Creating Supply Chain Excellence

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My Top 3 Supply Chain Predictions for 2017

February 7, 2017

By Gene Tyndall
Executive Vice President, Tompkins InternationalSCM

I am pleased to offer my predictions for supply chains in 2017.

To begin with, I am avoiding the obvious forecasts for the year, for example:

• The U.S. macro-economy will expand under the new President, which will be positive for most all business sectors.

• The Digital disruptions will continue, as Amazon, Uber, and other digital-based companies grow and expand into both domestic and international markets, and also into both consumer and industrial segments.

• Cloud-computing will continue to expand, and accelerate, as businesses invest more into less expensive, highly secure, and faster implementations for supply chain systems and apps.

• Customer-centricity is finally prevailing as fundamental to demand-driven supply chains, which by their nature, are more amenable to cost management and predictability than supply-driven long lead times with demand uncertainty.

• Supply chain risk management will not diminish, even as some degree on US-based manufacturing growth is achieved, as many suppliers and components remain global in locations, and risks of disruptions are everywhere.

And, several more could be cited, as again this year, there are no shortages of predictions about the economy, businesses, and the workforce.

 

Here are my most important “top 3” substantive predictions for supply chains, with the above forecasts serving as the backdrop:

1. Let’s start with Supply Chain Planning (SCP), which most agree creates the supply chains, or adjusts them, based on known conditions and expected sales. Despite the fact that the “art and science” of SCP has improved, and many companies are making use of advanced tools, it continues to be difficult to point to substantive results of plans.

Annual plans, for instance, are often out of date six months into them, as markets change, online order volumes expand, and customer preferences are variable. In addition, Supply Chain planners continue to struggle with integration and alignment with other strategies and plans of their companies. While Sales and Operations Planning (S&OP) processes are meant to improve this prevailing situation, there are too few solid examples of Integrated Business Planning (IBP), where all plans are driven by an enterprise-wide strategy.

Prediction: There will be further progress toward robust and implementable planning, but not widespread transformations to effective S&OP, much less an effective IBP.

Reason: this requires more than Artificial Intelligence (AI), advanced optimization, or predictive analytics. The commonly used phrase to explain good performance, “the integration of people, process, and technology”, will remain elusive for most companies.

2. Next, let’s consider the trends in digitalization. There is no question that the Digital Age is upon us; the real questions are “so what?” and “what next?”. Digital thinking and its components have only just begun to impact supply chains, whether in planning or in execution. Yet, its business disruptions are more and more evident. Digital transformations put companies into uncharted territory, which makes the design of practical planning scenarios both challenging and complex. The normal objectives of effective supply chains fast, efficient, flexible, and agile, are even more complicated to achieve in execution.

Prediction: More and more implementation of digital components, such as the Internet of Things (IoT), robotics, AI, and others, will find their way onto digital platforms that will produce impressive results. This will be especially true in Distribution Centers (DC) and in Fulfillment Centers (FC). But, creating digital supply chains requires a journey, not a project, so we will only see incremental improvements.

3. Last, let’s consider the issues surrounding supply chains in the executive suite. While the last few years have produced significant gains in getting supply chains on executive agendas, we still have a ways to go. With only 25% of companies having a designated Chief Supply Chain Officer (CSCO), we have to wonder why this surprisingly low number remains the case.

Further, we still find gaps in Operations Strategies vis-à-vis Business Strategies, which lead to problems with capabilities and missed opportunities. Even further, we still find senior leaders viewing their supply chains as “cost centers”, and thus push for continuous cost reductions, without understanding the value creation of high-performing supply chains for achieving and sustaining customer loyalties.

One of the lingering key factors for this situation is the recurring functional views vs. process views i.e., operating the company through functional managers, and not through business process leaders. Not only are opportunities lost due to terminology conflicts, but also through functional performance measures. Reducing costs by functions is less difficult than through processes (e.g. order to delivery, procure to pay, or product design to customer), but thus far less important or value-based.

Prediction: We will see gradual progress in this area, but not widespread gains. Neither Enterprise Resource Planning (ERP) systems, nor advanced business planning tools, nor granular analytics, will change management structures, company cultures, behaviors, or processes themselves, until business executives learn to appreciate the contributions of supply chains as business value drivers.

