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Category Archives: Delivery

Omni-Channel Solution Enables Industry Disruptor Canyon Bicycles to Pioneer US Ecommerce

April 25, 2019 · By 24/7 Staff · 

SEKO Logistics’ Omni-Channel Solution

Unlike competitors, Canyon Bicycles are exclusively sold online – cutting out the middleman and offering consumers a technologically-advanced performance bike for 20-30% less cost.

With Canyon’s computer-aided development, highly-qualified engineers, creative designers, top professional riders and passionate cyclists, the brand is sweeping the globe as a leading industry disruptor pioneering bicycle eCommerce in the 21st century.

Canyon’s entire global operation was originally built around their sophisticated design, sales, operations and engineering team in Koblenz, Germany, but their desire to expand and become a global company scaling rapidly in the US led them to partner with SEKO for an outsourced logistics solution they could trust to speed up their demand chain whilst maintaining their reputation for cost efficiency.

Recognising the highest growth opportunities on the West Coast, including California, as well as in New York and Miami, Canyon opted for SEKO’s proposal that their Chino, CA, operation acted as a single facility to meet orders from their large customer base on the West Coast and to provide the capability to ship bikes across North America.

In Chino, SEKO has accommodated all of Canyon’s requests by developing a truly customized solution – transforming their warehouse into a facility to support supply chain fulfillment, quality control, and team integration.

SEKO also integrated their SEKO 360 WMS (Warehouse Management System) platform with Canyon’s ERP and CRM systems to provide full stock and demand chain visibility and facilitate same-day order processing to increase shipment velocity.

SEKO also met and exceeded Canyon’s requirement for members of their award-winning, technology-driven design team to work at the Chino operation to maintain quality control of their patented technology, implementing a Canyon-leased portion of the facility that incorporates a Wi-Fi firewall, individual phone lines, customized inspection stations, break rooms and even a test track.

Brian Bourke, VP of Marketing of SEKO Logistics, said;

“Canyon Bicycles is a ground-breaking company and as they prepared for their US launch, they needed a partner with the capability to bring the same level of innovation, design, operations and technology solutions to their demand chain, which is why they came to SEKO Logistics. From day one, based on our service level agreement for all orders to be processed the same day, our focus has been to provide Canyon with increased efficiency, improved time in transit and, most importantly of all, which gets their outstanding bicycles into their customers’ hands as quickly as possible. Upon import, SEKO offloads the containers, tags them into inventory, puts them on Canyon’s customized shelving, and picks and packs daily as needed. This complete, end-to-end solution and our seamless partnership have helped Canyon surge into the US market and pave the way for future growth.”

Blair Clark, President of Canyon Bicycles USA, said: “SEKO has been a great partner for us as we launched in the United States. They focused on continually improving the logistics process as we were building and growing our volumes, which allowed us to focus on marketing and selling our innovative bikes and accessories to the USA market. From installing wider racking to speeding up order processing for online orders, they’ve always found ways to make the process more efficient, which has given us the ability to focus on our core business. The USA is now a key market for Canyon Bikes and we’re excited for our continued growth in this market for years to come.”

Related: Using a Single Third-Party Logistics Provider to Support Worldwide Supply Chain Operations

Using a Single Third-Party Logistics Provider to Support Worldwide Supply Chain Operations

Related Papers & eBooks

Download the Paper

Ecommerce Delivery – What Do Your Customers Want?
This paper includes 3 real delivery scenarios and the supply chain and logistics needs, case studies, of London’s Portobello Road MOU company, the iconic Lulu brand, and Escalade Sports. Download Now!

Download the Paper

The Ecommerce Logistics Revolution
In this special issue, the editorial staff of Logistics Management has compiled feature stories that encapsulate the software, technology, and processes that are helping today’s retail and manufacturing professionals exceed ever-increasing customer demands – whether in B2B or direct to consumers. Download Now!

Download the Paper

The Guide to International Shipping
There’s a lot to think about before you can launch internationally, so, we’ve put together our three steps to international shipping for eCommerce retailers to help you plan your strategy. Download Now!

Download the Paper

Don’t Damage Your Retail Brand by Breaking Promises with Your Customers
Whether they’ve been made explicitly or implicitly, failing to keep any promises you make as your customers travel through the purchase journey with you could have a significant impact on your brand. Download Now!

More SEKO Logistics Resources

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Walmart’s Doug McMillon: What I’ve Learned Since Becoming President & Chief Executive Officer

April 24, 2019 · By Doug McMillon 

Note: Walmart CEO Doug McMillon’s letter to shareholders is republished here from their 2019 annual report.

Clear and constant.

Know what else is constant at Walmart? Change. As I visit with our associates all over the world and ask, “Other than our purpose and values, the only thing that’s constant at Walmart is …” and they respond: “Change!” It’s a powerful mindset, and our people have it.

These past five years in this role have passed quickly, and it has been an exciting time to be at Walmart. Looking back, I’m not sure I could have imagined some of the things we’re doing in our business today but, at the same time, it feels like we’re just getting started.

Our customers and Sam’s Club members are being served by associates who are better equipped to create new ways of shopping and put today’s technology to work. Our goal is to make it easy, fast, friendly and fun to shop with us. Consider:

A busy mom can shop on our app or get through the store faster by finding the items on her list, thanks to the map feature on her Walmart app. She can make purchases with Walmart Pay and go digital to skip the pharmacy line and pick up a prescription.

