Digital Transformation Archives

Why Data Visualization is Key to Better Decision-Making in Warehouse Operations

Business Intelligence | By Rob Mitchell • 11/07/2024

In the fast-paced, data-driven environment of today’s warehouse and distribution operations, data visualization has become a linchpin of decision-making, productivity, and user satisfaction. Data visualization plays a crucial role in how data is consumed, understood, and ultimately acted upon, transforming vast streams of information into intuitive and actionable insights for warehouse managers and workers alike.

I recently paid a visit to a prospective customer site, and my experience there reminded me of the importance of data visualization. I was giving a demonstration of our new Dynamic Slotting solution, and I would characterize their interest as solid but not urgent. But, when we shared the heatmap visualization of the tool, which highlights key operations data using an easily digestible color map, suddenly the prospects were very engaged and asked numerous questions about how Dynamic Slotting could impact their business.

This made crystal clear the fact that data visualizations can really help decision makers access the information they need to do their jobs well and make the right decisions. That started the wheels turning on some other best practices that can visually turn a flood of data into meaningful information.

Turning data into actionable insights

Warehouse software solutions generate extensive data across multiple operations—from inventory levels and picking rates to equipment usage and workforce productivity. However, data alone has limited value until it’s presented in a way that’s clear, contextual, and readily accessible. Data visualization bridges the gap between raw data and practical understanding, translating complexity into clarity and enabling quick, effective decision-making. When well-designed, these visualizations reveal patterns, trends, and anomalies that would otherwise remain hidden, empowering managers and workers with the insights needed to stay on top of evolving demands and challenges.

The power of real-time productivity dashboards and alerts

In a dynamic warehouse setting, real-time productivity dashboards and alert systems are among the most powerful data visualization tools available. These solutions provide managers with immediate access to the most crucial metrics, such as pick rates, order accuracy, and equipment utilization, and send alerts when performance deviates from expected norms.

• Empowering managers through real-time data

Real-time dashboards allow managers to take a proactive rather than reactive approach. With immediate access to productivity metrics, managers can identify potential issues before they impact overall performance. For example, if a worker’s pick rate drops, an alert can trigger a check-in or targeted coaching session, addressing potential issues such as fatigue or difficulty navigating specific areas of the warehouse.

For example, at Lucas, our management console gives supervisors and managers real-time visibility into their operations, exceptions, associate productivity, and workflow, as well as powerful tools to manage workers using our mobile applications. The management console also lets managers configure how they view information to suit their needs and preferences. And since supervisors today need to be as mobile as their workers, they can access the console on tablets, smartphones and other mobile devices.

• Supporting workers with instant feedback

Real-time feedback through dashboards or handheld devices helps workers stay on track by providing them with up-to-the-minute information about their performance. Visual cues, such as color-coded indicators, are intuitive ways to show how individual performance aligns with goals. For instance, a green indicator could signify on-target productivity, while red indicates an area needing improvement, nudging workers to adjust their pace or processes in real time.

Best practices for optimizing data visualization in warehouse software solutions

• Designing for clarity and simplicity

While it might be tempting to pack dashboards with as many data points as possible, clarity is paramount. Each metric displayed should serve a clear purpose, supporting decision-making without overwhelming the user. Effective dashboards often use simple, color-coded visuals (as in the heatmap example) to display data in a quick-to-grasp format, with straightforward filters to drill down into specific areas as needed.

• Customizable views for different roles

In a warehouse, managers and workers have distinct responsibilities, which should be reflected in their dashboards. Customizable dashboards allow users to prioritize and filter data based on their roles. Managers, for example, might prioritize broader metrics such as overall throughput, while workers may focus on individual task completion rates or inventory location efficiency. This tailored approach improves relevance, minimizing unnecessary information and enhancing engagement. Supervisors at RNDC, a leading wholesale beverage alcohol distributor, are able to view real-time progress and decide where to best allocate workers to keep operations on pace.

• Integration with automated alerts and thresholds

Automated alerts are an invaluable feature in real-time dashboards, as they draw attention to performance anomalies, or exceptions, which require immediate action. Setting up predefined thresholds—such as pick rates, order accuracy, or worker productivity benchmarks—enables software to automatically flag deviations and notify relevant team members, minimizing delays and reducing errors. Best practices for alerts include avoiding excessive notifications, which can lead to alert fatigue, and focusing on mission-critical metrics that demand prompt responses.

• Providing historical and predictive analytics

Real-time data is invaluable, but historical and predictive analytics add an essential dimension to data-driven decision-making. Incorporating trend analyses and predictive visualizations enables warehouse managers to anticipate potential bottlenecks, seasonal demand shifts, and equipment maintenance needs. The slotting example mentioned previously uses predictive info such as velocity, affinity, and seasonality to help make and visualize its slotting swap suggestions. Leveraging predictive analytics within dashboards can help warehouses become more agile, aligning labor and resources in advance rather than merely reacting to issues.

