mission is to empower every person and organization on the planet to achieve more. And our strategy to achieve this is to build best-in-class systems and platforms and productivity systems,” said Ali Khaki, Principal PM, Supply Chain Engineering, Microsoft.

“When we looked at our supply chain, it was clear we needed to build a flexible, scalable platform that could support the complexity of our hardware business.”

And it is using SAP Ariba solutions for direct spend to do it.

“The Ariba® Network is the backbone for Xbox and Surface line of products supply chain,” Khaki said.

Through the Ariba Network and the cloud-based applications delivered on it – including SAP Ariba Supply Chain Collaboration™, Microsoft has created a modern platform from which it can safely and easily collaborate with multiple tiers of contract manufacturers and suppliers across key supply chain planning and execution processes, including:

  • Sharing production forecasts, orders, quality, and inventory information.
  • Anticipating and resolving supply assurance problems.
  • Onboarding suppliers.

And the company is seeing results. Since implementing the solutions with Intrigo’s support, Microsoft has:

  • Enabled multi-tier planning and collaboration with contract manufacturers and suppliers.
  • Reduced the supplier commit process from three days to 30 minutes.
  • Cut the time it takes to onboarding for suppliers from four months to four days.
  • Standardized vendor engagement through B2B, flat files and web-user interface.

“It’s a very clear and transparent process because of all the communication that happens within the SAP Ariba system itself,” Khaki said.

“And it has allowed us to create a very positive user experience for everyone involved in it.”

To hear more from Khaki on Microsoft’s supply chain transformation, listen to the Webcast “Microsoft Re-invents Its Manufacturing Supply Chain” above (download slide deck).

To learn more about SAP Ariba’s direct spend solutions and the value they can deliver, visit www.ariba.com.

Related Resources

Download the Paper

Challenges in Your Supply Chain & a Directional Approach to Integrated Business Planning
This first part of this two-part paper evaluates how one should take advantage of the new capabilities SAP brings to the planning arena, the second part of the paper evaluates the complexity of options faced by customers who may be interested in IBP. Download Now!


Download the Paper

9 Steps to Achieving S&OP Nirvana
Supply chains have encountered tremendous challenges triggered by the complexities of globalization, this necessitates that they adopt industry best practices to gain a deeper understanding of the marketplace and have a clear edge over the competition. Download Now!

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Elon Musk “Tesla Semi Truck Will Blow Your Mind”

Tomorrow’s semi-truck unveiling is the next logical step for Elon Musk’s Tesla company who in June 2016 revealed through the company’s second Master Planthat it was looking to enter the commercial trucking industry.

Like most of the upcoming Tesla vehicles announced in Musk’s’ ‘Master Plan Part Deux’, not much is known about the semi-truck vehicle.

Here’s the relevant part of the 2016 ‘Master Plan‘:

“In addition to consumer vehicles, there are two other types of electric vehicle needed: heavy-duty trucks and high passenger-density urban transport. Both are in the early stages of development at Tesla and should be ready for unveiling next year. We believe the Tesla Semi will deliver a substantial reduction in the cost of cargo transport while increasing safety and making it really fun to operate.”

The company is set to unveil the all-electric semi truck tomorrow at a live-streamed event starting at 8 p.m. PT (11 p.m. ET).

Musk tweeted Sunday about the event.

As reported by Teslarati, an all-electric truck would be less expensive to operate than its gas and diesel counterparts on account of reduced maintenance, fuel, and reduced insurance costs once autonomous “platooning” technology is in place.

According to a previous report by Adam Jonas of Morgan Stanley, a Tesla Semi could result in operational cost reductions of 70% over existing trucks on the market.

Scott Perry, Ryder CTO

“Out of the gate, I think Tesla’s semi truck will target regional hauling”Scott Perry, Chief Operating Officer Nikola Motor Company

As mentioned before details of Tesla’s Semi has remained light, with the only hint being that the all-electric truck drives like a sports car, according to Musk, and a “seriously next level” truck that can compete in the heavy-duty, long-haul trucking sector.

Initial reports peg Tesla’s electric hauler to have a range of 200 to 300 miles, making the semi-truck better suited for short-haul operations.

According to former Ryder CTO, Scott Perry (now Chief Operating Officer at Nikola Motor Company) who reportedly met with Tesla officials and learned that the company was looking to target regional hauling with its upcoming semi-truck, Tesla could also have a strategy for tackling long distance hauling.

“I’m not going to count them out for having a strategy for longer distances or ranges, but right out of the gate I think that’s where they’ll start,” said Perry.

Tesla will likely focus on the short-haul segment first, due to the lower cost barrier to entry because of the smaller battery packs needed, but also because the market has the broadest range of applications that can benefit from an all-electric semi-truck. Teslarati previously analyzed the ROI for a Tesla Semi and found that there’s a clear business case for it in the short-haul industry.

Tesla will go up against other companies trying to develop electric semi-trucks and smaller delivery vehicles.

Other potential rivals include BoschCummins, and Daimler. A number of companies such as Siemens have pilot programs already in place to test the viability of electrifying commercial trucks. And there are a few startups also pursuing some variant of that electric trucking or delivery van goal, including ChanjeNikola, and Wrightspeed.

Supply Chain 24/7 will provide more details following tomorrow’s “mind-blowing” Tesla semi-truck unveiling.

Related: Cummins Taking on Tesla with Electric Semi Truck

Cummins Taking on Tesla with Electric Semi Truck

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How to Build a Supply Chain Champion Following Chicago Cubs Theo Epstein’s 5R Strategy

On November 2, 2016, the Chicago Cubs did the unthinkable:

They won the World Series after coming back from a 1-3 deficit to the Cleveland Indians.

For Cubs fans, the victory marked the end of a 108-year streak of competitive futility.

Although the Cubs game seven, extra-inning victory is inspirational, you may be wondering: “As a supply chain professional, why should I care?”

Answer: Because of Theo Epstein, the Cubs President of Baseball Operations, knows how to build a championship team, a task that is likely high on your to-do list.

Vitally, Epstein’s role in the Cubs turnaround wasn’t a fluke.

In 2004, Epstein, as Red Sox General Manager, helped Boston vanquish the Curse of the Bambino and end an 86-year title drought.

Deciphering how Theo Epstein took the Cubs, a perennial loser, to a World Series championship has been a hot topic in the sports world.

Based on our 20-plus years working with supply chain leaders, we argue that Theo Epstein’s job assembling a champion on the field is a model for the supply chain leader’s quest to build a winning supply chain.

Let’s take a closer look at how Epstein transformed the Cubs into champions.

His approach highlights five principles of supply chain design that we call the 5Rs (Figure 1). The 5Rs have enabled companies from Amazon to Zara to win on the world’s toughest playing field – today’s global marketplace.

Figure 1
The 5Rs of Supply Chain Excellence

Strategic Supply Chain Management: The Five Disciplines for Top Performance

Know the Rules and Break Them When Necessary

If you want to win on the baseball field – or in the marketplace – you need to know the rules of the game. The rules define not just your strategy and value-added capabilities, but also your team’s composition.

Rules, however, change and disrupt industries and dethrone champions. For proof, look no further than A&P, Compaq, and Pan Am. Thus, it’s not enough to know the rules; you also need to pay attention to how they are changing. Spotting inflection points before rivals – and responding effectively – can give you a competitive edge.

Andy Grove modeled this reality when he made the case for Intel to make the leap from RAM/DRAM to CPUs before the memory market crashed. Grove’s anticipation of a threat before it was widely discerned is a big reason you know the phrase “Intel Inside.”