Outside our stores, customers can pull into a pickup spot, have their personal shoppers put their order in their trunk and off they go. eCommerce has finally come to the food business and in a big way.

We’re putting technology to work with an autonomous scanner that checks our side counters to help us improve in-stock levels, and an autonomous floor cleaner that carries a camera to gather data on our product features to share with a FAST Unloader system in the back room that prioritizes items for restocking.

Our Sam’s Clubs are becoming more digital. With our Scan & Go app, customers bypass the checkout line and pay for items on their mobile device, and now we’re testing computer vision instead of barcodes to make the process even faster. Our new Membership Express can cut the time it takes to sign up from eight minutes to fewer than 60 seconds.

The ways we can use technology today and in the future are exciting, but our business is still a people business. We are people-led and tech-empowered, and that makes investing in our associates a strategic priority. On any given day, our associates may be attending one of our new training academies in the U.S. or entering our new fast-track leadership program for Walmart International. They may be benefitting from our expanded parental-leave policies or beginning their careers at Walmart with a starting wage 50 percent higher than it was four years ago. And they may be extending their education with a $1-a-day college degree through our Live Better U program. We’ve made a lot of changes with respect to opportunities for our associates, and there’s more to come.

No doubt the pace of change continues to increase. Recently, I was visiting with a group of students, many of whom are joining our company, and one of them asked me what I had learned during my five years in this position. Surprises? Revelations? It’s a good question, and I’ve been giving it some thought.

These five lessons came to the top of the list:

  1. Leadership – You can’t push a rope, but you can pull it. In other words, sometimes you just can’t lead from behind. You can’t muscle or push things along. As a leader during transformation, you have to be out in front – show that you want to learn, be curious, introduce new ideas, ask questions. Our people are talented, competitive and have a sense of urgency. When they hear about a better way of doing things, they engage, learn and act.
  2. Risk – There is no growth without change, and there is no meaningful change without risk. So, get comfortable with an intelligent level of risk. Otherwise, the law of diminishing returns sets in as always doing the same things the same way takes over. We invested substantially in wages, associate education, pricing, and eCommerce. We acquired FlipkartJet, and others, and we partnered with global technology companies in places like China and Japan. We don’t know what Sam would have done in these moments, but we know he would have been adapting – and he would have been aggressive. We’re drawing on that legacy today and tapping into that DNA.
  3. Time Horizon – We’re playing the long game. Our priority is to position our company for long-term success. History has shown us that companies that focused too much on the short term were doomed to fail. Managing our business on a daily basis is important, but our most important strategic decisions are made in light of what we want our company to become for the next generation.
  4. Our Associates – People will surprise you. Several times a week I see or hear about something creative our associates have done. It’s inspiring to see their ingenuity and pace. Around the world, Walmart associates feel more comfortable taking risk. They’re launching minimum viable products to test and learn from. These have enough function to satisfy early adopters, whose feedback informs future design. Result: We go from Product 1.0 to Product 2.0 a lot faster. This is a powerful unlock. We’ve always said that our people make the difference. We’re certainly seeing that today.
  5. Trust – It’s a challenge to have the broader world know the Walmart we know. As we strive to make our company better, we will also look for ways to build trust by communicating the good work our people are doing and its impact. Included is the work we are doing to strengthen our culture of integrity and improve our compliance talent, processes and systems. In our supply chain, we are eliminating waste, using more renewable energy, reducing carbon emissions and making our items and the packages they come in healthier and more sustainable. Of course, we aren’t perfect. We make mistakes. But, if the world could see all of the hard-working, well-intentioned people inside our company who are making things better in their communities and in the world, I’m convinced they would be moved by it all. I am.

The progress we’re making is reflected in our results. Last fiscal year, we increased total revenue by 3 percent to $514.4 billion, and we generated $27.8 billion in operating cash flow. Breaking it down, Walmart U.S. grew comp sales 3.6 percent, excluding fuel – the highest annual growth rate in a decade – and eCommerce sales increased 40 percent, nearly doubling the sales of that business over the past two years. And the momentum continued at Sam’s Club with comp sales growth of 3.8 percent, excluding fuel.

Walmart International posted positive comps in eight of our markets, including the four major markets, as we also see our digital transformation and innovations taking hold outside the U.S. In Mexico, many of our customers don’t have bank accounts, so the team there launched a new app called Cashi that acts as a digital bank account. At our stores, customers exchange cash for an electronic deposit onto their mobile device then use the app to shop in the store, online, and even to pay their other bills.

In many parts of China, same-day delivery really means same-hour delivery. To meet that demand, we invested in a crowd-sourced delivery platform, and now customers in some locations can receive their merchandise within an hour of placing the order. We are also making good progress on omnichannel initiatives in places like Canada and in Japan where we are partnering with eCommerce leader Rakuten to offer grocery delivery.

India has 1.3 billion people and an economy approaching $3 trillion, yet its eCommerce business is less than 3 percent. With our acquisition of Flipkart, we have positioned ourselves for growth in one of the top three markets in the world.

We are deliberate about where and how we operate. For example, we finalized the majority sale of the business in Brazil, and we continue to explore ways to best serve our customers around the world.

This is a period of significant change at Walmart. I think the pace and magnitude of our changes are critical to the company’s future as we adapt to an environment that is changing more quickly all the time. We are changing how we work and what we do without changing our purpose and our values. To our customers, thank you. We’ll continue to work hard every day to earn your trust and business. To our associates, we are proud of you. Keep it going. To our shareholders, thank you for your interest in our company and your continued support.