• Continuous feedback and improvement loops

Data visualization is not just about providing data; it’s about supporting a continuous improvement culture within the warehouse. Encouraging regular feedback from both managers and workers on the effectiveness of dashboards helps developers fine-tune the software for better usability and functionality. Additionally, incorporating gamification elements, such as personal bests and team milestones, can engage workers and create a positive reinforcement loop that boosts overall productivity and job satisfaction. Chattanooga, Tennessee-based 3PL Kenco Logistics incorporates gamification elements like feedback, music, and leaderboards in its warehouses. By doing so, the company has observed productivity gains of 3% to 5% in locations that previously lacked real-time performance visibility.

Visualizing data for a competitive advantage

The importance of data visualization in warehouse software solutions cannot be overstated. As warehouses strive to meet rising customer expectations and operational demands, the ability to visualize data in an actionable way becomes a key differentiator. From real-time productivity dashboards that empower managers to automated alerts that guide workers, effective data visualization elevates every aspect of warehouse operations.

By investing in clear, role-specific, and real-time data visualizations, warehouses can stay agile, optimize productivity, and build an empowered workforce aligned with organizational goals. When designed thoughtfully and used strategically, these tools become powerful assets, enabling warehouses to transform raw data into a competitive advantage in the modern supply chain.

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Rob Mitchell leads Lucas Systems in the development of data science products and solutions that allow its customers to extract more value from their warehouse and distribution center operations. Inspired by a commitment to improving the lives of our customers by making them more efficient and making their jobs easier through data, he showcases a unique skill set driven by superior knowledge in data engineering, machine learning, data visualization and Python programming.

Rob excels at creating data pipelines, training machine learning models, and building simulations that enhance value for customers, while also utilizing his knowledge of cloud computing to simplify data processes and improve performance and accessibility.

He is a graduate of the Harris School of Public Policy at the University of Chicago, where he earned a Master of Science degree in Computational Analysis and Public Policy. Rob also holds a Bachelor of Science degree in Mathematics & Political Science from the University of Alabama.

Digital Product Passports: A Game Changer for Global Compliance

Business Intelligence | By Jim Frazer • 10/09/2024

As businesses face tighter regulations on product safety, sustainability, and ethical sourcing, Digital Product Passports (DPPs) are becoming crucial for navigating these challenges. Today’s regulatory environment requires companies to comply with local laws and international standards that often differ across regions. DPPs provide a streamlined, digital way to document a product’s lifecycle, making it easier to ensure compliance and improve transparency. For companies operating globally, quick access to accurate product information can help avoid penalties and maintain trust. Let’s explore how DPPs are impacting regulatory compliance, preparing for future rules, and encouraging industry collaboration.

How DPPs Are Impacting Compliance Across Multiple Regions

Digital Product Passports are becoming increasingly important for companies managing compliance across various regions. As regulations become more extensive around product safety, environmental responsibility, and ethical sourcing, DPPs offer a reliable way to record a product’s entire lifecycle. By digitizing this information, businesses can more easily demonstrate compliance with local, national, and international regulations. This also helps avoid legal issues while building trust with regulators and consumers. DPPs simplify compliance by consolidating all necessary information in one place, reducing administrative burdens. As regulations grow more complex, the ability to access a product’s complete history quickly and easily becomes vital. DPPs not only provide transparency but also position businesses as proactive in addressing regulatory changes. As the regulatory environment continues to shift, companies that adopt DPP strategies will be better prepared for the future. Additionally, DPPs are evolving into strategic assets, helping businesses streamline operations while ensuring long-term compliance.

Simplifying Compliance Across Diverse Markets

A key advantage of DPPs is their ability to bridge regulatory gaps across different regions. Each country or market has its own set of rules, which can be challenging for global businesses. In the European Union, the Green Deal emphasizes sustainability, while the U.S. Environmental Protection Agency focuses on lifecycle analysis and waste management. DPPs allow companies to centralize compliance data, ensuring that it meets requirements across regions. By consolidating this information in one location, DPPs eliminate the need for multiple tracking systems, reducing complexity and the risk of non-compliance. This system benefits both businesses and regulators by providing quick access to all relevant information during audits, thus global companies can more easily adapt to local regulations without overcomplicating their operations. DPPs streamline that compliance process, allowing businesses to navigate fragmented regulatory landscapes with speed and efficiency.

Addressing Regulatory Challenges with DPPs

Despite their benefits, managing compliance with DPPs presents its own challenges. One of the largest issues is the constant evolution of regulations across regions. What complies today might not comply tomorrow, and businesses must stay vigilant to remain up to date. This is especially true for global companies dealing with a patchwork of regulations that differ by market, geographical location and regulatory bodies. Keeping products compliant across all relevant regions can become overwhelming. Additionally, managing compliance for multiple products, each with distinct regulatory requirements, adds significant complexity. Manual tracking of these changes is typically not feasible for businesses, whether large or small. Advanced data management platforms, which automate tracking of regulatory updates, are becoming increasingly important. These systems can automatically integrate regulatory changes into DPPs in real time, significantly reducing the risk of non-compliance. By leveraging technology, businesses can reduce the administrative burden of keeping DPPs current while ensuring they meet ever-changing regulatory requirements.

