Meet Challenges Head On
While the Annual Conference of the Council of Logistics Management didn’t set any attendance records in 2001, it raised many serious issues that will face the profession in the years to come. Logistics had a shining moment during one of America’s darkest hours as logisticians moved quickly to support rescue and recovery efforts in the wake of the September 11 terrorist attacks. They were further challenged to respond to disruptions in their own supply chains. With many of those efforts still evolving, you might have expected the Council of Logistics Management Annual Conference to be a disaster. CLM stuck to its schedule and cranked up the machinery for a powerhouse conference less than three weeks after the attacks. While there’s no doubt attendance suffered, it was clear that many logisticians were looking beyond the pain of the moment to prepare their companies to survive the dual effects of a slowing economy and the public mood following the attacks.
A transportation panel of motor carriers and rail found much to agree on. Despite world events and economic pressures, Yellow Corporation Chairman William D. Zollars said shipper and consignee expectations are continuing to rise, translating into more, better and faster.
Technology requirements are continuing to increase for carriers, requiring that more real-time information be available via the Internet to customers at every level, including the customer’s customer.
As noted by the transportation CEOs, outsourcing is on the rise. Surveys of major manufacturers and CEOs of leading third-party logistics companies indicated continued growth for the third-party sector. Most companies surveyed reported they would increase their use of third-party logistics in the near term. The dominant areas for third parties were transportation management and distribution management. The studies, reported by Northeastern University and Accenture, indicate continued growth in functions that have been commonly outsourced: transportation, warehouse management, shipment consolidation, freight payment, and tracking and tracing. It also showed significant increases in plans to outsource some global functions such as freight forwarding and customs brokerage.
Before you can develop a successful global logistics strategy, you must understand all the tactical and operational issues involved in your international transactions, cautioned Stephen Gould. To do this, break down your international transactions into basic components, compile all relevant information and plan accordingly.
There are five phases of international transactions, according to Gould: planning, sourcing, export, import, domestic delivery. Information flows are integral to moving the goods and the cash.
— Transportation and Distribution staff report
Schaeff, Terex Ink Deal
The Schaeff Group has signed a combination agreement with the American TEREX Group. Subject to the consent of antitrust authorities, TEREX will take over all shares that the Schaeff family holds in the Schaeff Group. In return, the Schaeff family will take a participating interest in the TEREX Group and become one of the larger shareholders of this company. The independence of the brand names “Schaeff” and “Fuchs” is not affected by the deal.
TEREX, established in Connecticut, is a strongly diversified company that primarily manufactures equipment for the mining industry and construction industry. With approximately 6,500 employees, TEREX had a turnover in the year 2000 of more than $2 billion. Simultaneously with the assumption of the Schaeff shares, TEREX has also taken over Atlas Weyhausen, the well-known German manufacturer of hydraulic excavators and truck-mounted construction cranes located in Delmenhorst. Atlas Weyhausen produces mobile excavators with capacities of more than 11 metric tons and truck-mounted construction cranes. Schaeff, with approximately 1,600 employees, builds compact machines of up to 11 metric tons, rehandling equipment up to 65 metric tons and special tunneling equipment.
Control Systems Crucial to Supply Chain Visibility
North American shipments of material handling control systems (MHCS) software and services reached nearly $494 million in 2001. This market is expected to grow at a compounded annual growth rate of more than 13 percent over the next five years, according to a newly released ARC Advisory Group study, Material Handling Control Systems for North America Outlook.
A MHCS solution provides a uniform interface to a broad range of material handling equipment that reduces operator training time, maintenance costs, and transportation time of individual goods. MHCS solutions are found in material handling systems for manufacturing plants, distribution centers, warehouses and parcel handling centers. Managing the equipment in these facilities requires relatively sophisticated software that is capable of communicating directly to conveyors, sortation equipment, AGV, ASRS and robots. Further information on this study can be found at www.arcweb.com/arcweb/Advisory/Studies/EBus/mhcs.asp.
Pallet Tracking Leads RFID Applications
At Frontline Solutions Expo, much was said about radio frequency identification (RFID), but CHEP’s asset management system showed the most promise for widespread benefits on a global basis.
Most people think of CHEP as a company that pools pallets and containers internationally. At Frontline, however, CHEP announced a contract with Savi Technology Inc. for asset management software and a SmartChain real-time data collection software platform that transforms the company’s business. SmartChain integrates with any type of automatic identification equipment — GPS, RFID, bar code readers, hand-held scanners, even manual data entry software. “We have a software platform that basically scrubs all the data coming in from the physical infrastructure and turns that into information,” says Keith Dierkx, vice president, strategic markets, Savi Technology. “Then asset management provides information about the full life cycle of the product, including its acquisition, the depreciation schedule, maintenance problems and the inventory carrying costs. The software asks: ‘Which of the supply chain partners needs what information?’
“We provide through the configurability of this software the ability to give the appropriate information to the appropriate company in the supply chain,” Dierkx says.
Savi also announced the open licensing of its Universal Data Appliance Protocol (UDAP), which already has eight partners that supply a full range of automatic data collection products and services. UDAP provides a common interface that links information from wireless data collection technologies to Savi’s Web-based software platform.
For CHEP, asset management capability is more than an exercise in the application of automatic identification. “CHEP is able to manage its entire asset base, its asset management capability, well enough to justify the investment in both the software and the physical infrastructure,” says Dierkx.
By reducing internal costs and managing its inventory of pallets and containers, CHEP is able to produce a return on investment (ROI) that allows the company to address the needs of customers. “CHEP will be using the information it collects to learn what is of value, what the customers want and what things matter to CHEP — all by reducing its internal set of costs,” says Dierkx. CHEP is installing the asset management software for all its customers to manage the pool of 150 million pallets.
— Bernie Knill
Biss, Porad Honored by AIM
AIM Inc., the global trade association recognized as the worldwide authority on automatic identification and data collection (AIDC) and networking in a mobile environment, has awarded its highest honor, the Richard R. Dilling Award, to Charles “Chuck” Biss, vice president, Hand Held Products Inc. The award, named for an industry pioneer and former AIM vice president, recognizes outstanding career-long contributors who have helped advance AIDC technologies in multiple industries.
Biss is internationally renowned for his support of standardization work and has served as a representative to several national and international AIDC standards bodies such as AIM, the Uniform Code Council (UCC), ANSI, ISO, AIAG and EAN.
AIM, along with SCAN: The Data Capture Report, the management and marketing newsletter of automatic data capture, also honored Kenneth D. Porad with the Don Percival Award.
The award was established to honor Don Percival, an early founder and pioneer in the development of bar code scanning. Since 1982, this award has been presented to an individual or organization from the user community in recognition of outstanding contributions to the application of AIDC technologies.
“Ken Porad has demonstrated his commitment and dedication to the advancement of AIDC technologies at the Boeing Company. He recognizes the value of AIDC technology to the aerospace industry, and, as such, has been a leader in the continuing development of industry standards,” says Larry Roberts, CEO of AIM Inc.
Porad is the Boeing program manager for the Permanent Bar Code Identification Program and is responsible for planning, organizing and controlling the implementation of permanent bar codes on parts within the Boeing Commercial Airlines Group. He is also the Boeing engineering representative to the Air Transport Association’s task force, which developed the aerospace industry standard for permanent bar codes contained in SPEC 2000.
Future Looks Bright Ahead
While the CFOs of 300 middle-market manufacturers are part of a growing chorus of observers who believe the U.S. economy is in recession, they are confident that the economy will recover by the third quarter of 2002, according to Fleet Capital Corporation’s annual Middle-Market Survey.
Barring another terrorist attack on the United States, an overwhelming majority (92 percent) of respondents believe the U.S. economy will emerge from recession by the end of 2002, with 40 percent expecting the emergence to occur in the second quarter, and 29 percent in the third quarter. Eleven percent of CFOs believe the national economy is going to emerge from recession in the first quarter, while 12 percent say it will happen in the fourth quarter of 2002. These findings closely mirror respondents’ beliefs about recovery for the long-beleaguered manufacturing sector as well.
When asked how they perceive the current condition of the U.S. economy, not surprisingly, CFOs rated it as only “fair,” giving it an average score of 58 on an economic scale ranging from 0 (extremely weak) to 100 (extremely strong). In comparison, the health of the U.S. economy in November 2000 was given an average score of 81, according to last year’s survey.
The confidence of respondents in an economic turnaround is bolstered by recent monetary policy, as 83 percent indicated that the Federal Reserve’s recent interest rate cuts have benefited the national economy.
Report on Safety, Maintenance Costs
Steel King Industries has released Technical Report #4, detailing the effect of column shape on side damage resistance to pallet racks. The report studies the ability to withstand side impacts of closed tubular column shape versus conventional open-back, roll-formed upright columns. Phone (715) 341-3120 and ask for SK2000 Technical Report.
Real-Time Processing for WMS
Order processing software abounded at Frontline Solutions Expo, but there was little in the way of real-time interfaces with material handling equipment. One such product was EasyPick OPS from FKI Logistex — Real Time Solutions. As Tom Lagaly, vice president, Real Time Solutions, explains, “We developed a middleware package that the company has used over the years and that allows us to interface with a host of homegrown warehouse management systems [WMS] — or, as some call them, host legacy systems.”
These systems provide enough information to allow the company to operate and “they’re happy with what they have,” Lagaly says.
“So what that meant to us was that we had to have some means of talking to a variety of host computers or homegrown WMS. Long ago we developed the ability to interface with them and also different picking technologies,” Lagaly says.
— Bernie Knill