Of course, sometimes the rules aren’t fair, which is a plus if they favor you and a travesty if they don’t. When you find your team disadvantaged, your job is to change the rules.

This is the scenario Billy Bean, general manager of the Oakland Athletics, faced in 2001. The A’s $40 million payroll couldn’t compete with the New York Yankees $115 million player budget. Not only did the Yankees beat the A’s in the divisional championship series but they signed the A’s Jason Giambi to a big-budget free agent contract.

To compete, Bean needed to build a different type of team. He stepped away from traditional approaches to player evaluation and embraced sabermetrics, a novel statistical approach that became known as “Moneyball.” His goal: Identify players undervalued by other teams. Bill Henry, the new owner of the Boston Red Sox, saw value in Bean’s approach and offered him the Sox’ GM job.

When Bean declined, Theo Epstein stepped in. He levered Boston’s big payroll with sabermetrics to assemble a team that won the World Series in 2004, followed by two more championships in 2007 and 2013.

Great companies do the same thing. They execute within the rules better than rivals, or they exploit opportunities to change the rules.

Search Amazon

Consider Amazon, the poster child for e-commerce. Launched in 1995 as the “Earth’s largest bookstore,” Amazon began life as a pure-play e-tailer, with no inventory or brick and mortar presence.

It acted as a broker, linking customers to publishers. Amazon went public in 1997 and immediately began to rewrite the rules of online retailing and expand its product line. At a time when other organizations were outsourcing fulfillment operations, Amazon invested in its own distribution network.

By 2016, Amazon operated 383 fulfillment centers worldwide, supporting sales of $136 billion. Amazon even began to build out an in-house network of trucks and planes to “own” the delivery experience all the way to the customer door.

Today, Amazon sports a market capitalization of $400 billion. Its allure is a willingness to push boundaries and redefines rules. Amazon made two-day “Prime” delivery an industry standard that customers were willing to subscribe to. Amazon also enabled eager consumers and intrigued investors to envision the day when drones, predictive shipping, and check-out free shopping will be common.

The result: Amazon is forecast to reach half a trillion in sales over the next decade. More amazing, Amazon achieved this unparalleled success without ever making a meaningful profit on operations. According to The Economist, 92% of Amazon’s value is due to profits that won’t be earned until after 2020. Amazon’s story stresses a point that you need to remember.

To build a winning team, you must change the competitive rules even as you execute the daylights out of existing rules. The remaining four Rs of supply chain design can help.

Assess Readiness; Your Own and That of Potential Partners

By winning the World Series, the Cubs proved their greatness. Nonetheless, you wouldn’t bet on the Cubs to win the Rugby World Cup. After all, the Cubs weren’t built to play rugby. Yet, many companies try to do the equivalent every day. They come to market with the wrong supply chain. How do smart managers get stuck in such a predicament? Two explanations persist.

Wrong focus. Great ideas spawn companies. But, source, make and deliver decisions are often an afterthought, following marketing, engineering or finance. No one asks whether, or how, SCM can confer a competitive edge. Market mediocrity is the result.

Poor scanning. Even cutting-edge supply chains can fall behind the obsolescence curve. You’ve read, for instance, about the woes of some high-profile brick-and-mortar retailers. As the Internet changed the rules of retail, they didn’t adapt. Now, they are dying. The readiness assessment is a key weapon in Theo Epstein’s arsenal. By conducting a two-step readiness assessment – the second R – you can avoid these losing outcomes.

Step 1 is an honest self-appraisal of the team’s current competencies. Simply put, ask: “Do we have the skills we need to play, and win, our industry’s competitive game?” If not, ask two questions:

1. Which skills are you missing?

2. What do the gaps look like?

By making capability gaps visible, you can prioritize your skill-acquisition efforts.

Step 2 is to assess potential partner competencies. Your job, like Epstein’s, is to close the gaps by building or buying the right capabilities.

Now, let’s take a peek into how Epstein leveraged the second R to turn the Cubs into champions.

The key to winning a baseball game is to score more runs than the other team. The emphasis on runs scored has always placed a premium on two player-evaluation metrics: Batting average and RBIs (runs batted in).

Sabermetrics argues you should set these metrics aside in favor of on-base percentage. After all, you can’t score unless you get on base, and it doesn’t matter whether you get on base via a hit or a walk. The logic of sabermetrics is simple: By using more-valid-but-less-used metrics, you can acquire the right skills at a lower price.

Of course, winning attracts benchmarking, and rivals quickly copied Epstein’s approach. Epstein’s response: Keep refining the readiness-assessment process.

Neuroscouting. Neuroscouting uses a computer simulation to make the connection between a player’s cognitive function (recognizing a pitch) and motor skills (swinging a bat). A player who picks up a pitch five feet out of the pitcher’s hand will get on base more frequently than a player who doesn’t read the pitch until 20 feet or 30 feet out. Neuroscouting helped Epstein identify Mookie Betts as a top prospect in the 2011 draft. Betts is now a rising star.

Wins above replacement (WAR). Epstein has grown fond of WAR, a metric that estimates how many wins a player contributes to above a replacement player at the same position. Going into the 2016 season, WAR indicated that the Cubs excelled in starting pitching, first base, and third base. But, right field was identified as a liability. To fill the gap, Epstein acquired Jason Heyward in free agency.

Predictive analytics. Epstein is now experimenting with simulations to predict how a given team composition will fare in each game throughout the season. Inputs can be quite detailed and include things like ballpark where the game is played, time of day and pitcher-versus-batter matchups.

Beyond closing capability gaps, readiness assessment serves another purpose. In 2011, as Epstein’s tenure with the team began, Cubs owner Tom Ricketts asked when the Cubs would be ready to compete for a championship.

Epstein’s response: The Cubs would get worse before things could get better. Building a strong farm system and young talent meant that the Cub faithful would need to be patient. Epstein’s plan, however, leveraged the “rules” of the collective bargaining agreement, one that allocated larger draft budgets to losing teams. Losing early to win later enabled the Cubs to acquire players like Kris Bryant and Kyle Schwarber, who were key contributors to the 2016 championship run.

The readiness assessment is a pivotal part of Zara’s story. Zara, like Amazon, is a rule breaker; its fast-fashion business model is truly game-changing. So too are the supply chain capabilities needed to make fast-fashion work. Compare the Zara way to Gap’s approach (see Table 1).

Table 1
Zara Has Built Unique Capabilities to Change the Rules

The backstory: Amancio Ortega, Zara’s founder, got his start in the apparel industry as a 14-year old errand boy. A decade later, Ortega began developing his own designs, reproducing popular styles, but with his own twists. He soon realized that if he could bring trendy designs to market quickly and inexpensively he could wow consumers. Ortega simply needed to convert the concept into capabilities. Readiness assessment provided Ortega the insight needed to build the capabilities that would fuel Zara’s fast-fashion strategy. Let’s highlight two points here.

Infrastructure. Capabilities derive from infrastructure. For instance, Zara brings its 30,000 distinct designs from concept to rack in only 14-24 days (a 10X advantage over rivals). To reliably hit this target, Zara sources over 50% of all items from local subcontractors in Spain (over 75% in Europe) and preps all product to be rack ready in its 400,000 square meter DC called the Cube. Zara’s infrastructure links supply to demand.

