John Hill Jim Shephard Tan Miller and Jim Tompkins discuss the technology challenges facing the industry today

John Hill, Jim Shephard, Tan Miller and Jim Tompkins discuss the technology challenges facing the industry today.

MH&L Editorial Advisory Board Roundtable--Part 3: Technology Challenges

In the third installment of MH&L's Roundtable Series, our experts agree that the greatest challenge to mastering technological complexity for the future is the need to master logistics basics today.

The third installment in our MH&L Roundtable Series focuses on why, with the increasing complexity of commerce, we still need to master logistics basics.

MH&L Editorial Advisory Board Roundtable--Part 1: Competing in a Global Marketplace,

MH&L Editorial Advisory Board Roundtable--Part 2: The Infrastructure Capacity Crunch,

MH&L Editorial Advisory Board Roundtable--Part 3: Technology Challenges,

MH&L Editorial Advisory Board Roundtable--Part 4: Channel Changes,

MH&L Editorial Advisory Board Roundtable--Part 5: Talent Development is Your Job

MH&L Editorial Advisory Board Roundtable--Part 6: The Internet of Things and Other Future Destinations

ANDEL: John, you also said, with regard to handling in fulfillment centers, "they would like to move away from multiple facilities serving multiple channels to a single facility or a number of single facilities geographically positioned appropriately to serve their customer bases." So what are some of the things you have seen, John, in the past year that supports your comment?

HILL: People are still challenged by the whole concept, and I hate this word of "omnichannel" or "multichannel." Shipping things to various destinations or users in various quantities is what it is all about. The difference between now and 20 years ago is we are shipping fewer pallets and a lot more pieces or individual items. Directing consumer shipping along with shipments to big box retailers and the like is not an easy task, and it is not inexpensive. Some are making headway. A couple of major retail merchandise purveyors have done extremely well in the past year or so. On the system side of things, one of the things that omnichannel has brought out are very significant differences between the software products on the market for both warehouse control and warehouse management. And we have seen the merger of Accellos and HighJump. I am not sure how many more will come, but I wasn't at all surprised by that event. This is good news for the user. 

On the system side of things, one of the things that omnichannel has brought out are very significant differences between the software products on the market for both warehouse control and warehouse management.

John Hill, director, St. Onge Company

JOE ANDRASKI (founder, Collaborative Energizer, participating remotely): I had the opportunity to be involved with one of the major retailers as they rolled out their omnichannel program. They put the building blocks in place necessary for success.  One of the most critical is something I rarely find mentioned , i.e. item-level RFID [radio frequency identification].  Timely and accurate information, down to the specific size, color, style and quantity, is absolutely essential to meeting consumer expectations.  That information is only available on a real-time basis.

John Hill explains why the basic bar code is still relevant--and why people still get it wrong.

ANDEL: Does today's cloud technology level the playing field for shippers in terms of size and scale for smaller shippers, making participation in omnichannel a little easier?

HILL: Yes, but talk about cloudy. My first reaction was there is a good bit more smoke and mirrors going on currently than I have seen in the not too distant past. People are losing sight of the fundamentals. What's a WMS today? People have almost gotten to the point of taking them for granted without really defining their characteristics or their capabilities in the way we used to. I think that we are going to see some pushback in the next 12 to 18 months, requiring the suppliers to more clearly articulate what it is they have to offer—not only omnichannel, but for more conventional warehousing. 

ANDRASKI:  As we move down the path of building out the transportation network and having product available for shipment to the consumer or available for pickup at a store, three words come to mind:  “simplify, simplify, simplify.” However, it’s not just about moving product from source to consumer, but equally important to move returns in the reverse. Complexity is breeding more complexity—and expense. Industry needs mid-term and long-term strategies.

Still struggling to capture the difference between a distribution center and a fulfillment center?  Listen as Hill, Shephard, Miller and Tompkins tackle that distinction for you. 

ANDEL: It seems that technology is making things both easier and at the same time more difficult for those who lose their way on the fundamentals. We know Jim Shephard has a lot to say about that when it comes to safety--particularly surrounding lift trucks.

"Some companies went too complex too quick , and their work force was not ready to handle that." – Jim Shephard

We have seen more interest in equipment-specific and site-specific training than when we first got into business 30 years ago. In the last two or three years we've seen a real increase in new people calling, saying, "hey, we have a logistics problem where we are not able to get our stuff out the door like we want to. We have people problems." Some companies went too complex too quick, and their workforce was not ready to handle that. So now they are back to grass roots, redesigning back to what they were. Another thing is they have had some workforce change. They got new people in who have no basic skills whatsoever. So they have to bring people back to basics too.

Continued Pg 2

ANDEL: There is an enterprise connection here with regard to operational visibility, not only under roof but also in your supply chain. Part of that is metrics, getting a handle on productivity. Tan, do you have anything to add about visibility in terms of people and their resources?

 

MILLER: I am expecting to see growth in big data from a decision support perspective, especially with omnichannel and online commerce. If you look at the shipping costs being incurred right now, for example online consumers ordering ten garments and returning five, or store personnel deciding to bring in an out-of-stock product from another location on a firm's network, the potential for firms to experience unplanned, high freight expense is significant.  Visibility has expanded and this presents greater fulfillment opportunities and options, which is great, but what I don't see is much about decision support; strategically looking at what are and are not reasonable shipments in terms of cost. What's my shipping priority?  What am I willing and not willing to do for the consumer?

ANDEL: Tan, last year you said, "Go into a lot of very good companies, and you will find an incredible amount of junk in their databases." 

MILLER: I think things are getting much better because cloud technology is making good database and related software capabilities available to many more firms, but if you look at the guts of the data warehouse systems of many firms, there is still a lot of junk out there. 

TOMPKINS: We're seeing this with the move to dimensional pricing by the carriers. Shippers have junk in their database, including the wrong cube information, the wrong product sizes, so we don't know how big the products are. Oftentimes, it is recorded as 1 by 1 by 1 as a default. That's why you will get something that is three times the size of this pen coming in a box that is 3 feet by 3 feet by 2 feet because it hasn't mattered, but now all of a sudden it does matter because UPS and FedEx are concerned about how many dollars they have on the truck. It is not weight; it is cube. It is the dimension that is killing some shippers.  But when you look at how we create a wave, we are going to need to decide which items go in which boxes before we create the wave. This will change how companies do packing and picking, and most of these companies are going to get dim pricing thrown out because it is inefficient.

ANDEL: Ann, how do 3PLs manage issues like this as they ship products for their customers? 

CHRISTOPHER: Many years ago some said if someone could find the perfect WMS they would be a multi-multi-billionaire because there isn't one out there that's going to meet the need of all providers. We are having challenges because some of our customers may want us to do an integration using a major WMS brand and there is a significant cost associated with that. We will put some skin in the game, but the client has to put some skin in the game as well—with a longer contract.

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