Doug McMillon, President and Chief Executive Officer, Walmart Inc.

Doug McMillon
President and Chief Executive Officer
Walmart Inc.

Omni-Channel Logistics Leaders Papers

Download the Paper

Omni-Channel Logistics Leaders: 5 Key Insights to Improve Inventory Performance New!
This joint research study, conducted by LEGACY Supply Chain Services and Adrian Gonzalez of Adelante SCM, examines and provides insight into leading inventory management challenges, opportunities, and best practices. Download Now!

Download the Guide

Keeping Up with the Retail Consumer
6 supply chain disciplines retailers must master – developed by Adrian Gonzalez, founder and president of Adelante SCM and LEGACY Supply Chain Services, with a foreword from Rick Blasgen, president and CEO, CSCMP. Download Now!

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Evolving a Large U.S. Retailer from Good to Great
LEGACY executed a comprehensive startup project plan to fully transition operational control of LSR Inland Empire operations, discover how this solution was executed with zero disruption to the business. Download Now!

More LEGACY Supply Chain Services Resources

More LEGACY Supply Chain Services Resources
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Using a Single Third-Party Logistics Provider to Support Worldwide Supply Chain Operations

Ember Technologies, Inc.

There’s nothing worse than getting halfway into what was once a piping hot cup of coffee or tea, only to have it go cold on you.

But what if you could customize that drink’s temperature as you consumed it, vary the degrees to see how it affects the taste, and enjoy your hot beverage right down to the last drop?

That’s exactly what Clay Alexander was pondering back in 2010, just before founding Ember Technologies, Inc. (Ember), a design-led temperature control brand that’s now creating a new category of consumer products.

It all started with Alexander’s scrambled eggs, which he, of course, preferred warm versus cold. “I think I can make a heated plate to keep my eggs warm,” the serial entrepreneur said to himself.

If the idea sounds far-fetched, think again. An inventor, Alexander holds over 100 patents worldwide and is the inventor of General Electric’s LED light bulb, the GE Infusion. He started his first company, Radiance Lightworks, in 1999 at the age of 23. Radiance has since become one of the top lighting design agencies in the country with a client list that includes Universal Studios, Mattel and 20th Century Fox.

It didn’t take long for Alexander to solve his cold breakfast problem, but that discovery sparked another question in his mind: What if he could use the same technology – a combination of radio-controlled batteries, heating elements, and sensors – to keep coffee, tea and other drinks hot? Would it be better than those heated, coaster-like mug warmers?

“And with that, Clay set off to invent the world’s first temperature-controlled coffee cup,” says Phil Poel, Ember’s COO.

Breaking the Mold

The company’s first product was a travel mug, which a team of Ember engineers presented to Starbucks – a company that puts great effort into growing, hand-picking, and roasting its coffee beans, only to have the final product poured into a paper cup.

“We put some Starbucks coffee in one of our mugs and asked them to set it at the desired temperature,” says Poel. “They enjoyed their drinks right to the last drop…it went over really well.”

Starbucks put Ember’s travel mug on its shelves for retail sale in 2016. “They sold out in a couple of weeks,” says Poel. “Then they asked for coffee mugs versus travelers. That request transformed our company from ‘startup’ to ‘real company.’” Best Buy jumped onboard not long after, with both partnerships boosting Ember’s sales from $1 million to $14 million “basically overnight,” says Poel.

With the unexpected boost in sales came new manufacturing and distribution challenges, the likes of which the company hadn’t experienced before. “When you have two customers and a few SKUs, the logistics are pretty easy,” says Poel. “The next thing you know, we were making and selling accessories and a variety of different colored mugs.”

When Ember signed Apple as a customer in 2018, the need for a streamlined, reliable logistics and transportation setup became even more important for the innovative manufacturer.

“We knew we needed a great third-party logistics [3PL] partner to handle projects like launching in Apple stores in 26 different countries, and in a single day, opening global e-commerce channels and supplying to TMall China. That in and of itself tells the story of why we needed a reliable logistics partner on our side.”

Up to that point, Zachary Horton, Ember’s shipping and logistics coordinator, says the company was using several different 3PLs to get its products delivered to its large retail customers. “None of the systems were integrated,” he says, “so after exploring our options, we made a conscious decision to make SEKO Logistics our primary 3PL.”

Miguel Garcia, Operations Manager, SEKO Logistics and Phil Poel, COO, Ember Technologies, Inc.

Left to right: Miguel Garcia, Operations Manager, SEKO Logistics and Phil Poel, COO, Ember Technologies, Inc.

To make that all-important decision, Ember got its finance, operations, logistics and Asia-based procurement team involved in the process. “We got together a good cross-section of departments in order to get a good view of what the 3PL had to offer and how that aligned with our organizational goals,” says Poel.

Value-Justified Cost, Please

In 2017, Ember decided to bring its entire distribution chain under a single umbrella. The relationship started with Ember’s connections to SEKO’s Hong Kong team and its primary manufacturing locations in Zhuhai, China, and has since extended across its entire supply chain.

After spending about three months setting up the system, the two companies officially began working together in April of 2018. “We put time into making sure everyone was aligned, teaching SEKO about our brand,” says Horton, “and making sure we all understood our respective roles.”

Poel says that the time that went into the setup process was well spent. “Our 3PL spent a lot of time with us to gain a better understanding of our brand and our goals and didn’t just say: ‘Yes, we can ship your product,’ or ‘send us a box and we’ll ship it,’” Poel explains. “In total, we probably had six different meetings with SEKO – two in Hong Kong and four in the United States – before getting started.”