Decision processes. At Zara, decision makers evaluate every investment based on how it will enhance Zara’s capabilities. For instance, Xan Salgado Badas, Zara’s head of IT, stuck with an outdated, DOS-based point of sales system (POS) for years because newer systems didn’t offer any strategic capability upgrade. Yet, when Zara figured out how to use RFID to gain insight into fashion trends and hasten replenishment, it rolled out the technology at a scale and speed that startled rivals (in 2016, Zara bought 500 million RFID chips, 16% of that year’s total RFID sales).

Being fast and driving trends pays serious dividends. Customers visit Zara stores 17 times a year, compared to three times to five times for rivals. That’s because they know if a trendy new outfit sells out, it may not be back. In effect, Zara has turned customers into treasure hunters, transforming stockouts into a sales pitch.

Along the way, Zara became the world’s largest fashion retailer and Amancio Ortega the world’s second richest person. But, Zara’s team also knows that readiness assessment and capability development must be a lifestyle, not an event. If Zara isn’t always getting better, a rival like BooHoo or ASOS might make Zara’s version of fast-fashion obsolete. Just like the Cubs and Zara, you are only as good as you are ready.

Assemble the Right Players; Build or Buy Needed Competencies

Redefining rules and assessing readiness are tough tasks. But, the outputs – a capability-development matrix and a talent-acquisition map – are critical to devising a winning game plan.

Bringing all of the right pieces together and molding them into a champion is equally daunting. Emotional fortitude is needed. Executives like Theo Epstein, however, embrace the team-building challenge. Team ego results when you holistically progress through the remaining 3Rs – right players, right roles and right relationships. Let’s explore how Epstein brings these Rs together.

Through experience or intuition, Epstein knows the best players aren’t always the right players. Many so-called super teams never hoist the Commissioner’s Trophy at season’s end. So, what type of player does Epstein look for?

Talent is critical, but even more so, Epstein seeks a mix of athleticism and positional skill backed up by EQ and a team-first mindset. After all, when a crisis arises – and it will during the course of a 162-game regular season – team ego decides whether the team steps up or collapses.

The better question is, perhaps, how does Epstein put the right mix of skills on the field? Like you, Epstein has two options. He can build competencies or he can buy them. To field a consistent contender, he must do both exceptionally well. Figure 2 depicts Epstein’s method.

Figure 2
Assembling the Right Players

Phase 1: Long game. The core of an Epstein team emerges from the draft. Young talent like Javier Baez (2011) and Kris Bryant (2013) is identified and developed. The process takes time, but it provides a big bang for the buck. Baez and Bryant both made pivotal contributions to the Cubs’ World Series run. Of note, when Epstein arrived in 2011, he began to trade valuable players that didn’t fit his vision and culture, giving the Cubs more draft picks.

Phase 2: Close key gaps. Epstein opportunistically closes key skill gaps by acquiring proven talent via free agency or a well-timed trade. Consider Jake Arrieta, a starting pitcher acquired from the Baltimore Orioles just before the 2013 trading deadline. Arrieta won the 2015 NL Cy Young Award and was the ace of the Cubs’ 2016 pitching staff.

Phase 3: Win now. By July 25, 2016, the Cubs had the best record in MLB. But, by Epstein’s estimation, the Cubs still lacked a critical piece: a hard-throwing lefty closer. To bring Aroldis Chapman, the hardest thrower in baseball (105-MPH fastball), to Chicago, Epstein traded four up-and-coming prospects – a steep price Epstein was willing to pay to win it all in 2016.

One more point: Epstein knows that the concept of right “players” extends beyond the playing field. To help make things click, Epstein brought on Joe Maddon, former manager of the Tampa Bay Rays. Maddon’s keen sense of strategy and a sabermetrics-driven willingness to tweak the batting order and defensive alignment helped position the Cubs to win a league-leading 103 games.

Simply summarized, getting ready to compete means bringing the right players on board, whether drafting undervalued prospects, signing free agents, making pivotal trades or signing a manager whose true talents are being underutilized.

Apple has shown an uncanny ability to bring the right players together to develop and deliver hit products and services. Figure 3 shows how Apple uses Epstein’s playbook.

Figure3
Apple’s Path to Developing the HomePod

Phase 1 – Long Game: At the turn of the millennium, Apple began to invest in what has become the source of its success – software. The iTunes Music Store, paired with iOS, set in place the foundation for Apple’s ecosystem, which consists of over one billion active devices worldwide and includes services such as App Store, Apple Pay, Apple Music and iCloud. Apple touches its owners’ lives every day – and in an increasing variety of ways.

Phase 2 – Close key gaps: By buying Siri in 2010, Apple forged into both the search and mobile “assistant” markets. More recently, in 2014, Apple acquired Beats Electronics, quickly integrating Beats Music into its own streaming service, Apple Music. Pundits, nevertheless, questioned Beat’s $3 billion price tag. But, Apple appeared to have a compelling goal: To close gaps that powered Google Android’s foray into Apple’s turf.

Phase 3 – Win now: In August 2016, Apple quietly acquired Turi, an artificial intelligence startup, for $200 million. Less than a year later, on June 5, 2017, Apple introduced HomePod, a device designed to “reinvent music in our homes.” The Beats acquisition now made sense. But, that’s not all. HomePod is a home assistant – Apple’s answer to Amazon’s Echo and Google Home. Turi’s machine learning makes Siri smarter, giving Apple the win-now capability needed for HomePod to become the central nervous system for the IoT-enabled home, a nascent market with fantastic growth potential.

Apple is seldom first to market, but the design, user-friendly interface and massive ecosystem that support Apple products and services make it a game changer. The result: Apple’s market capitalization hit $800 billion in 2017 – 2X Amazon’s. Consider two facts: Despite owning only 30% of the mobile operating system market, Apple earned 90% of the industry’s 2015 profits. And Apple earns developer loyalty by delivering 75% more revenue vis-à-vis Google Play, making App Store the go-to place for the latest and greatest apps. Bringing the right players to the game has made Apple a perennial industry champion.

Put Players in the Right Roles; Shift As Needed

Getting the right players is just one step in the team-building process. Jim Collins described what comes next: “Get the right people on the bus, the wrong people off the bus, and the right people in the right seats.” Matching players to roles is critical. Yet, the way most companies do this won’t deliver a true – i.e., inimitable – competitive edge.

To be a supply chain champion, you have to think differently about how to mix and match key capabilities. With Epstein at the helm, the Cubs tinker incessantly with player roles. That’s one reason Epstein hired Maddon: His teams led the league in distinct batting lineups and in-game positional shifts every year from 2006 to 2014.

The goal: Tweak the lineup to improve the Cubs’ chance to win any given game. Imagine sending your catcher out to pitch. Maddon did just that, inserting David Ross to pitch against the Milwaukee Brewers. Ross had never pitched in the MLB, but he recorded a perfect inning. Maddon’s penchant for moving players around led the Cubs to acquire Ben Zobrist. Maddon called Zobrist a “super-U,” someone who can play multiple positions.

In fact, during his career, Zobrist has played every position except pitcher and catcher. Proactive role shifting made the Cubs improbable season possible.

Best Buy

In 2015, many pundits had already written Best Buy’s obituary, claiming the electronics retailer couldn’t survive Amazon’s assault and consumers’ affinity for “showrooming.”

Yet, Best Buy did survive, showing how role shifting can create a competitive edge even against Amazon.

How did Best Buy do it? Consider three pivot points that enabled Best Buy to become an experienced retailer.

