Why?
A simple one-word question is all it takes sometimes to bring about change. Earlier this year, at the CSCMP Europe 2010 Conference, Deborah Lentz, Vice President Customer Service and Logistics, Kraft Foods Europe included the following graphic in her presentation (sourced from “2016 Future Supply Chain,” Capgemini & GCI Global Commerce Initiative):
How many “Why?” questions can you come up with when you study this representation of a typical CPG-retail supply chain?
Ms. Lentz made the case that the time for “walking the talk” on collaboration has finally come, especially when you consider all of the trends and challenges facing the industry: urbanization, shift in global populations, transportation network constraints, sustainability, mobile commerce, government regulations, labor (un)availability, and so forth. Here is what the future network will (needs to) look like:
Several times during her presentation, Ms. Lentz challenged the third-party logistics (3PL) providers in the room: What role will you play in this scenario? She was direct in her warning: If you don’t proactively work towards creating these collaborative networks, we will do it ourselves (i.e., we will work directly with our key suppliers and customers to share warehousing and transportation assets and resources, a path Kraft Foods in Europe was already exploring).
A few weeks ago, I received a call from an executive at a leading 3PL here in the US. It seems that over the past few months several of his clients in the food industry have approached him about creating a shared logistics network. We brainstormed a bit on what would be the first step, concluding that having a workshop with a small group of key stakeholders (manufacturers, carriers, and retailers) would be a good way to define the path forward. I’m not sure if anything has been planned yet, but I hope a first step is taken, whatever it turns out to be.
Asking “Why?” and coming up with a PowerPoint solution is not new; taking some committed action would be. Could it be that the recession is truly serving as a catalyst for change and innovation in supply chain management? (See “A Google Approach to Supply Chain Management” for related commentary).
If past attempts and failures at enabling collaborative transportation processes are any indication, I believe that 3PLs (or another type of third party) need to be involved in these shared networks, not only to engineer the solution, but also to manage the day-to-day operations. I also believe that many 3PLs are eager to play a role. But this will only work if 3PLs and customers transform the way they currently work together (see “Have an Economist Negotiate Your Next 3PL Contract” and “The Missing CEO in Logistics Outsourcing Relationships” and “On Courage, Trust, and Patience in Logistics”). In my opinion, applying the principles of Vested Outsourcing (aka performance-based outsourcing) in creating a shared network solution is the ideal approach, even if the process would be more challenging than normal due to the various stakeholders involved.
Instead of asking why all of this wouldn’t work, keep asking why it will…and take some action!
Labor Management at DSC Logistics
· CommentsI recently spoke with Jim Chamberlain, the Director of Engineering at DSC Logistics about their rollout of RedPrairie’s Labor Management System (LMS) solution.
Jim began his career at Kraft where he worked to develop labor standards. Based on that experience, he knew this was a big opportunity for DSC when he joined them. In 2005, DSC evaluated the major suppliers of LMS solutions. They selected RedPrairie’s solution… Continue reading
First, nearly everyone in the business believes that we are living in, yes, a pre-9/11 era when it comes to the security and resilience of electronic information systems. Something very big—bigger than the Google-China case—is likely to go wrong, they said, and once it does, everyone will ask how we could have been so complacent for so long.
This was one of the key points raised in a very interesting… Continue reading
Before you implement a supply chain planning or execution solution, you should talk to other companies that have implemented the solution (ideally, about 20 companies), as well as consultants and analysts familiar with the technology. If you are a busy executive and don’t have the time to conduct these interviews, someone on your staff can execute this research or you can hire an outside firm like ARC to do it… Continue reading
Here’s what caught our attention this week in the world of supply chain and logistics:
- Manhattan Associates Reports Strong Second Quarter Earnings Per Share
- UPS 2Q Earnings Soar 71 Percent on 13 Percent Revenue Growth
- Ryder Reports Second Quarter 2010 Results
- LeanLogistics Releases On-Demand TMS® v.10.2.0
- Sterling Commerce Expands Mobile App Portfolio with Industry’s First Mobile B2B Integration as-a-Service
Logistics executives face many transportation-related challenges, both today and in the future: volatile fuel prices, capacity constraints, road congestion, driver shortage, hours-of-service and safety regulations, sustainability initiatives, new taxes and fees (e.g., carbon emissions tax? vehicle miles travelled fee?), and the list goes on. This reality has led many shippers and carriers to focus on ways to improve the productivity of their transportation operations. Some have invested in… Continue reading
The National Institute of Standards and Technology (NIST) is researching how software-as-a-service (SaaS) solutions and cloud computing are being used and deployed today and how these technologies will evolve in the future. Because SaaS is so prevalent in the transportation management systems (TMS) and mobile resource management (MRM) markets, I thought it would be worthwhile to dive into NIST’s research and writings on this topic.
My first reaction… Continue reading
Innovating the Lowly Truck Trailer
· CommentsWhat will truckers haul when there’s nothing left to haul?
This question popped into my head yesterday when I heard the news from Amazon that over the past month it has sold 180 Kindle books for every 100 hardcover books it has sold. Simply put, the Internet is a growing transportation mode in some industries.
Of course, not everything is going digital. There is still plenty of stuff to ship around… Continue reading














