Skip navigation
robot-with-drone.jpg Getty Images

More Supply Chain than You Can Imagine

Are you ready for what’s coming next in the supply chain? MH&L’s Editorial Advisory Board will help you prepare for the future.

Imagine if you had the chance to sit down with six of the supply chain field’s best and brightest thinkers, and got to pick their brains about the future of the industry? What can expect from disruptive technologies like warehouse drones, exoskeletons, delivery apps, and self-driving trucks? Where will we find the talent to replace all the soon-to-be-retiring Baby Boomers? How will we be able to satisfy the constant, 24/7/365, “I need it now, not later this afternoon” mentality driving the supply chain into so many different directions at once?

Well, you don’t have to imagine it because that’s exactly what you’re about to read—the collected thoughts and predictions of members of the MH&L Editorial Advisory Board. With each of them experts in different areas of the supply chain, you’ve got the opportunity to catch a glimpse of what the future of logistics and material handling will look like, as seen through the eyes of practitioners, developers, pundits, academicians and entrepreneurs. Grab a seat and learn what these supply chain visionaries envision for the next phase of the industry’s evolution.


Jim Tompkins.jpg

James A. Tompkins, PhD

Chairman and CEO

Tompkins International | MonarchFx

 

The Need For Speed: “When You Want It” Delivery

As we continue to evolve into an instant gratification society, being able to exceed the customer’s expectations is becoming more and more difficult. Reaching your customer when they want it, as they want it, continues to strain traditional supply chains. It is easy to do slow and inexpensive delivery or quick and expensive delivery. The only way to do quick and inexpensive delivery is to deploy inventory via distributed logistics and manage the inventory flow as opposed to managing the inventory storage.

Omni-channel Distribution

When we look at the progress brands and retailers have made regarding omni-channel distribution, we can point to many accomplishments. Brands and retailers have realized the need to address the demands of both in-store retail and their website volumes from a common inventory pool that can be deployed in pallets, cases and “eaches.” For the most part companies now have the systems, inventory management and warehousing capabilities to ship “eaches,” but the efficiency with which they do so is still lacking.

These inefficiencies stem from challenges inherent in two most popular approaches. If fulfilling from their traditional distribution centers, there is a lack of automation in place required to streamline the “each” processes. Continuing to depend on direct labor to deliver these very manual tasks drives up costs and increases the difficult task of hiring enough labor, especially during peak periods. If fulfilling from stores, the ability to scale in a small backroom and to do so in accordance with defined quality standards and processes continues to be difficult. Additional challenges are distraction from the front-of-store customer experience and compensation issues for store personnel supporting website activities.

Where the biggest disconnect comes is in a company’s ability to address the omni-channel world in the increasing number of channels that must be supported. We no longer live in a store-and-website-only environment. With the addition of marketplaces, social, commerce-enabled search and other emerging channels, the fulfillment issue only becomes more complex and comprehensive.

The reality today is customers shop everywhere and so companies must sell everywhere. Selling everywhere requires the management of the catalog, inventory, pricing, order and fulfillment. To do this efficiently and effectively requires a broad robust management of the end-to-end supply chain and the end-to-end client journey.

Metrics: How to Measure the Success of Your Operations

In the age of digital disruption, companies fall into two categories: those that are actively going through a business reinvention, and those that are dying. In this environment, the prevailing view on benchmarking is that it has become something that is somewhere between “optional” and “pointless.” But nothing could be further from the truth.

While traditional, backward-looking, “rate and rank” benchmarking is marginalized by the speed and scope of change, the need for process benchmarking—the identification of global best practices and adapting them to a different product or industry—is more important than ever. These ideas are the potential disruptors that each company must either defend against or adapt in order to gain competitive advantage and create a disruption of their very own. So, while the information isn’t as easily comparable as a traditional metric like Units per Hour or Cost per Unit, because the source can be from non-competing industries, interested parties may find like-minded individuals more open to sharing than a traditional, competitive benchmarking endeavor. Benchmarking becomes less about continuous improvement and, instead, becomes the source for ongoing, transformational change.

Robots/Automation

Robotics are an in-demand form of automation due to their versatility, affordability and efficiency. Their applications span across the entire supply chain to include key areas like storage, picking, transport, packing, sorting and other process flows. Distribution centers can now have significant amounts of automation, facilitated by a skilled workforce.

Optimal distribution performance is achieved through a fully integrated warehouse.