Reduced costs. To contest showrooming, Best Buy began matching prices. To reduce costs and make price matching economically viable, Best Buy deepened collaborative relationships with suppliers, especially in the areas of merchandising, forecasting and replenishment.

Repurposed bricks. For brick-and-mortar retailers, Amazon’s onslaught turned what once was an asset into a liability. Yet by shipping online orders direct from local stores and encouraging in-store pickup of online orders, Best Buy can deliver with Amazon-like speed, turning its 1,600 physical stores back into an asset.

Reimagined roles. Clicks and mortar wasn’t Best Buy’s only proactive role shift. Best Buy invited top suppliers like Samsung, Apple, LG, Microsoft, Sony and Google to set up shops within its cavernous stores. Best Buy charges rent and benefits from high-margin sales of high-end appliances and electronics.

What’s in it for suppliers? The opportunity to create immersive customer experiences without the cost of owning stores. Google Guides, full-time Google staff, offer tutorials and tech classes, helping customers discover, play and have fun. Samsung Experience shops are located in every Best Buy store.

The result of role shifting: In 2017, Best Buy shares surged to an all-time high. However, as the Cubs know from first-hand experience, some role shifts backfire. Boeing discovered this the hard way with the launch of its vaunted 787 Dreamliner. Poorly conceived and managed shifts cost Boeing five years in first-mover advantage and, by some estimates, $20 billion in design, production and launch costs.

To avoid such misfires, you really do need to do the work entailed by all five Rs. Despite the risks, as Table 2 highlights, game changers from rivals’ strategic moves to disruptive technologies dictate that you begin to experiment with proactive role shifting.

Table 2
Forces Driving Role Shifting

The Future of the Supply Chain Workforce Will Be Determined By Technology Talent

Cultivate the Right Relationships; Build Identity and Trust

Having the right players in the right roles does guarantee that your team looks good on paper. Sadly, looking good on paper is no guarantee your team will win once the game begins. What separates paper tigers from competitive champions, both on the sporting field and in the boardroom? Champions possess chemistry; that is, a common vision backed by a willingness to work together to achieve strategic goals – even if someone has to play a less visible role.

Critically, chemistry derives from trust. To fully sense the value of trust, consider this key fact from the auto industry: The most trusted automakers are also the most profitable. Your takeaway: Ultimate success requires that you invest in a culture of trust.

Theo Epstein is a culture guy. Organizational culture, after all, endures beyond the departure of talent. So, what are the core tenets of an Epstein-inspired culture? For starters, Epstein believes people perform best, especially under pressure, when they are part of something bigger than themselves. He also believes that environment matters. That’s why the Cubs’ new $300 million stadium renovation included a round clubhouse – 60 feet, 6 inches in diameter (the exact distance from the pitcher’s mound to home plate). Epstein wanted to promote collaboration by putting everyone within eyesight of each other and encouraging serendipitous conversations. The space eliminated hierarchy, engendering camaraderie and team identity. David Ross, the Cubs catcher, described the design as, “a subliminal message they’re sending.”

Beyond facilities, Epstein cultivates “lever points”other people who help drive the culture. Epstein then steps back and lets them do some heavy lifting. Joe Maddon, the Cubs manager, is an ideal lever for an Epstein-built team. “Try not to suck,” a key Maddonism, communicates big-time expectations without big-time pressure. Madden helped nurture the Cubs culture: Trust each other; do the right things consistently, including stretching for better results; have fun, but hold each other accountable; expect greatness. Epstein and Maddon know that if you build the right culture, that comes crunch time, someone will step up.

And that’s exactly what happened in game seven of the World Series. After digging out of a 1-3 deficit and building a commanding three-run lead going into the bottom of the 8th inning, the Cubs did the unimaginable – they gave up the lead and gave away the momentum. The 103 wins didn’t matter anymore; the dream was slipping away. Then, it began to rain – and culture took over. As the grounds crew came on the field, the Cubs exited toward the locker room.

Jason Heyward impulsively called his teammates into a weight room for a player’s only meeting. Never the outspoken leader, and struggling at the plate throughout the playoffs, Heyward reminded his teammates just who the Cubs were. David Ross recounted Heyward’s message: “He just said: ‘We’re the best team in baseball for a reason. Continue to play our game, support one another. These are your brothers here, fight for your brothers, lift them up, continue to stay positive. We’ve been doing this all year so continue to be us.’”

What would’ve happened if Heyward hadn’t spoken up? The Cubs may still have won. But, Epstein knows that you leave less to chance when you invest in the right culture.

Honda

Honda is a Cubs type of culture warrior.

More reliant on suppliers than rival carmakers, Honda’s buyer-supplier culture is truly unique, even a little quirky. Honda treats strategic suppliers as an extension of Honda itself.

Simply put, Honda invests in supply partners as if it is buying their capacity and capabilities, not just their parts. By the way, 90% of Honda’s spend is with strategic partners.

To help these partners succeed, Honda sends engineering teams to work on-site at suppliers for three months – and as long as 24 months – at no cost to the supplier.

The goal: Help suppliers optimize manufacturing and business processes. A typical best practices (BP) improvement initiative improves quality by 30% and labor productivity by 50%. More importantly, under Honda’s coaching, suppliers develop critical skills. Honda, in turn, gains stronger supply partners. Cost savings are shared 50/50 with the supplier.

Honda’s investments aren’t limited to BP projects. Honda expects supply partners to participate in corporate training, senior-leader business reviews and new product and target costing programs.

You may be wondering why Honda invests so much in its suppliers instead of switching to more capable suppliers. Honda’s response: Other suppliers would have similar problems. The nuanced answer, however, runs deeper.

Like Epstein, Honda is playing the long game, building a trusted team that can compete the “Honda Way.” Identity is critical.

One result: Honda is the most trusted carmaker among suppliers. Almost 40 years after launching U.S. operations, nearly all of Honda’s original supply team remains intact. The trust also shows up in Honda’s profitability.

Despite Toyota’s superior scale – producing twice as many cars per year – Honda has consistently delivered higher profit margins.

General Motors

Now, let’s go back to the early 1990s. J. Ignacio Lopez, General Motor’s purchasing czar, tore up supplier contracts, putting everything out to bid.

By saving $4 billion dollars, Lopez saved GM from bankruptcy. But, Lopez alienated suppliers, solidifying a culture of mistrust.

Over a decade later, supplier resentment still ran hot. Suppliers scored GM a 114 on the 2005 Supplier Working Relations Index(the lowest score ever – 300 points behind Toyota’s 415).

The real cost: Suppliers were holding back on GM, dedicating their best engineers and sharing their latest technology with more trusted partners like Honda and Toyota.

The rise of autonomous vehicles, however, forced GM in 2015 to acknowledge an existential threat, that its future depended on supplier innovation.

Compelled to change, GM began offering longer-term contracts to urge suppliers to more openly share their best ideas. Two years later, GM’s 2017 WRI score reached its all-time high of 290, lagging behind only Toyota and Honda.

The Journey Continues

The Cubs faithful view Epstein as a miracle worker. In truth, Epstein simply embraced core tenets supply chain champions put to work every day as they design and manage world-class value-creation teams. What then is your key takeaway?

Epstein succeeded by executing each R as part of an integrated 5Rs strategy.

In Epstein’s words:

“Acquiring the talent is only half the battle. The other half of the Cubs’ rebuilding required the organization to establish a winning culture. This meant devising a ‘Cubs Way.’”