During those meetings, Poel brought up the “value-justified cost” of working with a single 3PL. In fact, he wrote those three words on a whiteboard to reinforce Ember’s goal of making sure all of its logistics moves are value-justified. “Typically, when you go into these relationships, you wind up negotiating freight rates, weights as well as dollars and cents,” Poel explains. “The process gets pretty convoluted, with companies selecting one provider in order to save two cents here or a penny there.”

Clay Alexander, Founder and CEO, Ember Technologies, Inc.

Going against that convention, Ember decided not to discuss price. And while it did crosscheck the 3PL’s weights and costs (and learned that they were indeed competitive), the manufacturer was more interested in the total cost of ownership of the new relationship.

“We told SEKO that we wanted them to bill us based on value-justified cost,” Poel recounts. “At that point, the whole conversation just stopped and SEKO’s commercial officer looked at us and said: ‘That’s the best answer I’ve ever heard.’”

Streamlining the Supply Chain

Before moving to a single 3PL, Ember was using one warehouse for e-commerce fulfillment and a separate facility to supply its retail customers. That setup required two completely different sets of inventory, communication modes, and fulfillment approaches.

Today, the manufacturer’s 3PL handles all of its global e-commerce and retail shipments from three locations (U.S., Hong Kong, and the UK) that are all fully integrated.

Having retail and e-commerce distribution under a single system allows Ember to “ebb and flow with demand,” says Horton, “and to ensure that it has all of the necessary pieces in place to deal with sales spikes.” In some cases, those spikes appear at the wee hours of the morning.

Recently, for example, Ember needed to get a shipment from Hong Kong to the United States by 8 a.m. the next morning. “We were on the phone with SEKO at 2 a.m.,” Horton recalls, “and they got our stuff ready to ship and on the plane within six hours and made it happen.”

By using a 3PL that provides this type of over-the-top customer service will be critical for Ember as it continues to grow, both in terms of adding new customers of its own and on the product expansion front. “We’re growing quickly and we need a logistics partner that can go with the flow, so to speak,” says Poel.

“SEKO has been extremely flexible and is always standing by ready to provide new solutions, come up with new approaches, and work with us to solve our logistics issues. That makes them a great partner for us.”

According to Poel, other key benefits include strong global collaboration between Ember and the 3PL’s teams in the United States, Asia, and Europe, and the way in which the logistics provider’s warehouse management system (WMS) seamlessly integrates with the manufacturer’s own systems. “They came in and taught us how to use the WMS,” says Horton. “That was a huge win for us.”

Moving to a single 3PL also helped to streamline outbound shipments and the related communications that, in the past, involved numerous different providers. “Using just one form of communication has been a lot more efficient for us as we’ve grown and expanded,” says Horton, “and without the need for a lot of our own internal systems.”

Crystal Clear Alignment

To shippers that are in expansion mode and looking for a 3PL to help them manage their global supply chains, Poel says that the best approach is to bring all of your issues and lay them out on the table in front of the provider. Then, take the time across several meetings to ensure “crystal clear alignment” between your operations and the provider’s capabilities.

“You want a 3PL that can pick your issues apart and show how it can help you work through them – someone that offers real solutions, not just lip service,” says Poel.

“You’re going to run into multiple 3PLs that say they can do this or that for you when a better approach is to tell them what your challenges are and let them offer solutions. That will save you a lot of time and minimize headaches.”

Related: SEKO Logistics Acquires Chicago-based Forwarder and Compliance Specialists GoodShip International

SEKO Logistics Acquires Chicago-based Forwarder and Compliance Specialists GoodShip International

Related Papers & eBooks

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The Guide to International Shipping New!
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Don’t Damage Your Retail Brand by Breaking Promises with Your Customers
Whether they’ve been made explicitly or implicitly, failing to keep any promises you make as your customers travel through the purchase journey with you could have a significant impact on your brand. Download Now!

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eCommerce Delivery – What do Your Customers Want?
When it comes to the delivery of goods bought online, consumer expectations are becoming ever more demanding. Download Now!

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The Ecommerce Logistics Revolution
In this special issue, the editorial staff of Logistics Management has compiled feature stories that encapsulate the software, technology, and processes that are helping today’s retail and manufacturing professionals exceed ever-increasing customer demands – whether in B2B or direct to consumers. Download Now!

More SEKO Logistics Resources

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Technology’s Role in a Logistic Service Providers Strategy and Value Proposition

The Role of Technology in a Logistics Partner’s Strategy and Value Proposition

In this informative discussion with Adrian Gonzalez of Talking Logistics, Sonny Catlett, Sr. Vice President of Operations at HNRY Logistics explains how this newest operating company of YRC Worldwide is bringing together the right people, with a large network of assets and a strong Transporation Management Systems (TMS) technology partner to make direct-to-carrier shipping simpler for its customers (watch video to the right).

Catlett explains that the top reason HNRY Logistics chose 3Gtms was that of its robust rating engine and flexible platform.

“We needed to support five lines of service through our brokerage operation and 3G’s robust rating engine provided the power and flexibility to support all of our lines and present rates back to our customers through our myHNRY portal.”

myHNRY portal

Remember that time you said, “I wish there was an easier and more affordable way to ship and manage my freight?” Well HNRYLogistics made your wish come true.

With myHNRY, finding the best prices and brokerage options is as easy as searching for airline flights or hotels. And with our backend technology and customer account management portal, managing your shipments after they have been booked is easier than ever.