Future-Proofing Compliance with DPP Systems

To stay ahead, companies must implement systems that continuously monitor and update their DPPs. Regulations do change frequently, and static DPP systems will fall short. Automation tools can track regulatory changes across markets and update DPPs in real time. This approach reduces the likelihood of products becoming non-compliant, preventing penalties and legal action. In addition to tracking current regulations, businesses should also prepare for future changes. For example, sustainability regulations in the EU and other regions are becoming more stringent. Companies that anticipate these changes by integrating more detailed environmental data into their DPPs will avoid last-minute disruptions. Advanced data management systems help businesses stay ahead of shifts in regulations by flagging upcoming changes, thus companies that deploy dynamic DPP systems will be better equipped to meet future regulatory demands without adding administrative burdens.

Anticipating Regulatory Changes: The Key to Effective DPP Strategies

A crucial part of an effective DPP strategy is anticipating those future regulatory trends. Many businesses rely on reactive approaches, struggling to keep up with new rules. By focusing on future-proofing their DPP systems, companies gain a competitive edge, especially in sustainability-driven markets. For example, businesses in the U.S. must prepare for state-level regulations, which can vary significantly. A forward-looking strategy ensures compliance while positioning companies as leaders in sustainability. By taking a forward-thinking approach, companies can make gradual operational adjustments, minimizing disruptions. In addition, businesses should keep an eye on technological trends like blockchain, which could further enhance DPP capabilities.

Why DPPs Will Become Mandatory in Sustainability-Focused Markets

DPPs are likely to become a requirement in markets prioritizing sustainability. Governments and international bodies are increasing their efforts to combat climate change, resulting in a broadening and deepening of regulations. The European Union, for instance, is setting the stage for mandatory DPPs under its Green Deal. Businesses that lack comprehensive DPP systems may face compliance issues down the line. However, those that invest in robust DPPs now will meet these demands without significant disruption. This trend will likely extend to other regions, including North America and Asia, where sustainability initiatives are gaining traction. For companies, developing and maintaining DPPs is not just about regulatory compliance—it’s a long-term investment in their ability to stay competitive in global markets. As regulations become more stringent, DPPs will be essential for maintaining market access.

Getting Started with DPPs: A Practical Roadmap

For companies just beginning to implement DPPs, the first step is understanding the regulations that apply to their products. Conducting a thorough analysis of these rules helps identify the data that needs to be captured. This may include environmental impact, safety standards, and ethical sourcing information. Once the data is identified, businesses can design DPP systems that allow for easy input, retrieval, and reporting. Automating these processes is essential for companies with large product portfolios, as it minimizes the risk of missing updates. Over time, DPPs should integrate smoothly into daily operations, reducing the need for manual intervention. This allows compliance teams to focus on more strategic tasks rather than managing routine updates. As DPPs become embedded into business operations, managing compliance across regions becomes more efficient. The goal is to create a system that reduces compliance risks and improves operational efficiency.

Collaborating for Success: Standardizing DPP Practices

Collaboration within industries is key to simplifying DPP adoption. As regulations become more consistent, particularly within the EU, businesses must develop standardized approaches to DPPs. Industry-wide collaboration helps establish best practices, ensuring that companies align their compliance efforts. When industries collaborate to develop common standards, businesses can navigate regulations more effectively. Active participation in industry groups allows companies to stay informed about upcoming regulations and share insights on managing compliance. This cooperation can also lead to technological advancements, as companies pool resources to improve DPP systems. Aligning with industry standards also improves relationships with regulators, as businesses adhering to best practices are often viewed as more credible. In the long term, this collaboration helps industries stay ahead of regulatory changes and simplifies compliance for all stakeholders.

Why Seamless DPP Access Is Critical for Businesses and Regulators

Finally, companies must ensure their DPP systems are both accurate and easily accessible. Regulators are increasingly relying on digital tools to monitor compliance, and they expect near-immediate access to product information. Poorly organized DPPs can result in penalties or audits, even for otherwise compliant companies. By ensuring DPPs are user-friendly and up-to-date, businesses reduce regulatory scrutiny and strengthen their market reputation. Accessible DPPs demonstrate a commitment to ethical practices and sustainability, which resonates with consumers and regulators alike. In today’s market, consumers care about where products come from and their environmental impact, thus a well-maintained comprehensive DPP system differentiates a company from its competitors. DPPs are not just about compliance—they help position businesses as responsible, forward-thinking players in a competitive marketplace. By investing in high-quality DPP systems, companies ensure they meet regulatory demands while enhancing their reputation.

Conclusion:

Digital Product Passports are poised to become essential for regulatory compliance, especially as sustainability and transparency take center stage. Companies that adopt robust DPP systems now will not only streamline compliance but also lead in responsible business practices. By centralizing product data, automating updates, and anticipating future regulations, businesses can avoid risks and maintain a competitive edge. Collaboration across industries will further standardize DPP practices, simplifying compliance efforts. As this digital oversight increases, well-organized DPP systems will boost both compliance and reputation. Embracing DPPs is not just about meeting current requirements—it is a strategic move for the future.

Standards Driven Innovation: How Connected Vehicles Are Impacting Logistics and Smart Warehousing

Automotive Industry | By Jim Frazer • 10/02/2024

The Ecosystem Today

The logistics ecosystem is being transformed by the rise of connected vehicles equipped with IoT sensors and data-driven technologies. Connected vehicles, following standards like the SAE J3016, which defines the six levels of vehicle automation, are becoming a crucial part of logistics operations. These vehicles collect and transmit real-time data on location, speed, fuel consumption, and cargo conditions, enabling more dynamic decision-making. For example, logistics companies are to employ Level 2 and 3 autonomous vehicles that assist drivers by adjusting speed and steering based on road conditions. Smart warehouses, governed by standards like ISO 9001 for quality management, are also integrating AI systems to optimize inventory management and automate the loading and unloading processes. The combination of these connected vehicles with smart warehousing systems creates a seamless flow of information, allowing for real-time adjustments to delivery schedules, inventory management, and routing. Cloud platforms that comply with ISO 27001 standards for data security play a critical role in managing and securing the vast amounts of data being transmitted between vehicles and warehouses. By adhering to these industry standards, logistics companies ensure safer, more efficient, and compliant operations that meet regulatory and customer expectations.

What Are The Challenges?

One of the key challenges in adopting connected vehicle technology is integrating these new systems with legacy logistics infrastructures, many of which were not built with connectivity in mind. For example, logistics companies operating older fleets are faced with upgrading their vehicles to meet the requirements of SAE J3016 standards for automation. The costs associated with upgrading to smart vehicle systems, including sensors that comply with V2X (Vehicle-to-Everything) communication protocols, can be prohibitive, especially for small and mid-sized businesses. Furthermore, cybersecurity remains a significant concern, as connected vehicles create more entry points for potential cyberattacks. Ensuring that these systems comply with cybersecurity standards, such as ISO/SAE 21434, which addresses road vehicle cybersecurity, is crucial for protecting sensitive data in connected logistics environments. Another challenge is the lack of a skilled workforce that understands both logistics operations and the technical requirements of managing connected vehicles and AI-driven warehouses. Logistics firms must also navigate complex regulatory frameworks, as connected vehicles and IoT technologies are subject to varying standards across different regions, adding complexity to global operations. Sustainability concerns also arise, as autonomous and connected systems may require significant energy to operate, potentially conflicting with ISO 14001 standards for environmental management.

How to Surmount Those Obstacles?

To overcome these challenges, logistics companies should adopt a phased approach to implementing connected vehicle technologies. For example, companies can start by retrofitting existing vehicles with IoT sensors that meet the SAE J3016 standard for partial automation, allowing them to benefit from real-time data collection without overhauling their entire fleet. Leveraging government incentives and grants aimed at promoting Industry 4.0 technologies can help offset the costs of integrating these advanced systems. Ensuring that connected logistics systems comply with ISO/SAE 21434 cybersecurity standards will help mitigate the risk of data breaches, while also ensuring compliance with regulatory frameworks. To address the skills gap, logistics companies can offer specialized training programs focused on IoT, AI, and autonomous systems, aligning with industry standards such as logistics and supply chain certification programs. Collaboration with technology providers and cybersecurity experts can further enhance system protection and ensure compliance with international standards. Sustainability concerns can be addressed by investing in energy-efficient autonomous vehicles, such as electric trucks, which not only reduce emissions but also comply with ISO 50001 standards for energy management. By following these best practices and adhering to industry standards, logistics companies can integrate connected vehicles and smart warehousing technologies in a scalable, secure, and sustainable manner.

What’s the The Future Look Like?

The future of logistics will likely be driven by fully autonomous, connected vehicles that comply with the highest levels of automation as defined by SAE J3016. These vehicles will communicate seamlessly with smart warehouses, enabling completely automated delivery processes. The use of V2X communication standards will allow vehicles to interact with each other, as well as with traffic management systems and warehouse operations, optimizing routes in real time and reducing fuel consumption. Predictive maintenance will be further enhanced by IoT sensors, allowing companies to proactively address potential vehicle issues before they result in costly breakdowns. In addition, logistics providers will increasingly adopt blockchain technologies, adhering to ISO/IEC 20231 standards, to enhance data transparency and security across the supply chain. The future also promises tighter integration between vehicles and smart warehouses, where warehouse systems can automatically allocate space and assign tasks based on real-time data from connected vehicles. As these systems evolve, compliance with evolving ISO, SAE, and cybersecurity standards will ensure that logistics operations remain safe, efficient, and legally compliant. By focusing on these advancements, logistics companies will be able to build smarter, more responsive, and more sustainable supply chains capable of meeting the demands of a rapidly changing global market.