In our experience, putting all five pieces of a 5Rs strategy together is quite a feat. Even supply chain champions struggle to implement all five Rs.

But, Maddon offers a word of advice: “The process is fearless.”

If you continue to work the process, the 5Rs will help you break whatever supply chain curse you’re facing.

About the Authors
Stanley E. Fawcett, Ph.D., is the Goddard Professor of global supply chain management at the Goddard School of Business at Weber State University. He can be reached at stan.e.fawcett@gmail.com.

A. Michael Knemeyer, Ph.D., is a professor of logistics at Fisher College of Business at The Ohio State University. He can be reached at knemeyer.4@osu.edu.

Amydee M. Fawcett, Ph.D., is an assistant professor of supply chain management at the Goddard School of Business and Weber State University. She can be reached at amydeefawcett@weber.edu.

Sebastian Brockhaus, Ph.D., is an assistant professor of supply chain management at the Boler School of Business at John Carroll University. He can be reached at sbrockhaus@jcu.edu.

Image Credit: Dan Vasconcellos

Related: How The Chicago Cubs Baseball Team Brought Data-Driven Decision Making to Wrigley Field

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Today’s Millennial Supply Chain Professionals

APICS, the professional association for supply chain management, has published the results of its Millennials in Supply Chain research report, conducted by Peerless Research Group in conjunction with Supply Chain Management Review(SCMR) and the American Productivity & Quality Center (APQC).

A survey carried out in April 2017 was designed to gain insight into millennials as a critical segment of the supply chain workforce.

The report finds that millennials are focused, engaged, enthused and committed to working in supply chain management, and reveals that supply chain represents a sought-after, dynamic and rewarding long-term career choice for professionals in their 20s and 30s.

“The results of the report are eye-opening, especially when compared to the more senior supply chain professionals in leadership positions, who were part of a previous study from APICS and SCMR in 2016,” said APICS CEO, Abe Eshkenazi, CSCP, CAE, CPA.

“We see that more millennials started their career in supply chain, are moving around less, are highly satisfied with their jobs and see more opportunities for advancement in the field.”

APICS CEO Abe Eshkenazi

“Despite some noted frustrations, millennials are continuous learners and fast movers who are eager to advance”APICS CEO Abe Eshkenazi

The report shows millennials have a diverse interest in activities that span the end-to-end supply chain. Notably, the area that holds most appeal, supply chain design, and planning, is a role that touches all areas of supply chain.

The millennials surveyed also said they find their careers personally rewarding. Eighty-one percent feel they can make a difference in the supply chain field, 87 percent believe working in the field will help with their personal growth and development, and 88 percent agree that there are opportunities for advancement within the field.

Diversity topped the list of what millennials consider most important about the field and the companies for which they work. Eighty-five percent noted that supply chain involves a diverse workforce and encompasses people of all types, which additional findings that more women are now entering the field also reflect.

Respondents were roughly two-thirds male (61 percent) and one-third female (39 percent), compared to the 2016 survey of senior supply chain leaders, in which 76 percent of respondents were men while only 24 percent were women.

However, just as earlier research of senior managers in 2016 showed a pay gap between males and females, there is a gender wage gap among millennials. Men and women start at roughly the same salary, but the disparity grows larger as they move up the career ladder.

This disparity is chief among complaints from millennials surveyed, along with frustration around the attitude towards millennials by older generations in their organizations and a disconnected feeling from the big picture or a lack of purpose in the workplace.

“Despite some noted frustrations, millennials are continuous learners and fast movers who are eager to advance,” Eshkenazi concluded.

“To address the ongoing skills gap, industry expectations, priorities and communication styles must adapt to and embrace the different needs of this younger generation. Millennials are growing and learning on the job in an era of lean, optimized, end-to-end supply chains and are critical to the ongoing transformation of the industry.”

SC24/7 Search Term: Millennials

Millennials Don’t Just “Fall Into” Supply Chain

This generation comes to the field with early and prolonged commitment

A generation ago – or even a decade or two ago – if you asked a group of students about their career goals, the field of supply chain management probably wouldn’t rank highly, if at all, among their responses. Most Gen X and baby boomer supply chain professionals didn’t plan for, prepare for, and intend to work in supply chain. It was a field they found themselves in, having landed there as they evolved from previous roles in engineering, finance, planning or management.

Millennials in Supply Chain research report

Download the Research Report: Millennials in Supply Chain

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L’Oreal S.A. Creates Award Winning Transportation Solution with LTL Partners

October 10, 2017

As any fashion model will tell you, it isn’t easy to look perfect. It takes plenty of planning, preparation, and assistance.

It’s the same with freight transportation.

If you want “white glove service” you have to devise a great strategy and then team up with best-in-class carriers to execute that plan on a daily basis.

SalonCentric recently did just that through a unique partnership with two of its key less-than-truckload (LTL) partners, Pitt Ohio Express and Averitt Express.

A unit of Clichy, France-based L’Oreal S.A., SalonCentric is a leading distributor of professional salon products in the U.S.

It operates in 48 states, serving more than 565 stores, and distributes many brands including L’Oreal Professional, Redken and Matrix.

But delivering to all those stores was challenging due to its wide geographic area and the fact that none of their store locations have loading docks or delivery areas.

SalonCentric also knew that it needed to increase their customer order windows, decrease its carbon footprint and develop a return solution that was both economically and ecologically sound.

Let’s take a deeper look into how this beauty salon supplier worked to develop this award-winning transportation solution through improved collaboration with two of its most important logistics partners.

SalonCentric’s Three distinct challenges

About four years ago, SalonCentric realized that is had two distinct distribution challenges. First, its McCalla, Ala., distribution center that services 110 wholesale stores in the Southeastern U.S. needed better service to its network of stores. These stores receive weekly shipments averaging two pallets with 79 pieces weighing about 375 lbs.—and half of those shipments were made in reusable plastic totes.

Editor’s Note: The successful partnership forged by SalonCentric, Pitt Ohio Express and Averitt Express was awarded a 2017 Alliance Award. The Alliance Awards, sponsored by Logistics Management and SMC³, recognize how shippers and their service providers work together to overcome challenges to critical components of their
unique supply chains. Winners are singled out for their ability to effectively solve challenges through innovative, measurable means. Entries for the 2018 alliance Awards will soon be accepted here.

Because SalonCentric stores don’t have receiving docks, these deliveries required breakdown and inside delivery into a back room or classroom area. Empty totes from the previous week’s delivery had to be removed at time of delivery as well.

The final challenge was to speed up delivery times. Because its stores comprise a large geographic footprint, orders had to be placed well in advance. The challenge was to be able to extend those order times to get more timely shipments of exactly the products each store needed.

Time for collaboration

To address these challenges, Eric Reddish, SalonCentric’s director of operations, says that he knew he needed his carriers to step up and become an integral part of his logistics operation. What resulted was a solution that delivered cost and time savings and lessened the impact on the environment through the implantation of an innovative tote consolidation program—goals that would have never been meet without the collaboration of trusted partners.

Eric Reddish:

“A lot of times transportation is viewed as a commodity—you need a shipment, call a carrier, they pick it up and hopefully deliver it. That is especially true in the LTL world.”

But because SalonCentric delivers to its own stores, it needed a distinctly different, non-commodity-type service. “We want our carriers to be an arm of our greater logistics network,” says Reddish. “We need carriers delivering to our stores and to be partners in the process.”

The plan, conceived four years ago, involved about 200 of SalonCentric’s stores.It came after thorough examination of its shipping patterns, distribution center schedules and capacity along with analysis by Averitt and Pitt Ohio transportation experts on what the most efficient system would look like.

In Alabama, Averitt began to pull multiple trailer loads of freight nightly from the McCalla location in accordance with the store shipping schedules to address the first challenge. Furthest locations were dispatched first with those closest picked up later. This partnership with the Averitt team allowed the maximum processing time in the DC while still meeting sort times at the local hub.

Eric Reddish, Director of Operations, SalonCentric

“We need carriers delivering to our stores and to be partners in the process.”Eric Reddish, Director of Operations, SalonCentric

Automated PRO numbers further allowed the DC to manifest shipments accurately and with confidence that they will flow smoothly through the Averitt system. Once en route, the store shipments were now managed through the network via tracking until final delivery. After successful removal of empty totes, Averitt sends an EDI 214 notifying SalonCentric that the delivery is complete.

Regarding the second challenge, typically its UPS line hauls only utilize 50% to 65% of the truck. In the McCalla example, Averitt was line hauling to Jacksonville, Fla. In cooperation with Averitt to better utilize the line haul, the decision was made to round out the truck with SalonCentric stores going into south Florida.

Averitt then makes two stops with the line at both UPS and its hub in Jacksonville. After making the final store deliveries in south Florida, Averitt then consolidates the empty totes from those stores back in Jacksonville, returning them to McCalla, twice a week.

From its East Manchester, Pa., DC, deliveries are made to both a UPS hub and Averitt service center in Richmond, Va. Averitt then does final delivery to SalonCentric stores in Va., N.C. and W. Va. A tote consolidation program was again established by Averitt to consolidate and return to East Manchester. In those instances when there’s insufficient room on the line haul trailer, store deliveries into Va., N.C. and W. Va. are given to Pitt Ohio at origin. Pitt Ohio then hands off to Averitt for final delivery.

By zone skipping via line haul more than 5,000 small parcels a week to four or five stores a day, SalonCentric reduced by an average of one to two zones, thus lowering overall fees. Reddish and his team were also able to extend the daily order cut-off and reduced damages.

However, the appearance and professionalism of both the Averitt and Pitt Ohio drivers was “probably the single most important factor” in making the partnership work, says Reddish. “We look at these guys as part of our team. We ask carriers if they can provide the same driver so that relationships build between store manager and driver—and often our customers.”

Because SalonCentric stores are open when deliveries are made, Averitt and Pitt Ohio drivers must occasionally mingle with clients receiving $200 perms and color tints. Those drivers are in uniforms with shirts that read “SalonCentric Logistics,” adding to the professionalism of the driver.

The third solution addressed the environmental need. After Loreal created SalonCentric following a series of small beauty supply company purchases in 2013, an emphasis on growing “green” began. As a result, the shipper converted from cardboard boxes to use of reusable plastic totes, a move that saves money and reduces its carbon footprint.

The $10 totes can be reused for up to 20 to 30 deliveries over several years for annual savings of around $40,000

“Our waste is tracked to the minute detail, and we’re measured by it. Using plastic keeps up from using corrugate cardboard, and it has also saved on damages, which is a big win for us.”

How the carriers did it

Collaboration in logistics is often easier said than done, but Pitt Ohio and Averitt executives say that their partnership with SalonCentric is an alliance that will do nothing but grow into the future as all sides are realizing benefits every day.

“True collaboration was the key, and this is the wave of the future,” says Tim Duven, enterprise solutions executive for Pitt Ohio Express.

“It used to be taboo to interline because you would lose visibility and the ability to track and trace freight. But now we can track and trace on each other’s Websites and create a true partnership—and it saves the carrier from using brick and mortar to build new terminals. Now you just find a partner who goes into that territory.”

As usual, truck drivers were on the front line of making this work. Because they were operating during business hours, Duven says that his drivers had to act like they “were not even there” and just do their jobs quietly and efficiently.

Tim Duven:

“Drivers have to be an extension of the people managing that store. The stores buy for what they need, so we need to be on time, get in the store and be almost invisible. That’s hard to do when you’re carrying bins and boxes, and we have to do it in a very professional manner.”

Brandon Mazur, director of corporate business development for Averitt Express, agreed that partnership collaboration among all the players was simply the key to the success of this endeavor. “But in the end, appearances really do matter at this level of partnership,” he adds.

Results and the future

SalonCentric’s unique partnership with Averitt and Pitt Ohio has resulted in tangible transportation savings, pickup and delivery efficiencies, as well as supplemental environmental benefits.

Some of the highlights include:

  • lessened impact on the environment via the plastic tote return solution;
  • cost savings in not using corrugated materials;
  • elimination of line haul charges;
  • and increase in SalonCentric customers order times.

On the environmental front, Averitt and Pitt Ohio say that utilizing the plastic hinged totes instead of corrugated boxes saves SalonCentric money and reduces its carbon footprint. The $10 totes can be reused for up to 20 to 30 deliveries over several years.

Averitt picks up the totes while making deliveries and returns them to consolidation points in Jacksonville and Richmond. Average savings with this program net any transportation fees is $40,000 annually.

Proving pool distribution points and zone skip services gave SalonCentric’s customers additional order time each day. The parties developed several pool points for SalonCentric and provided zone skip services in many areas, including Birmingham, Ala., to Jacksonville and Richmond and East Manchester.

This resulted in an additional 4 hours to 5 hours per day for SalonCentric’s customers to place orders and still receive the same delivery service. These tweaks, net of line-haul charges, has saved SalonCentric in excess of $50,000 annually.

Averitt and Pitt Ohio have pledged to continue to develop ways to save SalonCentric money and improve service to customers. In fact, Averitt and the shipper are currently developing a pool distribution solution from Omaha to Oklahoma to service stores in Oklahoma and Texas.

According to Pitt Ohio’s Duven, this type of business model continues to grow. “SalonCentric recognizes the value, and if you perform, you will be rewarded with other markets like Michigan and Nebraska,” he says. “But you have to perform, because at the end of day, we’ve earned that business together.”

Averitt’s Mazur adds that the relationship is in “a constant state of flux” because Averitt uses a blended mode approach—LTL, TL and logistics. “We can go outside our verticals and craft a solution for Eric and SalonCentric at any time,” he says.

“We can offer many options for him to choose. But at the end of the day, it’s amazingly gratifying to work with this partner. It’s one of the highlights of my career.”

And most importantly for the two carrier partners, the shipper feels the same way. “We’re just extremely pleased,” adds Reddish.

“Our barometer is the feedback we get from the stores. We very rarely hear any issues; and if we do the response time is phenomenal. It’s really been just quiet—which in my world is a good thing.”

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About the author
John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. John is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis.

 

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Utilizing Logistics Technology to Manage & Exceed Customer Expectations

We started our seven blog series on Logistics, Tech in Logistics, beginning with a blog on Managing the Dynamic Environment.

This blog is the second in the series (see below) and covers another important aspect in the logistics space.

With most logistic influencers clamoring for attention – from globalization to competitive markets – one unlikely contender suddenly rose to prominence as being one of the most significant performance indicators and a key differentiator of every logistics provider.

This interesting influencer is the customer!

The position of end customer and customer-centric organizations has been steadily rising in the list of top 10 priorities for every logistics provider.

Managing customer expectations and nurturing lasting relationships with their customer base is fast becoming a core focus of this landscape ensuring a distinct competitive advantage.

Interestingly, with the customer rising in prominence, the complexities of the relationship are also becoming exceedingly complex and demanding.