And with a wide network of available carriers, we can offer the pricing, services, and options to fit your needs.

HNRY Logistics

Catlett goes on to explain that for HNRY Logistics, the build or buy technology decision for getting a brokerage operation up off the ground came down to selecting a TMS platform that would be fast to market, allow them to get up and running quickly, yet remain agile to support our fast-growing business.

“We wanted to buy a solution from a TMS vendor that would grow with us and be a long-term partner for business.”

In addition to a robust platform and strong partnership approach, what advice does Catlett have for other Logistic Service Providers?

  • Fully embrace technology and support it with smart people and the right partners.
  • Have a firm grasp on your business strategy, where you want to go and what the solution is going to be.
  • Be agile and prepared to augment your business as you go.

Click on the video above to hear the full interview and learn more about the role of technology in a logistics partner’s strategy and value proposition.

Related Article: 3 Ways to Tell It’s Time to Replace Your Transportation Management System

3 Ways to Tell It’s Time to Replace Your Transportation Management System

What Does Your Ideal Transportation Management System Look Like?

A Transportation Management System (TMS) can’t be a one-size-fits-all solution.

Download the 2019 TMS RFP Template!

It must have the flexibility to adapt to your unique business complexities and enable you to work creatively to achieve company objectives – but this requires a level of intimacy that cannot be uncovered with a traditional corporate buying process.

A TMS is a core part of your operations; and like other supply chain execution software, operations usually can’t be described by checkboxes or summarized in a statement.

There is just too much complexity and too many variables.

The 3Gtms 2019 TMS RFP Template

With our 2019 RFP Template for transportation management systems, we’ll help you think beyond whether a TMS has a capability and toward how that capability will potentially work for your operations.

In other words, our TMS RFP Template is designed to help you uncover the what and the how of a transportation management system.

Download the 3Gtms 2019 TMS RFP Template Now!

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Tariffs Present Different Supply Chain Challenges for Shippers

Well, that time is now officially here, with the White House saying it’s moving forward with a 25% tariff on $50 billion of goods imported from China, as well as focusing on: protecting domestic property and intellectual property; stopping noneconomic transfers of industrially significant technology and intellectual property to China; and enhancing access to the Chinese market.

So instead of the “what if” scenarios that had been floated and discussed, we are instead in a “what now” scenario. And, to be sure, that scenario is fairly open-ended at this point.

For nearly 18 months, or even longer, there have been steady gains in United States-bound imports from China, with much of it due to the pending, now actual, tariffs, which have been by viewed by many as protectionist measures.

What happens now remains to be seen on myriad fronts, but one thing for certain is that these new tariffs are not catching anyone by surprise, as the very real possibility of them taking effect has been really going back to early March when the White House first floated the possibility.

Much of what is driving the White House’s tariff endgame is the need to compete on a global basis, which requires the U.S. being able to grow its global exports, according to Walter Kemmsies, Managing Director, Economist and Chief Strategist for JLL’s U.S. Ports, Airports, and Global Infrastructure Group.

“It is important, as the U.S. [collectively] is not the youngest or most vibrant consumer group in the world,” Kemmsies said.

“While there are a lot of millennials out there, it is going to be a while before they become ‘hardcore’ consumers like their parents are. If you are really going to grow, you want to tie your economy to where the consumers are spending and the consumer is global and spending on things like food, where we are really well positioned, clothing, automobiles, and appliances. We are also the world’s most efficient plastics producer….we need to leave the markets open for that and also to compete on an equal basis. In the end, what the U.S. really is asking the world is to ‘let our companies compete with yours on an equal basis.’”

And in order for global shippers to weather whatever tariff storms that may be coming, taking a longer view of trade beyond just the U.S. and China is a good step to take.

That requires looking into setting up production and distribution operations in places like Vietnam and India, as well as parts of Africa, which Kemmsies said are emerging.

“If you are going to operate as a global company, you need to make your decisions that way, too,” he noted.

“When you look across certain products, you can see how bad some supply chains are actually managed if they are not. It makes no sense not to truly diversify globally. If you source stuff in one country and sell it in another, you are extremely vulnerable.”

What’s more, even if these tariffs do not lay out the possibility of a full-on trade war, Kemmsies said there is no benefit for shippers to be so concentrated on one country, even though China has the capacity and manpower to meet the needs of many shippers. But for products and designs that can change on the fly, he said China is not optimal, as it is more large scale-focused.

While Kemmsies stresses shippers look beyond China, Ben Hackett, founder of maritime shipping consultancy Hackett Associates, made the case that implementing tariffs will result in retaliation from major U.S. trading partners, calling it a “shoot yourself in the foot” strategy.

Panjiva research director Chris Rogers

“In a world with no President Trump and President Xi shouting at each other, we are feeling pretty optimistic about things”Chris Rogers, Research Director, Panjiva

“How is that good for America? If the steep tariffs are put into place expect higher producer costs and lower exports,” said Hackett. “Again, neither good for the American economy nor the consumer. Nothing is certain anymore in Washington, D.C.”

And Panjiva research director Chris Rogers noted that despite the back and forth between the U.S. and China regarding tariffs and related protectionist measures, things overall are in a pretty decent place, as it relates to global trade.

“Trade fundamentals remain solid,” explained Rogers.

“In a world with no President Trump and President Xi shouting at each other, we are feeling pretty optimistic about things. Consumer confidence and business confidence are down a little bit but still remain at high levels. Most products [categories] are seeing solid growth, but there remains an overhanging worry about tariffs finally arriving, with the ones for metals already intact. But once others kick in, there could be a sense of the wheels coming off the wagon.”

And he also noted that there has recently been a step back in shipments from China that is not directly related to tariffs on shipments from China being implemented but rather to concerns that tariffs ‘might’ be implemented.

“One could argue that the mixture of nervousness, coupled with sensible supply chain strategies, could lead to less growth,” he said.

“But things are a long ways from not growing as much as in the past, as opposed to [shipment levels] actually falling. It is possibly a sign of more to come, with signs of a summer slowdown, much like what has occurred over the past two years.”

It’s a brave new trade world now, and it looks like it will be quite the ride.

Related Article: Trade Relations are Building a Bigger Wall Between US & China

Trade Relations are Building a Bigger Wall Between US & China

Related White Papers

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Global Apparel Leader Achieves Swift Footing In and Out of China
Apparel company now is looking to expand to further solidify its competitive advantages to and from China. Download Now!

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China Trade Operations: Trends and Advancements
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The Keys to Effective China Trade Operations
China’s dominance as the world’s top country for sourcing hasn’t swayed under the pressures that have been the topic of discussion in the boardroom, on the campaign trail, around the dining room table, or during trade negotiations in nearly every country around the world. Download Now!

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Study Shows CFOs Lack Visibility Into Their Organization’s Business Spend Management

A study of more than 500 chief financial officers (CFOs) and senior finance executives conducted by The Economist Intelligence Unit (EIU), commissioned by Coupa Software, reveals that more than 60 percent of CFOs lack complete visibility into the transactions within their organizations.

In addition, 76 percent think leveraging new technologies or improving processes would enable their organizations to work better with other functions to execute corporate finance strategy.

The study, titled, “The Strategic CFO in a Rapidly Changing World,” takes an in-depth look at how CFOs and senior finance professionals are responding in a rapidly evolving world where new technologies, uncertainty, and emerging threats abound.

Qualitative interviews were completed with CFOs from Ally Financial, Driftwood Acquisitions and Development, Hays, Micron Technologies, and Zendesk.

“The results of this study are not surprising – visibility remains a huge challenge for CFOs in today’s dynamic and ever-evolving business environment,” said Rob Bernshteyn, chief executive officer, Coupa.

“Visibility remains a huge challenge for CFOs in today’s dynamic and ever-evolving business environment, and it’s critical that CFOs adopt a cloud-based strategy that enables them to have visibility and control over their spend to make more strategic and informed business decisions.”

Additional findings include:

  • 67 percent see process or technology improvement as critical to managing risk.
  • To better manage costs, 60 percent believe process or technology improvement is critical.
  • Breaking down silos and improving cross-department collaboration is key. Nearly 60 percent who assess their organizations as most able to manage risk, cost and capital also describe their companies as collaborative.

Automation and cloud computing are the top two emerging technologies that finance executives most expect to help execute corporate finance strategy.

Business performance risk is the number one threat with the potential to impact the financial position of those organizations surveyed.

A cloud platform for business spend management, Coupa helps customers such as Airbus, BAE Systems, Lululemon, and Salesforce maximize their spend under management, achieve significant cost savings, and drive profitability.

Survey Methodology
The survey, commissioned by The Economist Intelligence Unit includes responses from 507 CFOs and finance executives across industries and located in the US, UK, France, and Germany. 75 percent of respondents are chief financial officers (CFOs) and 25 percent are corporate finance professionals who are at the vice president-level or above.

See How Much Coupa Can Save You
Savings. One of the most critical strategic objectives in Spend Management today. From day one with Coupa, we drive you to savings. First by establishing specific KPIs that define success. Then by getting you live faster than you’ve ever experienced with enterprise software.

Download the 2018 Benchmark Report: 12 Ways to Measure Business Spend Management Success

To see what you could save in seconds, just complete the form and hit ‘Calculate My Savings.’

How Strategic CFOs Gain Control with Business Spend Management

How Strategic CFOs Gain Control with Business Spend Management

The challenges addressed in the EIU Report, “The Strategic CFO in a Rapidly Changing World,” are at the heart of modern Business Spend Management (BSM).

As businesses grapple with global economic uncertainty, an increasingly technology-driven world, changing consumer preferences and other factors that affect corporate performance, CFOs have an opportunity to take on a more strategic role and guide their companies to success.

Providing CFOs a single point of control for managing business policies and processes for all spend – whether it’s a pre-approved requisition against a contract, a post-approved business expense report, or an un-approved non-backed invoice – BSM offers finance leaders an easy way to gain control of all of their spend.

Download the report to learn how CFOs are responding in a rapidly evolving world where new technologies, uncertainty, and emerging threats abound. The report also includes five qualitative interviews with the CFOs from Ally Financial, Driftwood Acquisitions and Development, Hays, Micron Technologies, and Zendesk.

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C.H. Robinson CEO John Wiehoff Talks Transportation Trends

April 27, 2018 · By 24/7 Staff ·
John Wiehoff, CEO of C.H. Robinson, is one of the keynote speakers for the Connections 2018 supply chain conference, which will take place June 25-27 at the Greenbrier Resort in West Virginia.

He recently spoke with SMC³, which has served as one of the 3PL’s long-time partners, about emerging technologies in the industry, unique supply chain opportunities, and how C.H. Robinson uses technology to optimize its business.

