Supply Chain Expo Report: Collaboration Keeps Customers

July 1, 2001
Industry leaders who spoke at Chicago's Supply Chain Expo outline important trends in supply chain management. MHM announces the winners of this year's WMS Awards.

Supply Chain Expo Report: Collaboration Keeps Customers

Ed Frazelle reported some startling statistics during his keynote address at Supply Chain Expo, held recently at the Donald E. Stephens Convention Center, Rosemont, Illinois. He said that 40 percent of inventory in the U.S. is obsolete, 30 percent of logistics projects are successful, and only 15 percent of logistics projects involving software are successful. With these gloomy insights, it’s easy to see why collaboration was the rallying cry of most conference speakers at SCE.

Frazelle outlined the seven pillars of superior supply chains: alignment, stratification, optimization, simplification, visibility, education and collaboration (across and between companies).

The first six items are in your control, he said, but collaboration depends on your relationship with supply chain partners.

Ken Ackerman, president of The Ackerman Company, said the best way to build that relationship with partners is to understand them. Visit your customers to see how they perceive service from your warehouse. As for your suppliers, Ackerman said if you develop the right discipline and understanding, you’ll find that staging areas represent a waste of time and space in your warehouse. You should be able to do live loading and unloading, without putting down a load.

Forecasts? They’re never accurate, said Helen Yang, vice president of supply chain management for Sun Microsystems. Although Sun does a six-quarter forecast, it’s visibility and the ability to respond quickly to change that define supply chain excellence.

“Break your forecast into weekly buckets and communicate with suppliers constantly,” she recommended. She also suggested that information system projects be broken into bite-size pieces. That way, you’ll realize benefits faster and achieve better buy-in. Collaboration is a worthy goal, but you must go beyond that to enterprise integration. That will enable real-time, exception-based event monitoring.

But John Hill, principal of eSYNC International, warned against trusting too much in a system to do that monitoring. “The best use of a system is in support of the work force,” he said. You shouldn’t look to employ automatons because there are no fail-safe warehouse management systems. Although order planning and scheduling is a key element of a state-of-the-art WMS with a graphic user interface, the key word there is “user.” The user needs to be involved in supply chain management.

Jim Tompkins, president and founder of Tompkins Associates, said supply chain management too often leads to the optimization of links. What’s needed is pipeline integration focused on the ultimate consumer. It should eliminate surprises — even pleasant ones. All surprises are bad — especially where the customer is concerned.

“You can provide the best customer service but have the worst customer satisfaction,” he maintained.

Supply chains are made of people who must communicate in real time to meet the needs of the people at the end of the chain. Matt Porta, lead partner, collaborative value chain strategy, PricewaterhouseCoopers, concluded that it’s all about collaborative communities. Why collaborate? For visibility of information on inventories, forecasts and order status, all feeding into a single demand signal. That way, when there’s a change in demand, someone is automatically prompted to act.

The necessary trust to enable these connections is still too rare. Do you — and your partners — have what it takes? — Tom Andel

Marines and Cancer Society Win WMS Awards

At Penton Media’s 2001 Supply Chain Expo, Material Handling Management magazine honored the U.S. Marine Corps and American Cancer Society for excelling at warehouse management system (WMS) implementation.

MHM’s Excellence in WMS awards are predicated on the fact that a successful WMS project starts with disciplined operations. Add to that management and communication skills required to get a WMS project off the ground, and it becomes clear that achieving excellence in WMS implementation is a major feat.

U.S. Marine Corps

Responding to a directive given by the Secretary of Defense to reduce labor and inventory levels and improve customer service, the U.S. Marine Corps developed a strategic master plan for warehouse modernization. A WMS was at its core. The government off-the-shelf (GOTS) package, called STRATIS, reduced labor costs, synchronized control of horizontal carousels, increased inventory accuracy, provided on-hand balances by location, and reduced order ship times to customer units. The system will eventually be in place at all intermediate-level distribution centers serving operating forces.

American Cancer Society

In the non-profit sector, the American Cancer Society revamped its material handling and distribution operations to cut costs and provide new revenue sources. The organization transformed its decentralized, manual processes into a world-class automated, centralized fulfillment system. Orders for brochures, posters and pamphlets from 3,400 field units now come in online. The Society’s new operation can deliver thousands of orders within three days. The WMS helped the organization improve output by 300 percent. The system achieved payback in two months and saved $8 million in the first year.

Siemens Acquires Rapistan

Siemens, the international electronics and electrical engineering company, has completed its acquisition of Mannesmann Dematic and its subsidiary Rapistan Systems, and formed a new company, Siemens Dematic. The new company merges Mannesmann Dematic and Rapistan with Siemens Production and Logistics Group to become one of the world’s larger suppliers of material handling and logistics automation systems.

The combined companies have annual sales of $4.2 billion with approximately 21,000 employees. The former Rapistan Systems organization becomes part of the Material Handling Automation Division of Siemens Dematic. Ken Ruehrdanz, manager of marketing, says the things that made Rapistan a leading material handling system provider are only made better by this move.