Let’s hope my predictions for continued gradual progress in these three critical areas prove to be exceeded. My previous annual predictions proved to be overly optimistic. Thus, I am suggesting for 2017 that the complexities of people (talent), processes (redesigns and culture), and technologies (digitalization, advanced analytics, AI, and others), will once again limit the transformation of supply chains as forming the most important executive business goal on the agenda.

 

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Tour An Apparel Distribution Center! Reserve Your Spot Today For The 2017 SCLF!

January 26, 2017

By Tompkins International StaffPeter Millar, Durham,NC

Join us at the Tompkins International Supply Chain Leadership Forum 2017 (SCLF). We have another exciting addition to this year’s SCLF being held in Durham, NC May 8th to May 10th: Distribution Center (DC) tour.

Beginning at 2:00 pm on Monday, May 8th we will be hosting a tour of Peter Millar’s apparel DC designed by Tompkins International’s consulting team.

Founded in 2001, the Peter Millar line of fine clothing and accessories has become in just a few years the standard bearer for discerning and demanding individuals, on the golf course, in the office, and on the town. Known for uniquely proper clothing and a broad color palette, Peter Millar offers everything from woven sport shirts, sweaters, and knit golf and polo shirts, to tailored clothing, outerwear, footwear, and accessories. Peter Millar clothes and accessories are available online and in the finest specialty retail stores, prestigious resorts, and most exclusive country clubs. Their global distribution includes: North America, Europe, Asia, Australia, and the South Pacific.

Join us for an exclusive tour of Peter Millar’s DC. Some of the equipment you will see includes: select rack (single pallet storage), multi-level pick module (carton flow and deck rack), garment on hanger, high density deck rack storage, spiral conveyors, conveyor (mix of belt-driven live roller (BDLR), motorized drive roller (24v MDR), narrow belt sorters, scanners (mix between line in pick module and 5 sided scan tunnels), work platforms (packing and shipping), and spiral chutes.

Not only can you join the tour, there is also an opportunity to become a Platinum Level Sponsor and co-host the Peter Millar DC tour giving recognition throughout the entire SCLF. For more information on sponsor availability please email Gary Church or you may reach him via phone at 734.834.7331.

Sign-up for an unforgettable experience as we connect, share, and learn together. Please email Patty Trocchio for registration information.

Stay tuned to learn about our new additions to this year’s SCLF.

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The Impact of Artificial Intelligence in Transportation Services

January 23, 2017

By Lisa Kennedy
Project Manager, Tompkins International

Uber’s recent investment in artificial intelligence is a vital step in the realization of self-driving cars.   With this technology vehicles can be routed more efficiently.  Customers can receive deliveries anytime and anyplace at a lower cost.  Driverless trucks can reduce emissions and operate more safely.  Some analysts believe the global market for self-driving vehicles will be $51 billion by 2020.  As companies such as Uber, Google, and Tesla continue to test and invest in self-driving technology, this reality of self-driving vehicles will be sooner than original predictions.

What could be the impact of driverless vehicles and trucks?  Initially, there is no limit on number of hours of operation as vehicles can be in use 24/7.  This means a more efficient use of infrastructure.

Anybody with a driverless vehicle can offer their vehicle up for services when it is not being used, similar to what Uber drivers are doing now.  These vehicles can deliver people and packages with an unlimited supply of delivery capabilities.  Delivery will be anytime and anywhere the customer wants to receive it.

What does this mean to UPS and FEDex?  Will Uber be our next brokerage industry? Talk about a disruptor.

Driverless vehicles can deliver packages to USPS for delivery the next day. USPS can unload the packages at night and driverless vehicles can deliver packages to you to unload and drones can take the package from vehicles to front doors. Even more, with electric cars, you have no fuel charges.

Otto, recently purchased by Uber, is working on driverless trucking. Driverless trucking may be more eminent than driverless cars.  Driverless trucks can solve many of the problems the trucking industry is currently experiencing.  Truck driver shortages are expected to be roughly 48,000 this year.  Turnover is another significant issue as the truckload driver turnover is estimated at 90%.  Turnover is a result of time away from home, licensing, and regulatory requirements.  Safety is also an issue driverless trucking can resolve as it will reduce the high number of traffic accidents. To top it all off, fuel efficiency will also be improved as the trucks will operate at the optimum efficiency for fuel consumption.