What are some of the major trends you’re currently seeing in the LTL marketplace?
Demand for LTL is higher than we’ve seen it in nearly 10 years. This shift is an especially significant change when paired with supply changes. Both manufacturing and e-commerce are extremely strong right now, and both have close ties to LTL.

Online orders are driving smaller shipments to the LTL space, not just in the final-mile area. Smaller orders are becoming more common for the middle mile – from one distribution center to another.

LTL capacity is tight because carriers have not added a significant amount of equipment to their fleets in recent years. But even if there was an influx of tractors, there aren’t enough drivers available.

Historically, the driver shortages that affected the truckload market remained mostly out of the LTL space, but even that is changing. Growth in other sectors that have a shared labor force with truck drivers means more LTL drivers are leaving for options that are more lucrative.

As LTL carriers look to be more productive, we are seeing them place a large emphasis on optimizing their networks. With the data, analytics, and tools like dimensionalizers available to them, LTL carriers are paying more attention to accepting the right freight in the right lanes at the right time. More isn’t absolutely better anymore.

How has the ELD mandate impacted the domestic transportation market?
Drivers are reaching their hours of service in shorter timeframes, especially given the tight capacity. Organized and efficient loading/unloading times will become even more important. Reducing driver wait time at either the origin or destination can have a significant impact in a driver’s hours of service.

Both carriers and shippers may rely more heavily on 3PLs. A 3PL can help identify and solve capacity shortages, handle potential rate increases and address other issues from the mandate.

John Wiehoff, CEO of C.H. Robinson

How does C.H. Robinson use new technology to optimize its business, and are there any emerging technologies that will be game changers for the supply chain industry?
We are using technology to reinvent what it means to be a leading 3PL for this industry, our customers, and carriers.

Our technology offering is at the center of what we do and is embedded in our services and solutions every day.

You can see the importance technology has within C.H. Robinson by the number of IT staff and investments we have made and continue to make – we’ve added more than 800 IT staff and invested over $1B in the last decade.

As our business grows – now to more than 120,000 customers who worked with us on more than 19 million global shipments last year – we increasingly rely on technology.

Technology backed by data is critical to the success of our business. As one of the largest 3PLs, we have arguably more first-party data than anyone else in the industry. But, that data doesn’t matter if we don’t use it to our and our customers’ (shippers and carriers) advantage.

That’s why we are continuing to invest in and build tools that leverage the amount of data we have available to us.

The Connections 2018 supply chain conference is perfectly positioned at the midpoint of the year, giving speakers a chance, to sum up, the first half of 2018. What themes have defined the first half of the year, and what will define the transportation market during the second half?
For the first half of the year, we saw efficiencies in utilizing capacity, as truckload utilization climbed to more than 95 percent, according to FTR Transportation Intelligence. At the same time, new trucks increasingly entered the market to replace retiring trucks.

For the second half, these factors will combine for a focus on hyper-efficiency and the most effective use of capacity. We’ll be able to see if the strong truck sales of the first half of the year will add capacity or primarily serve as replacement capacity. We’ll also be able to put our finger on the real effects of ELD.

How can shippers and 3PLs better position themselves to take advantage of supply chain opportunities in the marketplace?
As supply chains grow in both size and complexity, transportation management technology will be an important way for 3PLs to help shippers gain a competitive advantage and exceed their customers’ expectations. That’s why we are invested in delivering and implementing flexible, efficient and integrated technology solutions that connect all aspects of the supply chain.

Read: Transportation Management Systems Market 2018

It is not so much what changes are coming to the industry; it’s more important to focus on what the innovative supply chain of the future will look like and recognize that it will take people, processes, and technology to bring positive change.

Digitalization of supply chains is our opportunity to continue bringing technology to our customers and their supply chains that make them smarter and more efficient. The technology we are able to bring today and into the future has to go beyond freight matching to encompass the complexities of today’s and tomorrow’s supply chains.

An algorithm can do amazing things, but when a truck gets delayed or a delivery window changes, people are still able to provide the most effective solution.

To hear more from John Wiehoff and other industry experts, sign up today for the three-day supply chain conference Connections 2018 to learn about emerging trends, current challenges and new innovations in the supply chain.

Register here by April 30 to take advantage of early-bird pricing.

Raise Your Supply Chain IQ
Connections 2018 | June 25 – 27 | The Greenbrier, WV

Why Attend Connections 2018

To REGISTER for SMC³’s Connections 2018, visit

Related Article: SMC³ Announces Connections 2018 Speaker Lineup

Related Resources

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Why eShipping Selected the SMC³ Platform for Transactional LTL API Connectivity New!
In this case study, Chad Earwood, CEO of eShipping, describes how they integrated the SMC³ platform for transactional LTL API connectivity, and by using the analytical APIs RateWare XL and CarrierConnect XL they are able to obtain immediate LTL rates and audit LTL pricing. Download Now!

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Strategic LTL Bidding for Minimum Cost & Maximum Efficiency
This paper details how SMC³ designed Bid$ense for complete procurement transparency, and how you’ll move ahead with ease and confidence toward best-choice carrier qualification and truly strategic LTL procurement. Download Now!

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The Case for a Re-Indexed LTL Benchmark Pricing System
This paper takes a deep dive into SMC³’s CzarLite XL, an advanced pricing system solution that gives shippers, logistics service providers and carriers a new neutral benchmark choice when negotiating LTL shipping rates. Download Now!