Robotic technology can work in collaboration with warehouse software, such as WMS, WES and WCS. The range of automated storage and retrieval, autonomous transport, robotic pick & place, and sortation robots can also be integrated to create a seamless warehouse operation. Inbound and outbound flows, unit and case/carton processes, order fulfillment, store replenishment, cross-dock and other key applications are all in place or possible in the future.


Roger Bostelman.jpg

Roger Bostelman, PhD

Research Associate

National Institute of Standards and Technology | The University of Maryland

 

Exoskeletons in Material Handling

Workers-in-wearable assist devices, or exoskeletons, are performing material handling and other manufacturing tasks. Exoskeletons are rapidly being developed around the world, allowing people to remain in their material handling, fabrication and assembly jobs with less shoulder, back, leg and other pains.

At NIST we hear that workers in auto manufacturing, warehousing, retail stores and the military, along with medical patients who suffered strokes or other debilitating issues, are all benefiting from exoskeletons. These devices are passive (un-powered) and/or active (powered/computer-controlled) and many are already off-the-shelf items proving their potential to the workforce and others in industrial, medical, military, response, and even recreation applications.

What’s missing are the many safety and performance standards that are now being developed through ASTM Committee F48 on Exoskeletons and Exosuits with liaison to ISO and IEC standards bodies too. Exoskeletons are now defined through ASTM F48.91 as a “wearable device that augments, enables, assists, and/or enhances physical activity through mechanical interaction with the body” where an exoskeleton may include rigid and/or soft components and physical activity may be static or dynamic. The definition is meant to be broad but describes the exact mechanisms being used to support the material handling industry.

The National Institute of Standards and Technology has a Mobility Performance of Robotic Systems Project encompassing, not only automatic-through-autonomous vehicle research, but also measurement science and test method development for exoskeletons used in industrial environments. In fact, load handling and environmental conditions standards are now being developed within ASTM F48.03.

Bottom line: We’re defining and demonstrating the tests that provide exoskeleton manufacturers and users the needed information about exoskeleton safety and performance. ASTM F48, which began in late 2017, already includes over 140 members from around the world who are defining similar standards for ergonomics, design, application specifics, environmental use, task performance, and of course, terminology among other areas for exoskeletons. For more information and a video, visit: https://www.astm.org/COMMITTEE/F48.


Ron Giuntini.jpg

Ron Giuntini

Principal, Giuntini & Company Inc.

Founder, G35 Software

 

Who Will Own, Maintain and Modify the Disruptive Supply Chain Tech?

The legacy business model of logistics enterprises is being rapidly revised as a slew of technologies are changing virtually every process they perform—from material handling, to picking, to inventory control, to transporting goods, and so much more. As a result, logistics enterprises are rethinking how they employ these technologies on both a financial and operational basis. Several of these evolving technologies are rapidly changing the business models of logistics enterprises.

For most of these technologies, the OEM’s cost of sales is a minority of the selling price; in other words, R&D and firmware are the majority of the value of these machines. OEMs, in order to assure that machines continually deliver value to the marketplace, are often not selling their machines but are providing them as-a-service. The OEM maintains ownership; assures, directly or indirectly, the machine’s outcomes through the term of an agreement, engaging their highly-skilled technicians; and modifies their firmware to improve machine capabilities and productivity. As a result, the multi-year fixed-fee service agreements enabling access to the technologies become an operating expense for the buyer.

The financial reporting of such services is an implied operating lease whose future liabilities of payments to the seller are reflected upon their balance sheet. This will change all the legacy financial ratios of logistics enterprises.

Robots

The employment of robots on the warehouse floor is replacing and complementing workers in the storage, picking and packing of orders. The ownership of the firmware embedded in the robot, as well as the software managing the network of robots, is either licensed to the logistics enterprise or is provided as-a-service. An issue to be resolved is who owns the data sets captured by the robot sensors.

Exoskeletons

The employment of exoskeletons is primarily driven by ergonomics related to worker safety. The OEM’s business model will be their retaining ownership and managing a pool of exoskeletons that will be exchanged by workers from one shift to another.

Drones, Big and Small

The smaller, warehouse-focused drones will be utilized for auditing inventory record accuracy (i.e., cycle counting). The drones, their firmware and the software managing the electronic grid of the layout of the warehouse will again be a turnkey service by an OEM or their channel of distribution or a third party integrator.

The larger, small package-delivery drones will be employed to deliver goods the last mile to the customer. Just as with the drones engaged in warehouse operations, the logistics enterprise will depend on others to assure the outcome of a successful delivery to a customer. Note that the Federal Aviation Agency (FAA) will be imposing operational regulations that will require knowledgeable individuals to ensure the adherence to these regulations.