Recommendations

Logistics companies should prioritize the adoption of connected vehicles that meet industry standards such as SAE J3016 for automation and ISO/SAE 21434 for cybersecurity. Starting with partial automation and IoT sensors on existing fleets is a cost-effective way to modernize logistics operations. Collaborating with technology providers is essential for developing tailored solutions that comply with global standards and industry best practices. Companies must also prioritize the implementation of robust cybersecurity protocols, ensuring that they meet ISO/SAE 21434 standards to protect sensitive logistics data. Upskilling the workforce through training programs that focus on managing connected vehicles and smart warehouses will ensure a smoother transition. Predictive maintenance strategies should be integrated into the logistics ecosystem, leveraging real-time data from connected vehicles to reduce downtime and operational costs. Sustainability should be a key focus, with logistics companies investing in energy-efficient autonomous fleets that comply with ISO 50001 standards for energy management. Furthermore, adhering to ISO 27001 data security standards will help ensure that cloud-based platforms managing logistics data are secure and compliant with regulatory requirements. By following these recommendations and adhering to relevant standards, logistics companies can successfully harness the power of connected vehicles and smart warehousing.

Summing Up

Connected vehicles, guided by SAE standards, are impacting the logistics industry, driving increased levels of efficiency, automation, and real-time operational control. These vehicles, combined with AI-powered smart warehousing systems, will enable logistics companies to significantly reduce errors, improve delivery times, and enhance overall efficiency. Predictive maintenance, powered by real-time data and aligned with SAE guidelines, will minimize vehicle downtime, and ensure smoother operations. The integration of blockchain technology, adhering to ISO standards, will provide enhanced transparency and security across the supply chain. The full potential of connected logistics ecosystems will near realization as autonomous vehicles and smart warehouses operate together under a unified set of global standards. Companies that embrace these technologies and ensure compliance with evolving industry standards will lead the way in logistics innovation, creating smarter, more sustainable, and more customer-focused supply chains capable of adapting to the demands of a fast-paced global marketplace.

G & J Pepsi-Cola Bottlers Accelerating Digital Transformation

Logistics Trends | By Janice Abel • 07/17/2024

Jeff Erwin, VP of manufacturing at G&J Pepsi-Cola Bottlers, has been helping to accelerate the digital transformation while aligning with the company’s goals and mission to improve its operational efficiency and meet customer requirements and regulatory compliance challenges by tracking and measuring performance. According to Erwin, “sustainability, operational efficiency and digital transformation in manufacturing are important to G&J Pepsi-Cola Bottlers. Erwin highlighted the importance of real-time data accuracy and visibility. People, technology, and data are very important for their journey.

The importance of employee ownership in driving cultural transformation and their acceptance of data-driven decision making within the organization was also emphasized. Data is a valuable asset, and having high-quality data that people can trust is critical because employees must see the value to drive their behavior. According to Mr. Erwin, “G&J Pepsi-Cola Bottlers treats their employees with dignity and respect in a culture that motivates them, has values and integrity.” Employees must see the value of technology and digital transformation. According to Erwin, “digital transformation is not just about technology, it’s about the people, and also the employee’s acceptance of the changes.”

About G&J Pepsi-Cola Bottlers

G&J Pepsi-Cola Bottlers is a 100-year-old privately held company with headquarters in Cincinnati, Ohio. G&J Pepsi-Cola Bottlers began its journey in 1925 when two women in Cincinnati, along with their partners, purchased the New York Mineral Water company. Shortly after, they renamed the business to the Grand Pop Bottling Company. A decade later, in 1935, they became a Pepsi-Cola Bottler, and the name G&J Pepsi-Cola Bottlers was officially adopted in 1955. G&J Pepsi-Cola Bottler markets, sells, produces, warehouses, vends, picks, and delivers orders in partnership with Pepsi-Cola. The company is a fourth generation privately held company. The company’s mission is to deliver competitive and sustainable operating results and returns to shareholders.

The company has 4 production plants in Lexington, KY, Winchester, KY, Columbus, OH and Franklin Furnace, OH. They also have Warehouse locations in Athens, OH, Hamilton, OH, Maysville, KY, Ripley, OH, Wilmington, OH, and Zanesville, OH.

Tracking Production Line Efficiency and Downtime

Mr. Erwin told us that the company supports community, sustainability, and provides products, solutions and services that exceed their customer’s needs by delivering high quality products to their consumers. The company is using technology to help simplify unproductive work processes to allow people to focus on their core responsibilities.

Mr. Erwin explained to us that the ability to track efficiency and downtime is critical to the process and their journey. It is important that the company track and measure production line performance in real time using data from their PLCs, machines, and other assets to track production line performance and to identify areas for improvement. The company had been tracking efficiency and downtime but manually and needed a way to improve visibility and the ability to analyze the cause easily.

TPM is a methodology aimed at increasing production efficiency by ensuring that every machine in a production process is always able to perform its required tasks. The three goals of TPM are zero unplanned failures, zero product defects, and zero accidents. “TPM helps drive employee ownership of machine conditions. It is an approach to equipment maintenance that aims to achieve perfect production with no breakdowns, no small stops, no defects, and no accidents. Some of the key measurements that are important to the company include MTBF (mean time between failures/stops), average uptime, MTTR (mean time to repair), and other real-time data and analysis information. MTBF and MTTR impact uptime and efficiency and are particularly important calculations for the company.

The Challenge – Eliminating Machine Stops

A minor stop for G&J Pepsi-Cola Bottlers is defined as being less than 10 minutes of downtime. Below are some interesting statistics that Mr. Erwin quoted about minor stops that challenge the CPG industry, in general. For example, most stops are minor stops, and an average production line stops 20,000 times per year. An average production line experiences 6.4 hours of downtime in a day due to minor stops. Best-in-Class minor stop performers have nine times fewer minor stops on their production lines over laggards. And Best-in-Class performers have only seven minutes of unidentified downtime in a day.

Erwin told us that it is important to look not only at machine stops and failures, but also at machine changeovers. These metrics are crucial in understanding, analyzing, and improving the efficiency and reliability of manufacturing equipment. Machine stops can be planned for changeovers for example, or unplanned for equipment failures. Both factors affect MTBF and MTTR metrics. Using the new technology, G&J Pepsi-Cola has real-time information on over 1000 production lines with 10,000-unit operations. Their production line runs over 20,000 steps per year with many different assets.

Reducing Downtime and Increasing Uptime

Erwin shared his personal experience implementing technology across multiple production sites in just three months that demonstrated the potential of digital transformation. To improve their intelligence they deployed Sage Clarity’s ABLE (Automated Bottleneck Learning Engine) – a cloud-based data collection accelerator that provides real-time root cause analysis for machine downtime; Epicor LEDS Reporting for real time insights, tracking and performance, and Sage Clarity’s One View for Enterprise analytics for production intelligence reporting and analytics in the Cloud, and PTC’s Kepware for connecting equipment including Rockwell Automation, Siemens and Mitsubishi PLCs.

Sage Clarity’s ABLE is a Data Collection Accelerator that models production lines, integrates IoT (Internet of Things) edge data into business systems, and provides root-cause analysis for downtime and production issues. ABLE can be used as a data pipeline for manufacturing analytics, a next-gen Andon system, and a middleware for IIoT (Industrial Internet of Things) data integration.

Digital Transformation in Logistics

Logistics Trends | By Chris Cunnane • 04/05/2023

Digital transformation is a term that is thrown around a lot, and people have different ways to interpret what it means. Essentially, digital transformation is the integration of digital technology into all areas of a business. ARC Advisory Group, where I work, publishes an analysis of the 25 manufacturers with the most mature digital transformations. The report identifies the leaders and highlights best practices. The report takes a holistic approach to what a digital transformation means. “Leading companies take a strategic approach, integrating digital technology throughout their value chains. Design and engineering, production operations, maintenance, logistics, supply chain, business systems, customers, products, and organizational structure are subject to innovative change as companies examine and update processes and deploy new tools and technologies.”

The majority of time when people are discussing digital transformation, they are not directly referring to the digital transformation of supply chains. APQC conducts research on supply chain and logistics to help organizations assess the performance of their own processes and functions compared to their peers. Most recently, the APQC has conducted best practice and benchmarking research on digital transformation. This survey-based research gathers quantitative data as well as information on practices or performance drivers. The final report focuses on the current state of key practices in digital transformation in logistics, spread across multiple industries and over 1,100 respondents.

There are many areas of digital transformation within the supply chain. This report provides a cross-industry perspective on digital transformation in logistics including digital maturity in inventory management, transportation, fleet maintenance, safety and compliance, and more.

APQC Digital Transformation in Logistics Results

On average, respondents report allocating 14 percent of their logistics and warehousing annual budget to technology. Of this technology budget, an average of 30 percent is typically allocated to digital transformation. Let’s take a deeper look at a few technology areas.

Inventory Management

Respondents report a wide variety of maturity levels for digital transformation initiatives in inventory management. From a maturity standpoint, the majority of respondents are digitizing data and processes. But, it varies on how the data and processes are being used form a technology standpoint. Ninety-one percent of respondents are digitizing data and processes collectively; but, only 31 percent are using predictive analytics and 26 percent are using artificial intelligence. This means that 29 percent of respondents are digitizing data and processes but not using advanced technology to make the data more actionable. A mere 6 percent of respondents are digitizing data and processes, using predictive analytics or artificial intelligence, and using automation to act on recommendations.