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The Single Source for LTL Pricing & Transit Information
The SMC³ Platform empowers 3PLs and Shippers of any size to successfully navigate and optimize the LTL shipment arena, choose the level of computing power based on your specific needs and operating environment with a technology platform offering the best of all worlds. Download Now!

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Good Bye Wal-Mart Stores Inc., Hello Walmart Inc.

While Wal-Mart Stores as a corporate legal name is rarely used in public-facing materials or in stores themselves, CEO Doug McMillon said in a statement that he felt the name change to Walmart Inc was needed to be “consistent with the idea that you can shop us however you like as a customer.”

McMillon added: “Our customers know us as Walmart and today they shop with us not only in our stores but online and with our app as well.”

The new name won’t change anything about how Walmart does business. It’s just another iteration of the company’s growing emphasis on e-commerce and its departure from the purely store-based strategy of its past.

The stylistic change from Wal-Mart to Walmart means the name now matches the retailer’s website address,

Walmart’s name change could also be a reaction to Amazon’s purchase of Whole Foods earlier this year.

Doug McMillon, President & CEO, Walmart Inc.
“Our customers know us as Walmart and today they shop with us not only in our stores but online and with our app as well”

— Doug McMillon, President & CEO, Walmart Inc.


Walmart saw a need to up its online presence in 2016 with the purchase of for $3.3 billion.


Walmart Changes its Legal Name to Reflect How Customers Want to Shop

BENTONVILLE, Ark., Dec. 6, 2017 – Reflecting its growing status as an omni-channel retailer Walmart today announced plans to change the company’s legal name from Wal-Mart Stores, Inc. to Walmart Inc. effective Feb. 1, 2018.

The name change chiefly demonstrates the company’s growing emphasis on serving customers seamlessly however they want to shop: in stores, online, on their mobile device, or through pickup and delivery.

“Our customers know us as Walmart and today they shop with us not only in our stores but online and with our app as well,” said Doug McMillon, Walmart president and CEO.

“While our legal name is used in a limited number of places, we felt it was best to have a name that was consistent with the idea that you can shop us however you like as a customer. Looking ahead, we’ll continue to invest in and strengthen our stores around the world and expand our eCommerce capabilities as we help save customers’ time and money. As time goes on, customers will increasingly just think of and see one Walmart.”

Walmart operates under nearly 60 different banners around the world, including eCommerce sites, and has more than 11,600 stores and clubs in 28 countries. The company opened its first international location in Mexico City in 1991 and launched in 2000.

Walmart will continue to trade on the NYSE as WMT and the company name should be referenced as Walmart.

Walmart’s formal legal name when it incorporated on Oct. 31, 1969, was Wal-Mart, Inc. It was changed to Wal-Mart Stores, Inc., on Jan. 9, 1970 and has remained in place the past 47 years since Walmart went public that same year.

The company has been using the current Walmart logo in its operations since June 2008.




Related: Walmart Reinvents the Returns Process as Amazon Tries to Play Catch-Up

Walmart Reinvents the Returns Process as Amazon Tries to Play Catch-Up

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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.

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 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

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

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

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

Image Credit: Dan Vasconcellos

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

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MIT Supply Chain Management Master’s Program Ranked No. 1 in the World

The MIT masters program in supply chain management has been ranked as the world’s No. 1 graduate business program in supply chain and logistics by Eduniversal, the Paris-based global rating agency for higher education.

This is the second time the MIT master’s program has been ranked No. 1 by Eduniversal.

The 10-month master’s in supply chain management program at MIT has been educating supply chain professionals for almost 20 years, and is the model for graduate programs in centers across MIT’s Global Supply Chain and Logistics Excellence (SCALE) Network.

The program is currently offered at the MIT Center for Transportation and Logistics in the United States, the Zaragoza Logistics Centerin Spain, and the Malaysia Institute for Supply Chain Innovation in Malaysia.

“Our MIT master’s in supply chain management program is providing the supply chain talent that companies need to thrive in today’s highly demanding commercial environment”Yossi Sheffi, the Elisha Gray II Professor of Engineering Systems at MIT and director of the MIT Global SCALE Network

A variant certification, the graduate certificate in logistics and supply chain management, is offered in Latin America.

Graduate programs in the newest SCALE centers – Luxembourg Center for Logistics and Ningbo Supply Chain Institute in China – will commence this fall.

Business professionals from around the globe enroll in the top-ranked program to hone their supply chain expertise and advance their careers.

They learn the latest supply chain management methods, engage in cutting-edge research, and interact with industry through site visits, lectures from C-level executive speakers, and dozens of recruiting opportunities.

MIT SCALE graduates are in high demand in a wide range of industries.

This year’s graduates have already accepted positions with leading firms such as AppleAmazonGeneral MillsGeneral MotorsThe Boston Consulting GroupMcKinsey and CompanyConverseDeloitte, and more.

Yossi Sheffi, the Elisha Gray II Professor of Engineering Systems at MIT and director of the MIT Global SCALE Network, stated;

“A company’s ability to efficiently manage its supply chain has become a key competitive differentiator across the globe. Our MIT master’s in supply chain management program, which is consistently ranked as a world leader, is providing the supply chain talent that companies need to thrive in today’s highly demanding commercial environment”

In addition to this 10-month program, MIT Center for Transportation and Logistics also offers a MicroMasters credential in supply chain management (watch video above).

Through five online courses and a capstone exam learners get access to an advanced, professional, graduate-level foundation in supply chain management comparable to one semester’s worth of coursework at MIT with the same faculty members.

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