Customers have smartly realized their power, as is evident from their ever-increasing expectations and demands from the logistics ecosystem. What are these demands?

Let’s take a look.

The Ever-Growing List of Customer Expectations

Transparency and visibility across the ecosystem: The ability to track consignments from the placement of the order right up to delivery in real time is a common request. Track-and-trace involves having real-time information at your fingertips of the current status of consignments to the immediate intimation of unanticipated delays.

Time is money: This phrase has incredible relevance in the logistics ecosystem, with timeliness becoming a primary indicator of Perfect Order and a strong logistic differentiator. Logistics service providers are hence looking for solutions that will help them work in a time-bound manner.

Seamless, end-to-end process: The expectation of a smooth process from order to delivery and invoicing has become the norm. Customers comprehend the complexities of the landscape, yet expect the provider to manage these intricacies in the background. The emphasis on seamless logistics is hence challenging the entire network.

Managing disruptions in real time: Customers expect a foolproof plan with zero deviation in implementation, but in reality, logistics providers have to constantly battle to stay on plan. The possibility of things going wrong is quite high – from poor weather and vehicle breakdown to poor road conditions and change in route plan. Handling such sudden disruptions is one of the toughest challenges of the landscape.

On-the-go: Mobility-first approaches across verticals have placed a lot of importance on anytime anywhere access. From access to information to carrying out simple to complex tasks seamlessly across multiple channels – from mobiles to desktops – has highlighted hurdles in terms of efficient integration, version control, and other challenges.

Logistics companies are hence forced to look at options that will help them deliver a top-notch performance and unmatched customer experience, without compromising on cost.

 

The Magic of Technology

Yes, the customer wish list is long, but with the magic lamp of technology at their service, logistics providers are effectively meeting most the customer expectations.

Let’s look at a few examples.

Mobile-first access to the logistics network: Comprehensive mobile strategies go a long way in enabling a transparent logistics network and providing simple app-based interfaces to interact easily with the system for any type of information anytime from anywhere. This advantage certainly makes a huge difference in a world where ease of multi channel access and security are critical in ensuring customer satisfaction. The advent of Bots in Logistics Industry has raised the bar even higher.

Visibility and real-time track-and-trace: Knowing the exact status of their consignments in real time with minimal effort is crucial in building the customer’s confidence. If this feature includes the option to drill down extensively to dig out further information (such as projected time of arrival, consignment and transit information) through simple user interfaces, then it further cements a strong customer-provider relationship.

Robust systems to manage issues before or as they occur: An ideal system is so well oiled that there would never be any disruptions. But the reality is far from desirable. The entire route from point of origin to the very last mile has innumerable chances of unexpected delays and deviations. A technology-enabled, intuitive, and cognitive system can integrate embedded intelligence and data analytics to overcome this hurdle. This system automatically highlights possibilities of deviations and delivers data-based insights that will help the providers take well-informed decisions to overcome the disruption.

End-to-end platforms enabling a seamlessly integrated process: A smoothly flowing process that integrates not only multiple stages but also all stakeholders of the landscape is a key demand of customers. This demand can only be achieved by a process that delivers an easy process from request for quote to delivery. Such a well-orchestrated system closes all possible loopholes within the system and delivers accurate, consistent, and version-free information to every stakeholder – especially the customer.

Simplifying invoicing process: What scares most customers is not just the transit complications but also the painfully long order placement and billing process. Technology solutions such as sign-on-glass and combined invoices go a long way in generating POD with zero delays and immediately triggering the invoicing process.

Feeding the on-demand requests: It’s the fast food generation – where every aspect of living must be completed in a snap. This burden on the logistics world can be overcome by “Uberization” of the logistics landscape. Customized, on-demand sharing of transportation options are the most trending approaches logistics providers use to meet such sudden customer demands.

These indicators are a clear reflection of the power of the customer in today’s logistics landscape. The robust weapon of technology is the only solution for logistics providers to meet the ever-changing demand of the customers. But technology has a crucial buddy that simplifies all the complexities of the landscape – Data!

In our blog post “The Value of Real-Time Data Collection” we look at the importance of data – especially real-time data for the logistics network – and the options available to logistics providers to leverage data and solve the pain points of the system.

Tech in Logistics Blog Series

  1. Managing the Dynamic Environment
  2. Exceeding Customer Expectations
  3. The Value of Real-Time Data Collection
  4. Predictive Analytics for Decision Making in Logistics Management
  5. Importance of Data Enabled Visibility in Logistics
  6. Where’s Your Shipment Right Now?
  7. Automation in Logistics: Ideal or Attainable?

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Cloud Enterprise Resource Planning: 3 Reasons Why Cloud ERP is Misunderstood

Has your business yet to take advantage of Cloud ERP?

According to Aberdeen GroupTop Performers Know It’s Time to Migrate to Cloud ERP, the percentage of organizations considering a cloud solution has increased from 23% to 59% since 2016; finally surpassing on-premise solutions.

While some businesses see the benefits of a cloud-based ERP solution, others may have misinformation or doubt about making the transition to the cloud.

Is Cloud ERP misunderstood?

Here are 3 Cloud ERP theories’ that may be holding you back:

1. Cost Concerns. Many organizations would believe there are cost concerns when investigating Cloud ERP solutions, however, those that choose ERP in the cloud do so because of the cloud’s ability to provide a centralized platform for all data needed to run their organization.

Subscription payments make it much more practical to utilize an ERP solution without having a large, up-front cost, in addition to saving on any future upgrade to existing servers. This strategy fits with the needs of changing organizations that are now able to take advantage of the capabilities that are essential for success.

2. Termination of IT Jobs. An argument can be made that cloud computing automates tasks that are performed by employees, eventually eliminating the need for IT resources. However, many predict that cloud computing will increase the number of workers in the field.

With lower cost and greater ease of use, any loss of jobs caused by the move to cloud computing will be made up by the overall growth the cloud solution will enable resulting in job growth associated with cloud environments and applications. Job titles may be different, but employees needing to overlook cloud solution projects will be far from over.

3. Fear of Data Security. As more and more organizations are choosing to move their ERP systems to the cloud, data security concerns may weigh heavily on their minds. (It Tool Box) Organizations have continued to be cautious about giving up visibility and control, particularly over applications that are more business-critical.

According to Aberdeen Group, A New Approach for Enterprise Application Security, 66% of all enterprise applications are implemented using Cloud Solutions opposed to traditional server implementations. Unless your business has 24 hours, 365 days yearly protection on your infrastructure; Cloud ERP offers support, protection and a peace of mind for your business.

As Cloud computing becomes one of the most riveting technologies to hit the Enterprise industry, this will open the door for misconceptions about the Cloud platform.

Anything new to businesses is always a big unknown. As today’s organizations become more informed of Cloud ERP benefits, more and more will look for ways to take advantage of it across their organizations.

About the Author
Kevin Beasley
As Chief Information Officer, Kevin Beasley provides vision and leadership in technology planning for VAI. Beasley oversees both the corporation’s technology strategy in conjunction with product development and the internal information technology initiatives that support the goals of VAI. With an in-depth working knowledge of enterprise resource planning software development, Beasley is an integral part of VAI’s leadership team.

VAI S2K Enterprise

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Real-Time Supply Chain Visibility & Connectivity

Through the rich integration of experienced supply chain professionals, world class technology, and customer insights, C.H. Robinson is reinventing global supply chains by making them more prescriptive, automated and efficient.