Transportation

For transportation, the numbers are roughly the same as far as maturity within the digital transformation journey. Eighty-eight percent of respondents are digitizing data and processes. Predictive analytics is used significantly more than artificial intelligence to optimize, as 35 percent are using predictive analytics compared to 17 percent for artificial intelligence. For these respondents, only 3 percent are digitizing data and processes, using predictive analytics or artificial intelligence, and using automation to act on recommendations. These numbers show a significant gap around the use of advanced technologies for optimization and decision-making.

Warehouse Equipment / Facility Management

Ninety-two percent of respondents are digitizing data and processes in warehouse equipment / facility management. These numbers are line with the aforementioned technology areas for digital supply chain transformation. Thirty-one percent of respondents are using predictive analytics and 24 percent are using artificial intelligence to optimize. For these respondents, 6 percent are digitizing data and processes, using predictive analytics or artificial intelligence, and using automation to act on recommendations.

Two other issues that come in digital transformation are compliance and safety. Within these areas, respondents are at the low end of the maturity model. For both compliance and safety, nearly one-third of respondents do not have any digital transformation initiatives in place. Additionally, about one-third of respondents have only digitized data and processes in these areas. Very few respondents use artificial intelligence to optimize their data compared to those that use predictive analytics to optimize their digitized data and processes.

Final Thought

The APQC survey gives an interesting look at digital transformation in logistics. Currently, respondents are at the mid-point of the maturity model when it comes to digital transformation initiatives in inventory management, transportation, and warehouse equipment / facility management. However, these respondents are showing that their organizations are on the low end when it comes to compliance and safety. Moving forward, I expect to see more interest, more investments, and more movement in digital transformation in logistics.

Polycrisis, Antifragility, and What’s Missing from Digital Transformation

Supply Chain Planning | By Polly Mitchell-Guthrie • 02/23/2023

Feeling overwhelmed by the persistence and prevalence of crisis? There’s a new word for this current state: polycrisis. Wishing your supply chain were strengthened rather than strangled under these conditions? There’s an older term now being applied to supply chains for this capacity: antifragility. Are you trying to figure out how NOT to join the 70% who fail at digital transformation? There are a couple of decades-old concepts that are the missing ingredients for success: people and process. As much as we conflate digital transformation with technology, without these missing ingredients your initiative will fail. And the true secret sauce to excellence is to fold in systems thinking and organizational learning.

“Polycrisis” was the talk of Davos at the recent meeting of the World Economic Forum, which defines it as “…a term used to describe the current global situation, where multiple complex, interconnected crises are occurring simultaneously.” Our abundance of serious threats may be one reason for the buzz around another term coined almost a decade ago by Nassim Taleb, antifragility: “The resilient resists shocks and stays the same; the antifragile gets better.” While the concept isn’t new, its application to supply chain is emerging, albeit without clear definition yet. I’m sure of this: achieving antifragility in a time of polycrisis cannot be done with outdated, manual systems and processes. Digital transformation is no longer optional.

Digital transformation in a time of polycrisis

Supply chains are no strangers to disruptions, like the recent earthquake in Turkey and Syria, but polycrisis is meant to describe interconnected impacts of crises with repercussions rising to a much more serious level. In light of the magnitude of disruption supply chains have faced since the pandemic and the continued aftershocks, the aim of antifragility is not just resisting shocks and delivering the same results but getting stronger. A polycrisis may not be able to be prevented or predicted, but we can be prepared by getting better each time.

The urgent need for resilience increased the pace of digital transformation. A McKinsey study found that 90% of supply chain leaders expected to transform their planning systems. Overhauling disconnected, legacy systems to automate and strengthen supply chains is a critical priority. McKinsey also found that 60% of these projects exceed budget and timeline while failing to deliver the expected results.

Believing that digital transformation is about technology alone is an all-too-commonly-followed recipe for failure. Technology may be the impetus, but success requires transforming people and process also. These are major change management initiatives reliant on all three legs of the stool. New enterprise software may be fully implemented, but if we merely lift and shift underlying processes without upgrading the skills of our people, investments will fail to reap their true value.

The three legs of a digital transformation stool – people, process, and technology

Technology as one leg of the stool is foundational. A survey by boom! of supply chain professionals found that their number one wish to increase work satisfaction is better, integrated tools. Supply chains are systems, and the current retail inventory glut is the classic illustration of the bullwhip effect in action, the consequence of cascaded planning in silos. MIT professor Peter Senge, one of the leading management thinkers of all time, understood this, devoting the third chapter of his classic book, The Fifth Discipline, to the Beer Game, which was developed in the 1960’s at MIT to teach supply chain concepts like the bullwhip effect.