Autonomous Trucks

Access to pools of autonomous truck cabs by logistics enterprises, employed in convoy platoons, will be owned by the suppliers of trucks-as-a-service. The Light Detection and Ranging [LIDAR] system, a key element of the autonomous truck, as well as all the other technologies enabling autonomous driving, will be provided as-a-service to the cab pool operator, who will in turn provide the technology access to the pool of cabs as-a-service. In effect the only asset owned by the logistics enterprise will be the trailer, and even that could be leased. 

On-demand Manufacturing

Logistics enterprises will become, for certain items, the point of manufacturing. OEM-owned additive manufacturing machines will often be located in warehouses; their maintenance, modifications and supply of consumables will be bundled by the OEM as a service-per-unit-of-output. Obviously this technology will have major impacts upon a warehouse footprint required for the storage of inventories, the handling by robots of materials, and much more.

Within the next 10-20 years logistics enterprises will be the center of ever evolving technologies which will dramatically change their business model. Enterprises that do not embrace these technologies will either be absorbed by those leading the charge or will die.


David Sparkman.jpg

David Sparkman

Principal, David Sparkman Consulting

Founding Editor, ACWI Advance

 

Regulatory Landscape

Sometimes it’s no fun being right.

In an earlier stab at forecasting what would happen this year, I strongly suggested that the making of new labor and employment laws and regulations would largely shift from the federal level to the states. It turns out that I should have asserted that argument more strongly given the undeniable revolution that has taken place at the state, and sometimes city, levels.

With Congress split between a Democrat-controlled House of Representatives and Republican Senate following the 2018 elections, legislative deadlock should be no surprise. After a slow start naming nominees and getting them confirmed by the Senate, President Trump finally put people in place to take the reins at federal agencies and commissions who could then start dialing back the sometimes highly radical changes made during the Obama Administration.

The problem is that most of those changes can be changed back again just as quickly after a Democrat President enters the White House. A few exceptions go beyond simple declarations of changes in policy and enforcement that are being made by creating new regulations through the formal rulemaking process, which can take a year or even longer to implement. The upside is that they will take the same amount of time to undo.

Some states have been stealing a march on national policymakers by imposing radical changes in what they require employers to do and not to do. A familiar pattern is for a Blue state like California (usually), New York, or Illinois to adopt new legislation, which is then imitated by other Blue states that choose to do the same or even go further.

The most recent example is California’s virtual elimination of independent contractor status in that state, which will go into effect next January but will be made retroactive. Companies that had relied on previously-legal independent contractor status now face the prospect of class action lawsuits seeking repayment due under wage and hour laws for employees, as well as for unemployment and workers compensation coverage.

This law severely impacts trucking, which has enjoyed the services of owner-operator drivers since its founding in the early 20th Century. However, it’s no concern for employers using direct sales representatives, like those working for Amway, who are among the odd list of professions exempted by the legislature, along with hairstylists, travel agents, psychologists and graphic designers. Other states—said to include New Jersey—are looking at California’s example with an eye to adopting similar laws that would virtually wipe out independent contractors.

Among the other areas where states like California are pushing the envelope—and sometimes are found by courts to violate federal law in the process—include the rush to pass sexual harassment laws in reaction to the #MeToo scandals. The largest number are a steadily burgeoning list of “ban the box” laws prohibiting pre-employment credit, criminal and salary history checks, and in three states so far, making it illegal for employers to reject applicants because of their hairstyles.

If you are an employer with operations in different states, the lack of uniformity in these laws creates an almost unnavigable compliance minefield. This doesn’t begin to address the mess created by different state laws legalizing medical and recreational marijuana, and prohibiting employers from discriminating against employees who use the drug outside of the workplace.

So, here is my bold prediction for 2020: More employers will need to hire more lawyers to help them manage this growing patchwork quilt of new state and local employment laws. And if businesses continue to remain largely uninvolved in local and state elections, you can expect more of the same in 2021.


Al Will.jpg

Al Will

President, PWB Distribution Solutions

 

Robotics & Automation

Vendor displays earlier this year at ProMat 2019 provided a look at the direction automation is heading in the material handling industry. There’s an exponential expansion of robotics coupled with artificial intelligence (AI) capable of performing warehouse tasks. Many of the tasks performed by robots are designed to free up available labor to handle more intricate tasks in the distribution center.

One vendor offers robots capable of moving orders between pick stations, thereby eliminating the need for the worker to expend labor hours moving between pick stations. A well-known shop floor cleaner manufacturer is now offering a driverless version of their rider floor cleaner using sensors and robotic steering technology to perform operator functions.

