Supply Chain Business Models Evolve

May 1, 2001
Here's a report on the collapse of the independent trading exchange and its impact on business.

Supply Chain Business Models Evolve

No one has found the magic formula for making money through "e" means yet. The most recent business model, independent trading exchanges, is collapsing, according to Mike Edenfield, CEO of Logility, who recently made these comments at the Connections 2001 conference. "Further," he continued, "this business model has been proved not to work primarily because companies don’t necessarily need a middleman that doesn’t contribute some value to the arrangement."

The next attempt at making money out of things e-based will focus on communication, but it will be called collaboration.

You’ll hear about many products and capabilities that focus on collaboration. We mentioned it briefly last month in the article on new channels for creating your material handling systems. Like other developments that move at Internet speed, what last month was an occasional mention is now a flood.

Collaboration is basically about joint development and sharing among business partners. This development and sharing consist of information, schedules, data, demand forecasts, sales leads, and so on. Whether the collaboration model will lead to the business pot of gold is yet to be determined.

However, for the supply chain, collaboration will change business relationships to a peer-to-peer format with an emphasis on customer service. Edenfield predicts that in the current economic climate, these peer-to-peer chains will be working to steal market share from competitor chains. A key way they will accomplish this is through superior customer service. Thus, supply chains will morph into value chain collaborations with a focus on collaborative planning, forecasting and replenishment (CPFR).

In addition, more executives are looking for ways to evaluate the worth of the relationships they form. Andrew White, vice president of product strategy at Logility, spoke about ways to determine and improve the ROI on business relationships. According to White, relationships have a lifecycle. Businesses are turning to a "marriage" model. The crucial point of this model is that a collaboration must be good for both participants. "No more ‘colloboration’ as we’ve seen in some of the early supply chain models where one company dictates the price of goods and services offered by members of the chain," he said.

According to White, the smart material handling executive will bet on customer service over cost reduction, private exchanges over public, collaboration over collusion, and the value chain over the supply chain.

— Leslie Langnau, senior technical editor

FKI Logistex Automation Division Formed

The Buschman Company and Mathews Conveyor, two companies of FKI Logistex, have been formed into the FKI Logistex Automation division. This division will provide end-to-end material handling systems for a broad range of supply chain applications.

Exel Acquires FX Coughlin Group

Exel, a supplier of supply chain management services, has acquired FX Coughlin Group, a supplier of logistics and freight forwarding services to the automotive industry. Coughlin offers national and international freight management. John Allan, CEO, Exel, says this acquisition provides a significant opportunity for Exel to strengthen its presence in the global automotive market.

Conveyor Sales Increase Reported

The Conveyor Equipment Manufacturers Association (CEMA) reported that its January 2001 Booked Orders Index was 215, up 96 points or an increase of 45 percent from December 2000’s index of 119 (1990=100). The January 2001 index represents an increase of three percent from the January 2000 index of 209.

Clark Elects CEO

Clark Material Handling Company has elected Kevin Reardon CEO, replacing Dr. Martin Dorio. Dorio will remain chairman during a brief transition period, then will pursue other opportunities.

For the past three years, Reardon has served as president and managing director of Clark Material Handling Asia. He brings a wealth of related experience to the leadership of the company. He has worked in the dealer network, sales, national accounts and operations.

In addition to Reardon’s appointment, the company also promoted Doug Bennett, COO; Michael Grossman, senior vice president, secretary and general council; and Mike Lee, CFO.

PMMI Adds China Office

The Packaging Machinery Manufacturers Institute (PMMI) has opened an office in Shanghai, China. The office serves as a focal point for services, information and programs to packaging buyers and PMMI members operating in the region. The office was opened through a $400,000 grant from the Department of Commerce’s Market Development Cooperator Program.

Colson Expands Holdings

Colson Casters North America has acquired Shepherd Products’ plastics molding plant in Gallatin, Tennessee. In the future the plant will produce all of Colson’s nylon products including caster wheels and related plastic components. The plant, to be known as Colson Tennessee, joins Colson Monette and Conestogo Plastics to form the Plastics division of the company. Robert Coleman was named president, Colson Plastics.

Schaeff Names New President

John Feeley has been appointed company president at Schaeff Inc. He has been with the Sioux City, Iowa, manufacturer for five years and has led the company’s efforts for improved quality, reduced production costs and expanded market penetration.

Managers on the Move

Sean P. McGowan

has resigned as president and CEO of Catalyst International Inc.

Phoenix Contact Inc. has appointed Michael Nager to industry marketing manager, focusing on material handling and packaging.

Diamond Phoenix has named Mark Pavlovich national sales manager for the company’s line of conveyor products designed for the corrugated industry.

EXE Technologies has named Kenneth J. Powell president and COO. He is a former executive with the Oracle and BroadVision companies.

Neopost Inc., provider of mailing, document handling and logistics systems, has appointed Jean Weber, vice president of technical operations; Tony Kuchta, vice president of sales operations; Steve Pietz, as vice president of marketing, and Barbara Wissler, vice president of Neopost Logistics Systems.

The Executive Board of Mannesmann Rexroth AG in Lohr, Germany, has announced the appointment of Robert L. Rickert as CEO, Rexroth Corporation for the NAFTA region.

EXE Technologies has named Kenneth J. Powell president and COO.

Meier Resigns

After 11 years as secretary general of the Federation Europeene de la Manutention, a European trade association, Dr. Kurt Meier is stepping down. He will be succeeded by Guy van Doorslaer

NWPCA Expands Research Capability

The National Wooden Pallet and Container Association (NWPCA) has hired John Conway as director of research. In the newly created position, Conway will survey member and end user customer needs as well as provide technical support for a number of pending proposed and ongoing research projects.

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