The current clamor for supply chain “visibility” can illustrate another consequence of planning in silos. Senge described systems thinking as “…a discipline for seeing wholes. It is a framework for seeing inter-relationships rather than things, for seeing patterns of change rather than static snapshots.” Visibility alone often delivers static snapshots that leave companies merely “admiring” their problem.

Transparency into the inter-relationships of actions clarifies their systemic impact, not just the effect on a single node. A snapshot may optimize one link but won’t optimize the chain. Concurrent planning enables systems thinking – planners can see a holistic view across the chain, so they can learn together and collaborate for the best decision for the company, not just for their department.

Transforming processes is the second leg of the stool. McKinsey points out that organizations need to plan for what “good looks like” and defeat the prevalent response that “things have always been done this way.” Software shouldn’t be configured to the old ways but to the new vision. As two leading supply chain experts, Nada Sanders and Morgan Swink, found when they studied supply chain digital transformation, organizational issues were the biggest obstacles to success.

Investing in people is the third leg of the transformation stool. Accenture’s recent study found that only 38% of executives feel their teams have the digital skills needed to capitalize on the technology they are given. They argue that those companies who do invest in their teams will be the ones in the lead.

Learning and systems thinking are the magic sauce

People can do more than they think if they are pushed to grow. Key to Senge’s argument for systems thinking is the importance of organizational learning. He describes a learning organization as one “…where people continually expand their capacity to create the results they truly desire…” Investing in expanding capacity can dramatically improve productivity, but what does it take to help organizations learn?

Four out of five leaders expect to use artificial intelligence and machine learning (AI/ML) in their supply chains, making it one of the leading drivers of digital transformation. Algorithms “learn” patterns from data to predict decisions that can be automated, saving planners from the tedium of routine updates. However, this learning requires large volumes of data to “train” the models. Disruptions often interrupt these patterns and produce rare events, which challenge the algorithms designed to learn from prior patterns.

Humans uniquely can apply learning from other contexts and experiences and collaborate to transfer and combine knowledge. In a recent interview, Senge points to a study of HP, a company well-known for its technological. Two divisions had similar access to tools and technology, but one group was far more successful than the other because of its knowledge network — they were well-connected and willing to help each other with information. They reaped the full value of their technology investment by learning together and outperformed their peers in other departments.

We often say that challenges are “learning experiences” that make us stronger. If organizations expand their capacity to learn they grow stronger with each crisis. For example, giving people common information in real-time lets them see consequences of any decision and learn to collaborate to make better ones.

Paris-based Technicolor found that concurrent planning enabled their teams to plan together, instead of in isolation. Giving planners access one source of truth prevented buffering with inventory, reduced both conflict and millions of dollars of inventory, and increased the accuracy of information shared with suppliers and customers. Technology enables learning together and increases organizational capacity to make the best decisions across the chain, not just for their link.

Learning to get better and achieve antifragility

Resilience is about experiencing shocks and being able to deliver the same results, but is “the same” still enough? Insanity is when people do the same thing and expect different results; I call it futility when we do the same thing and expect the same results, even when our environment has changed. A world characterized by polycrisis has changed too much to even produce the same results – the world is too interconnected. Climate change is biggest crisis of all, the ultimate example of interconnected systems. Addressing it means recognizing supply chains for the complex systems they are and no longer expecting that planning in silos will be sufficient. We cannot control a polycrisis, but we can prepare by mastering systems thinking and leveraging our collective learning.

In his clarion call for systems thinking and learning, Senge wrote: “What if, in light of what organizations could be, ‘excellence’ is actually ‘mediocrity?’” If we want digital transformation to achieve more than mediocrity, for crises to not deflate us but develop us, we must transform far more than our technology. We need modern technology, but we must also transform our people and process. Continuous learning is the magic sauce that can enable companies to not only withstand ongoing shocks but get stronger. Quickly learning together from failures and successes allows us to incorporate these lessons into the future. This kind of learning increases capacity and allows us to get better. And getting better is the key to antifragility, which will set those who achieve it far apart from their competitors in a time of polycrisis.

Polly Mitchell-Guthrie is the VP of Industry Outreach and Thought Leadership at Kinaxis, the leader in empowering people to make confident supply chain decisions. Previously she served in roles as director of Analytical Consulting Services at the University of North Carolina Health Care System, senior manager of the Advanced Analytics Customer Liaison Group in SAS’ Research and Development Division, and Director of the SAS Global Academic Program.

Mitchell-Guthrie has an MBA from the Kenan-Flagler Business School of the University of North Carolina at Chapel Hill, where she also received her BA in political science as a Morehead Scholar. She has been active in many roles within INFORMS (the Institute for Operations Research and Management Sciences), including serving as the chair and vice chair of the Analytics Certification Board and secretary of the Analytics Society.

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