Partially driven by the need for accuracy and speed in performance of tasks, the migration to robotics and AI is also driven by the nationwide shortage of workers available to perform necessary tasks.

Talent Gap

A lack of qualified entry-level personnel needed to operate distribution centers continues to plague the industry. Educational institutions, both at the high school and community college levels, are ramping up basic skills training programs designed to meet employers’ requirements for basic warehouse skills and operation of material handling equipment. However, some of the best programs have experienced difficulty in creating interest and enrolling young people in courses. Many young people embrace technology and desire to use it in an occupation. Training courses must appeal to that desire.

The shortage of qualified personnel trend is expected to continue forcing companies to look to alternatives, specifically robotics and AI. These technologies also mitigate the job-hopping, or workforce turnover, the industry is experiencing.

The increasing use of technology in supply chain operations creates new career opportunities for the Millennial generation, specifically in the area of supply chain technicians. Maintenance and repair of highly automated inventory and material handling systems requires a strong STEM background coupled with certification training. Qualified technicians can expect a starting salary of $75,000 or more.

Dimensional Weight Pricing

Shippers need to take a close look at the cost of shipping orders to customers in corrugated boxes much larger than the dimensions of the product placed in the box. A well-known e-commerce auto parts retailer ships many orders in standard sized boxes and in some cases, the product only occupies 20% of the space in the shipping box.

Vendors offering machines cutting right-sized boxes to order are improving the technology’s integration into the packaging and shipping process. These systems are coupled with weighing and cubing equipment to cut a box to the exact size for the item shipped, thereby minimizing void space.

Shippers will no longer need to carry a variety of box sizes in their shipping department nor rely on personnel to make the decision on which box to use for an order. Shippers will experience a substantial reduction in empty space in shipping boxes, ultimately resulting in reduced shipping costs, while their customers have less corrugated to dispose of or recycle.


Tan Miller.jpg

Tan Miller

Director, Global Supply Chain Management Program

Rider University

 

Organizing Your Company’s Metrics

The appropriate metrics to manage and measure the success of a company’s operation vary significantly by industry, by individual company, and by the scale of the business. What does not vary, however, is the universal need of all companies to employ a well-structured, hierarchical framework to organize and manage their metrics.

A hierarchical supply chain performance measurement framework (HPMF) contains three levels: the strategic, tactical and operational. In a HPMF, it is the scale of an operation or activity that a particular metric monitors which determines its place in the hierarchy. Metrics that measure the performance of an entire major functional area such as distribution are considered strategic, while metrics that monitor major sub-functions such as warehouse operations and transportation are categorized as tactical; and finally, metrics that monitor sub-functions of sub-functions (e.g., the receiving operation in a warehouse) are considered operational metrics.

Employing a HPMF provides a unified framework for aggregating performance metrics across a company. This hierarchical approach allows measures to be both “simple” and “meaningful” because each function and sub-function at each level can focus on a few key performance measures.

A hierarchical approach also contributes towards aligning the collective activities of a company to meet a desired mission and set of objectives. Specifically, operational metrics must align upwards to tactical measures, tactical measures must align upwards to strategic measures, and conversely, there must be downward alignment from the strategic to the tactical, and the tactical to the operations levels.

Millennials in the Workforce

I have been teaching and advising supply chain majors at Rider University since 2009, and therefore I have spent a lot of time working with Millennials, and now the first of Generation Z students arriving in college (if one defines Millennials as individuals born between 1981 and 1996).

Overall, I am incredibly impressed with these young people who choose to major in supply chain management, as well as all the other students I interface with in our business school. There is of course a highly diverse set of perspectives, attitudes, backgrounds and life experiences that these students bring to university life. However, I find that the majority of students today are extremely focused on their careers, and exhibit characteristics that allow them to succeed when they move into professional life.

Briefly, what I observe are students who successfully:

● Juggle the demands of classroom and academic work with part-time jobs.

● Participate in extracurricular activities such as supply chain clubs, student government organizations, etc.

● Engage in internships and co-ops in the field of SCM while attending school.

● Seek opportunities to network with supply chain professionals in local professional organizations such as CSCMP and APICS.

As a professor, one can observe how these students become extremely motivated once they have an opportunity to engage with the real world of SCM professionals, and the feedback from employers as students graduate and move into full-time professional careers is overall extremely positive. In summary, I think these engaged young Millennials will contribute greatly to the progression of the field of SCM moving forward.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish