With an economic rebound less robust than anticipated and greater pressure to enhance shareholder value, companies see collaborating with suppliers and customers as an opportunity to increase top-line growth and reduce costs, according to research released by Accenture.
The research was based on a survey of 150 senior executives at Fortune 1000 companies in the manufacturing, high-tech, transportation, finance, insurance and utility industries. Participants were asked a variety of questions about collaboration with supply chain partners, including the benefits of collaboration, barriers to collaboration and key areas for collaboration.
Fifty-four percent of the survey respondents indicated that developing collaborative relationships in demand and supply planning with their customers and suppliers was very important, compared with less then 10 percent who said that such collaboration was not important.
“That the survey confirms a strong emphasis on collaboration, which entails sharing detailed information with suppliers and customers, shouldn’t be surprising,” says John Matchette, a partner in Accenture’s supply chain practice. “During an economic downturn, successful companies focus on collaboration because it enables them to improve visibility and transparency in their supply chains, which helps increase efficiencies and ultimately reduce costs.”
When asked what one area of collaboration creates or could create the greatest value for their business, the respondents were split between collaborative product design (26 percent), joint sales planning (23 percent) and production planning (21 percent).
Uncle Sam Needs You
In December, five million American businesses will receive their 2002 Economic Census forms. This includes 200,000 businesses in the manufacturing sector. Your response is so important that it is required by law. The forms are due February 12, 2003.
Every five years the Economic Census develops a comprehensive portrait of the American economy from the national to the local level. It updates economic indicators like Gross Domestic Product and provides invaluable business facts you’ll need to plan for years to come.
Be sure to complete and return your forms as soon as possible. For more information about the Economic Census, visit census.gov/econ2002.
What You Should Expect from an LES
What’s the return on investment from a logistics execution system? Depends on you. Some users get a quick ROI from a plain vanilla, four-walls warehouse management system (WMS). Others achieved those efficiencies years ago and are ready to scale their walls and connect to supply chain partners to share data on inventory flows — over the road, in the yard and throughout their distribution center network.
A variety of logistics practitioners, falling somewhere in between these two benchmarks, gathered in Memphis to prepare for their next strategic logistics investment. The Logistics Execution System Association (LESA) product section of the Material Handling Industry of America (MHIA) recently held one of its regional seminars here. In addition to tabletop displays by some of the LES world’s leading players, industry experts joined in break-out sessions and a panel discussion that opened the floor for a wide-ranging discussion on LES implementation.
Most of the attendees had not yet embarked on their first LES project and were eager to learn the positives and pitfalls.
In his keynote presentation, John Hill, principal of Esync International, mapped the flow of data and product in a typical LES implementation:
“I want the information from point-of-sale to feed into supply planning systems, enabling me to adjust my manufacturing schedule to customer demand,” he explained. “Ultimately that activity at the point-of-sale will create customer orders. Those orders will flow into an advanced order management system that, automatically over the Internet or through a customer service person, provides visibility into the availability of inventory throughout the supply chain. If a customer calls and wants to order 10 widgets, the system will automatically find the closest source of inventory to fulfill that order. That order will then flow into a transportation management system. The TMS will figure out which mode of transportation provides the most cost-effective means to deliver that order to that customer on the date promised. Next, the order flows into a WMS, which manages the inventory at the ship-from location and knows precisely where in that warehouse or distribution center to find that inventory. It also knows when the order has to be dropped in order to be picked and consolidated for pickup by the carrier. Once the order is shipped, I want the TMS to monitor it in transit and collect a proof of delivery before we close the loop on that order.”
A panel discussion, that MHM had the honor to moderate, discussed the capabilities that an LES should have. To get the Q&A highlights, visit our Web site at totalsupplychain.com. If you’d like to attend one of LESA’s regional seminars, contact MHIA’s Mike Ogle at (704) 676-1190 to get a schedule.
Note to logistics associations: If you or your regional affiliates would like to partner with LESA to present a Logistics Execution System seminar anywhere in the U.S., e-mail Mike Ogle at [email protected]
— Tom Andel, chief editor
RPCC Gains Tax Exemption
The use of reusable pallets and containers by food processors in Delaware is now exempt from a use tax, according to the Reusable Pallet and Container Coalition (RPCC).
House Bill 286, signed July 9 by Ruth Ann Minner, governor, declares the 1.92 percent use tax on leases of tangible personal property does not apply to reusable pallets and containers used by food processors, including those in the poultry industry. The legislation defines reusable pallets and containers as any pallet or crate that is “under an arrangement for the repeated return of such property to its initial purchaser for long-term reuse.”
The RPCC’s legislative action committee, working with the American Plastics Council, helped drive the initiative. The RPCC already has achieved similar tax relief in Florida and California.
“The tax relief is a recognition by the state of the value of reusables,” says Ken Smith, RPCC president. “Reusables already offer businesses cost savings, productivity, and solid-waste reduction.”
The RPCC advocates the use of reusable pallets and containers as a way to reduce the volume of the waste stream and improve the system-wide productivity of industries employing these products and services. The RPCC advocates this growth through legislative and regulatory actions, strategic alliances, standards, guidelines and best practices, and education and public awareness.
Managers Making News
Columbus McKinnon, manufacturer of hoist and chain products, has announced that Gary Sliwinski, territory manager based in Denver, was presented the third annual Gary Eckley Award. The award, named for the long-time plant manager of the corporation’s Midland Forge facility, recognizes the individual that shows extra initiative in growing this portion of the company’s product line.
Escort Memory Systems announced a change in the leadership of the company. Luciano Mattioli, a 28-year veteran of Datalogic, takes over as president and CEO, replacing Mark Nicholson.
Patrick L. Reed has been named president and CEO of FedEx Freight East. He replaces Thomas R. Garrison, who retired. Keith Lovetro has been named president and CEO of FedEx Freight West. He replaces Tilton G. Gore, who also retired.
WorldChain, developer of multi-enterprise supply chain execution solutions, announced the addition of Mark Cosway, senior vice president of sales, and David McLain, vice president of business consulting.
Bosch Rexroth has appointed Kenneth Traub national accounts manager for Bosch facilities.
Vikram Verma, co-founder, president and chief executive officer of Savi Technology, was named by the World Economic Forum as one of 40 Technology Pioneers. Verma is involved in ongoing dialogues with world economic leaders on a variety of far-reaching issues affecting business and society, such as how innovative technologies can improve the global community by transforming the way business and society operate.
TNT Logistics North America has promoted Mark Johnson to the position of vice president, quality and development; Dave Souza to corporate controller, and Tom Blount to vice president and GM of Michelin operations.
Interroll Corporation has appointed industry veteran Jess Lafollette to operations manager of its U.S. manufacturing headquarters, and Ken Bobick to global DC product manager.
Logistics Management Solutions, a third-party logistics provider, has added Mary Shaw to its staff as national sales manager.
World Market for Material Handling
The world market for material handling equipment and systems is projected to increase 6.2 percent per year through 2006 to $108 billion (including price increases). This will represent a significant recovery from the sluggish early 2000s performance that was impacted by the global economic slowdown. The principal factor fueling gains will be improved conditions in the world economy, which will result in accelerating demand for goods and create opportunities for suppliers of goods-handling products and services of all types. These and other trends are presented in World Material Handling, a new study from the Freedonia Group Inc., a Cleveland-based industrial market research firm.
The effects of economic recovery on world material handling markets will be broad-based from a geographic perspective. The most direct beneficiaries will be the mature, cyclical markets of the industrialized nations (the U.S., Canada, Western Europe and developed Asia/Pacific), many of which have been in recession during the early 2000s. In addition, developing countries will see firming commodity prices and rising global demand for electrical/electronic products, consumer durables and other items that tend to be widely exported from such countries.
The fastest per-annum growth is expected in the Asia/Pacific region, where numerous countries are undergoing rapid industrialization — including expansion of local trade/distribution infrastructures — and where demand has been suppressed since the regional financial crisis of 1997-1998. Eastern Europe will also register above-average growth in material handling demand, as markets for consumer and business products continue to expand with successful economic transition.
Holding particularly good prospects — especially within the developed world — will be advanced/automated material handling products such as robots and automatic guided vehicles (AGVs), as well as software and high-end services like systems design and project management. These types of products and services can enhance the productivity of the material handling function, and are amenable to integration into larger-scale factory automation and automated warehouse-type environments. Growth in demand for conventional material handling products — industrial trucks and lifts, conveyors, hoists, cranes and the like — will also improve from recent sluggishness. Developing countries that are exhibiting rapid industrialization will register healthy demand for most types of material handling equipment and systems, both conventional and advanced.
Information about World Material Handling (published 10/2002, 395 pages) can be obtained from the Freedonia Group Inc., www.freedoniagroup.com.
CLM Elects Officers
Thomas W. Speh, associate dean for academic affairs, Miami University of Ohio, has been named president of the Council of Logistics Management. Speh has chaired the association’s education strategies committee since 1998 and served in other offices of the organization. He teaches logistics management and supply chain management.
The council has also elected Elijah Ray, senior vice president customer solutions, Standard Corporation Integrated Logistics, to the office of first vice president.
NEMA Indexes Show Business Improvement
The NEMA Primary Industrial Control Index and the Primary Industrial Control and Adjustable Speed Drives Index, for the third quarter of 2002, improved slightly over the same quarter a year ago, according to data collected by the Industrial Automation Control Products and Systems Section of the National Electrical Manufacturers Association (NEMA).
“Even as they improved relative to last year,” says NEMA’s Steve Wilcox, director, economics, “in both cases the indexes actually lost some ground compared to the second quarter of 2002, which serves to highlight the rapid declines these industries experienced throughout 2001.”
The Primary Industrial Control Index value represents a 3.5 percent decline between the second and third quarters of 2002 but translates into a razor-thin 0.4 percent growth over third-quarter 2001. Compared to the second quarter of 2002, the Primary Industrial Control and Adjustable Speed Drives Index dipped just 0.6 percent. The third-quarter 2002 index posted a solid 3.3 percent gain over the same period last year. Strength in the adjustable speed drive component clearly boosted this measure relative to the primary industrial control index.
MHEF Announces 2002 Awards
The Material Handling Education Foundation’s (MHEF) board of directors has announced two of the most prestigious awards in material handling. The Norman L. Cahners Award for 2002 was presented to The College and Industry Council on Material Handling Education (CIC-MHE) for its leadership and support of the activities of both the MHIA Product Sections and Council and the Material Handling Education Foundation.
Since this annual award was established in 1990, it has, primarily, been presented to individuals to mark their support of material handling education and the foundation. In presenting the award to CIC-MHE, J. Sherman McLaughlin, president of the Material Handling Education Foundation’s board and emeritus general counsel for MHIA, said, “CIC-MHE has worked closely with MHIA on developing educational material and preparing students for careers in material handling.”
The Reed-Apple Award, named for material handling education pioneers Jim Apple Sr. and Rudy Reed, went to Robert J. Graves, professor at Rensselaer Polytechnic Institute. This honor recognizes Dr. Graves’ contribution over the last 20 years to “the science behind what we now teach about material handling in this country.” Dr. Graves’ current research interests are in design and control of manufacturing systems and concurrent engineering of product design and process design. Dr. Graves is the director of the Electronics Agile Manufacturing Research Institute and a former president of the College Industry Council on Material Handling Education and past member of the Foundation’s Board of Directors.
IWLA Moves Its Headquarters
The International Warehouse Logistics Association (IWLA) has moved from Park Ridge, Illinois, to neighboring Des Plaines, a suburb of Chicago. The new headquarters will provide greater efficiency and further enable the association to serve its members.
Need a Job? Need an Employee?
An interesting program called the Supply Chain Industry Career Board is being sponsored by HK Systems and irista.
Developed to provide a free and simple catalyst to connect employers seeking specialized professionals and individuals seeking career opportunities, the Supply Chain Industry Career Board provides qualified opportunities for professionals in the areas of engineering, operations, information technology, management, technical assistance, consulting and project management.
A direct link to the Web site is http://184.108.40.206/careers/index.cfm. You can also get there by going to www.hksystems.com.
Bonus for Your Automation Project
The economic stimulus law signed by President George W. Bush in March can help you reduce your tax liability for this year and improve your cash flow. In March, the president signed the Job Creation and Worker Assistance Act into law. It allows buyers of new equipment to depreciate an extra 30 percent of the cost of new equipment for the tax year in which it’s placed in service.
Visit depreciationbonus.org to understand what the depreciation bonus means for your company and how best to use it. The site will also give you access to A Depreciation Bonus brochure, prepared by the Associated Equipment Distributors and the Association of Equipment Manufacturers for equipment purchasers; Web site aednet.org/government.
Companies Making News
Cambar Software Inc. announced that it has been acquired by Supply Chain Holdings LLC, a Southeast investment firm, for an undisclosed amount.
Swisslog has established a global agreement with Zebra Technologies in which Swisslog will offer and sell Zebra printers integrated with its warehouse management software product, WarehouseManager.
Catalyst International Inc., a global provider of supply chain execution solutions, announced it has signed a letter of intent to acquire Philadelphia area-based Catalyst Consulting Services Inc., an independent provider of consulting, implementation and support services for the SAP Logistics execution system.
Printronix Inc., manufacturer of integrated enterprise printing solutions for the supply chain, announced a strategic alliance with Symbol Technologies Inc., maker of mobile information management systems. Under the terms of the agreement, Symbol will market and sell worldwide the TPS5000, a Symbol-branded wireless-enabled industrial thermal bar code printer line manufactured by Printronix.