“This is a new, bold beginning,” he told MHM, “and it’s a testament to the strength of our organization that the Material Handling Automation Division headquarters for the whole world will remain here, in Grand Rapids, Michigan.”

Pete Metros, formerly president of Rapistan Systems, stays on as managing director of the Material Handling Automation Division. Metros also sits on the board of directors of the new company.

The other divisions of Siemens Dematic include: Postal Automation, Electronics Assembly Systems, Cranes & Hoists, and Mobile Cranes.

What Works — What Doesn’t

In a free-ranging discussion over three days in Columbus, Ohio, members of the ASRS-AGVS Users’ Association openly discussed what was working and what was not working within their technologies. The conference also included carousel users and equipment vendors.

At times the conference seemed more like a swap meet as engineers using equipment installed in the early 1980s sought out others with similar products no longer manufactured. Others freely offered advice on how they solved similar problems.

A lot of discussion revolved around the general topic of orderpicking automation technologies. General consensus seemed to be that, given the downturn in the economy and the proliferation of used equipment on the market, retrofitting or remissioning might be a smart choice. The flip side of using previously owned equipment, as others pointed out, was maintenance.

Maintaining efficiency on systems 15 years old is possible. Abbot/Ross Products hosted a tour of its warehouse where it maintains an uptime rate of about 98 percent, thus proving the point of what can be done with the right personnel and equipment. The warehouse features eight AS/RS and 16 AGVs for case picking, loading and shipping. Attendees also had a tour of the Kraft Mixing Center, opened in 1998 in nearby Groveport, to see high-density dynamic storage in a refrigerated environment.

Another presentation, by Michael Lane, president, WAGO, gave attendees a good look at how a system can be remissioned with the help of its original vendor — in this case, HK Systems. You can read the full text of this story in Material Handling Management’s September 2000 issue.

We’re Good!

Since you won’t be able to read about it anyplace else, the staff of Material Handling Management has to do a little self-promotion. On the national level of the American Society of Business Publication Editors awards competition, we’re particularly proud to announce that Christopher Trunk, managing editor, won a gold award for editorial excellence for his entry in the technical writing category, and Bernie Knill, contributing editor, received a silver award for his contributed compliance column.

At the Central Region, American Society of Business Publication Editors awards competition, we garnered no fewer than 10 awards. Tom Andel, editor, received a gold award in the case history category and a bronze award in signed editorial.

Clyde Witt, executive editor, received the silver award in case history.

Leslie Langnau, senior technical editor, walked away with a gold award in the category for regular column, staff written.

Christopher Trunk, managing editor, almost needed a pickup truck to carry his awards home. He received a bronze award in case history, and a bronze and gold in the technical writing category.

Bernie Knill, contributing editor, received the gold award for his regularly contributed compliance column.

Earlier this year, Andel’s signed editorial was honored as one of three finalists in the prestigious Jesse M. Neal Award competition, sponsored by American Business Media.

Congratulations to all! Now, back to work.

Georgia Duck-Enerka Launches Special Web Site

Georgia Duck-Enerka, a manufacturer of conveyor belt technology, recently launched its newest Web site ( that includes a comprehensive technical library.

The site offers the latest technical information on conveyor belts, conveyor problem-solving techniques and the company’s conveyor belt products.

Lee Brammer, director of marketing, said, “Our site couples almost a century of conveyor belt manufacturing experience with 21st century technologies to provide our customers with ready access to one of the most comprehensive technical libraries available.”

Managers on the Move

Tadashi Sotoike has been appointed president of Mitsubishi Caterpillar Forklift America Inc. He has been an executive within Mitsubishi Heavy Industries for more than 30 years.

Brian Butler has been hired as vice president of sales and marketing at Clark.

Southeastern Freight Lines has announced the retirement of Paul Taylor and the appointment of Tobin Cassels as president.

Exel, provider of supply chain solutions, has announced the appointment of Fred Takavitz to president, technology worldwide.

David W. Grainger has been named WalkAbout Computers Inc.’s chief executive officer. The company also named Leo Shpiz to the post of director of product management.

FKI Logistex announces the appointment of John Pelka as vice president of sales and marketing. Pelka succeeds John Westendorf, who has accepted a position as CEO of FKI Logistex Automation Division, headquartered in Cincinnati, Ohio.

Teklynx International, developer of automatic identification and data collection (AIDC) software products, has appointed Brad Cameron vice president of North America Sales.

Diamond Phoenix has named Stephen K. Small product manager for DirectPick, the company’s light-directed picking system.

Ranpak Corporation, manufacturer of in-the-box packaging systems and products, has named James M. Woodman manager of its Kent, Washington, plant.

Association News

The Institute of Packaging Professionals (IoPP) executive director, Bill Pflaum, will step down this fall from the position he has held since the merger of two packaging organizations that formed IoPP in 1989. Previous to that, Pflaum was executive director of the Society of Packaging Professionals for 10 years. A new director has not yet been selected.

The Warehousing Education and Research Council has elected A