Navisphere Vision continues to advance the powerful and proven capabilities of C.H. Robinson’s proprietary Navisphere technology platform.

Microsoft, an innovator in fulfillment and logistics capabilities and a customer of C.H. Robinson’s TMC division, has been using Navisphere Vision since its alpha release in 2016.

“Navisphere Vision helps us understand the things that we couldn’t before. It provides the visualization that connects data and the real-time events that are happening within our supply chain,” said Alaina Hawkins, senior manager of global logistics at Microsoft.

Alaina Hawkins, senior manager of global logistics at Microsoft

“Navisphere Vision provides the visualization that connects data and the real-time events that are happening within our supply chain”Alaina Hawkins,
senior manager of global logistics at Microsoft

“Navisphere Vision helps us make decisions on a more precise, real-time level so we can address any challenges that might occur, react in a less randomized fashion, create predictability throughout our supply chain, and increase collaboration so we can deliver our products to customers on time. It’s tremendously powerful.”

In addition to providing real-time visibility down to an SKU level, Navisphere Vision delivers insights and impacts of potential disruptions from weather, traffic or current events, as well as predictive analytics to help shippers make better, faster decisions.

This next generation of real-time supply chain visibilityenables shippers to improve customer service and cost controls through the management of inventory in motion, proactive status updates, limiting disruptions and risk mitigation.

Shippers can gain a single view of all global inventory to support working capital needs and cash to cash cycle management. Access to real-time global visibility, combined with new supply chain insights, empowers shippers with new agility, accuracy and real-time decision-making to stay a step ahead of the competition.

“The industry has seen supply chain visibility tools before, but Navisphere Vision represents the next generation,” said Jordan Kass, president of TMC.

“Not only is it global, but Navisphere Vision goes far beyond visibility and helps our customers predict supply chain disruptions before they even occur.”

“This solution provides unique benefits for our customers. Its ability to serve all global regions across any transportation mode, as well as layering in potential disruptions, provides our customers with powerful data, insights, and opportunities to make changes quickly,” said Chad Lindbloom, chief information officer at C.H. Robinson.

“Navisphere Vision utilizes API technology to aggregate all other supply chain and information sources into one single location, giving our customers the most streamlined, real-time solution available. And it brings a new level of machine-learning and data science the supply chain industry hasn’t seen to date.”

Related: C.H. Robinson Improves Contract Carriers’ Access to its Technology Platform via Mobile App

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C.H. Robinson Acquires Milgram & Company Ltd., Expands Global Forwarding Network

“Today, we are bringing one of Canada’s most respected forwarding companies into C.H. Robinson,” said John Wiehoff, Chairman and Chief Executive Officer of C.H. Robinson.

“This acquisition continues our global expansion and marks our third Global Forwarding acquisition in the past five years.”

“We are extremely proud of the progress we have made in bringing these companies into C.H. Robinson, and Milgram & Company Ltd. (“Milgram”) provides another unique opportunity to strengthen our global forwarding and customs brokerage offerings in Canada.”

“We look forward to working with Milgram’s customers to offer our full suite of logistics services to help improve their supply chains.”

John Wiehoff, Chairman and Chief Executive Officer of C.H. Robinson

“This acquisition continues our global expansion and marks our third Global Forwarding acquisition in the past five years”John Wiehoff, Chairman and CEO of C.H. Robinson

Milgram is a leading provider of customs brokerage and freight forwarding, in addition to providing surface transportation and warehousing services, to 3,500 active customers.

Headquartered in Montreal, Quebec, Milgram employs approximately 330 employees and has six offices in Canada and one office in the United States.

Milgram is a gold standard winner of Canada’s Best Managed Companies®. For the fiscal year ending May 31, 2017, Milgram had approximately $155.3 million CAD (approximately $124 million USD) in gross revenues.

C.H. Robinson purchased Milgram & Company Ltd. for approximately $62 million CAD (approximately $50 million USD) in cash. The acquisition is expected to be approximately neutral to earnings in 2017 and slightly accretive in 2018 and will be financed through cash and funds drawn from C.H. Robinson’s existing revolving credit facility.

“We are excited to build on our success providing supply chain expertise and execution, refining processes, and being an integral part of our customers’ businesses,” said Jay Goldman, President and Chief Executive Officer of Milgram & Company Ltd.

“We now look forward to collaborating with C.H. Robinson to grow our presence and provide our customers with the opportunity to leverage C.H. Robinson’s worldwide network and world-class service offerings.”

C.H. Robinson’s Global Forwarding business currently serves five continents and 31 countries, with over 4,000 employees and 125 offices worldwide, and is the #1 non-vessel operator (NVO) from China to the United States. Global Forwarding customers leverage C.H. Robinson’s considerable freight volumes to access available capacity at competitive rates.

“This acquisition strengthens our ability to continue to serve the world’s shippers and help them meet their global supply chain goals,” said Mike Short, President of C.H. Robinson’s Global Forwarding division.

“Milgram has built a successful business doing things the right way, serving customers, and exceeding their expectations. We look forward to bringing their talented team to C.H. Robinson.”

C.H. Robinson will integrate Milgram into its Global Forwarding division and single global technology platform, Navisphere®.

Related SC24/7 Article: Freight Forwarders Face ‘Significant Change from New E-Business Models’

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Kuebix Partners with SimpliShip to Expand Global Transportation Management Solution

Kuebix, creator of a transportation management system that delivers true shipping intelligence, and international freight marketplace SimpliShip have partnered to integrate the SimpliShip International Freight Rate API with Kuebix TMS.

In an interview with Logistics ManagementKuebix President Dan Clark says the relationship will help U.S. shippers penetrate the international marketplace with more ease.

“There’s been some anxiety about the risk involved in going global,” he says.

“But the cloud-based platform we provide should address those concerns.”

“Our partnership with SimpliShip is a great addition to the Kuebix ecosystem as we continue to expand our global network of providers to maximize visibility and efficiency for domestic and international shippers”

Dan Clark, President & Founder, Kuebix

“Our partnership with SimpliShip is a great addition to the Kuebix ecosystem as we continue to expand our global network of providers to maximize visibility and efficiency for domestic and international shippers”Dan Clark, President & Founder, Kuebix

With Kuebix TMS, logistics managers may be enabled to enhance rating, booking, and managing of their LTL, TL, parcel, rail, ocean and air freight.

For more complex supply chains, Kuebix can be configured with Premier Applications and Integrationsdesigned to meet the needs of a larger enterprise.

According to analysts at Gartner, Kuebix is among the industry’s fastest growing TMS players in today’s marketplace.

Bart de Munyck – a prominent analyst with the consultancy – recently wrote about the company in a TMS market study last spring.

“Kuebix is the industry’s fastest growing transportation management system that saves businesses of every size time and money by providing shipping intelligence across the supply chain.”

Clark told Logistics Management that the new partnership will help Kuebix in its “consultative” role in the future…especially with perishable commodities.

“High-value goods are growing in demand,” he says.

“And shippers need much more guidance and advice when ramping up their services.”

This partnership with SimpliShip will connect Kuebix users to a large network of freight forwarders and NVOCCs for instant and spot market air and ocean freight pricing.

SimpliShip Chief Executive Officer Cory Margand called the integration the “first step in unlocking the true potential for APIs in international logistics.”

“The days of having to access multiple platforms to manage domestic and international shipments are over.”

Related Article: Why is Big Data, and Managing it, Such a Big Deal?

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