Interstate driving is expected to be easier to get approval versus city driving; however, there are a lot more issues that the truck will encounter within city limits.  Otto envisions a truck that will be driverless on the interstate and when it reaches a city, the truck will stop and let a driver onboard to do final deliveries.

Truck platooning is expected to be the first step to driverless trucks.  Truck platooning is linehaul trucks traveling in a tight convoy and is coordinated by vehicle-to-vehicle communications.  The technology is being developed by Peloton Technology based in California and the West Australian government is currently funding fleet trials.  The Australian Driverless Vehicle Initiative is partnering with Peloton to examine the potential efficiency and safety benefits with platooning.  Investors in Peloton include UPS, Volvo, and Magna.

Current limitations include cost and regulatory approvals.  It is most likely the early adopters of the technology will be the current truckload carriers such as Swift, Schneider, and JB Hunt.  These carriers will gain the most from the reduced costs.  Initially there may be limitations on when and where driverless trucks can operate, i.e. during times when there is the least amount of traffic on the least traveled roads.

What are the possibilities for the warehouse industry?  If the costs to transport declines significantly, it will make sense to keep inventory close to production and only keep a limited supply close to the consumer.  Smaller trucks may be used making more efficient use of trailer space.

Does Uber have the capability to disrupt the transportation services industry, similar to its disruption of the Taxi industry?  Research suggests the answer may be sooner than we think.

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Ready for Golf? Reserve your spot today for the 2017 SCLF

January 19, 2017

By: Tompkins International StaffWashington Duke Golf

Join us at the 2017 Tompkins International Supply Chain Leadership Forum 2017 (SCLF). We have an exciting addition to this year’s SCLF being held in Durham, North Carolina May 8th to May 10th: our golf event.

This year you will be joining our CEO, Jim Tompkins, along with 200 other supply chain executives and experts. You will have the opportunity to connect with one another, share insight, and learn together due to the remarkable lineup of events and speakers taking place throughout the two days.  

Beginning at 7:30 am on Monday, May 8th Tompkins International and our golf sponsor ARCO Design/Build, will be hosting a complementary round of golf for forum attendees.  

Join us for 18-holes of golf on the award-winning golf course at the beautiful Washington Duke Inn & Golf Club. It is the only Robert Trent Jones designed course in the region, redesigned by Jones’ son Rees in 1994. The Duke University Golf Club was the site of the 2001 NCAA Men’s Golf Championship, and is considered one of the top ten golf courses in North Carolina. The course has also received top rankings from Golf DigestGolfWeekGolf Magazine, and the Zagat Survey.

However, more than its famous fairways that garners acclaim, the golf club’s state-of-art practice area boasts a driving range, six putting and chipping greens, seven sand bunkers, and eight target greens, all surrounded by a grove of tall pines and stately hardwoods. The Golf Shop has also been recognized by the PGA as one of the best in the Carolinas.

Sign-up for an unforgettable golf experience. Please contact Patty Trocchio at ptrocchio@tompkinsinc.com for registration information and stay tuned to learn about our next new addition to this year’s SCLF.

Registering for the Supply Chain Leadership Forum 2017 is easy, we hope you will join us to connect, share, and learn together.

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The Healthcare Supply Chain in Simple Terms

January 3, 2017

By: Brian Hudock
Partner, Tompkins International

In the healthcare sector cost cutting is fast becoming a daily mantra, as organizations from pharma to medical products all look for ways to maintain profit margins in the face of lost patents to new healthcare reimbursement levels.  However, in the supply chain simply cutting 10% of costs is not as easy as taking 10% of labor out of the process.  Quality and control must not be comprised; however, process waste should not be ignored as a target for improvements.  An approach of eliminating unnecessary steps, inventory, and in building the right network starts with inbound materials and flow through customer shipments.  Opportunities can be found in all areas of the supply chain, but first we have to understand all the major parts of our internal supply chain.

Materials Management

In the materials warehouse the site logistics operations are generally supporting R&D, plant operations, site/administrative operations, raw materials, packaging components, maintenance, quality, and finished goods storage.  Managing this many product flows while maintaining cGMP, product segregation, and balancing limited space generates process checks on-top of process checks to avoid any possible errors.  However, when multiple levels of quality holds, inspections, lead time safety stock, risk reduction pre-buys and lot specific materials are added.  The amount of storage space required far exceeds original design levels.  Optimizing the warehouse layout and flow paths is critical to operations success, but inventory management to reduce quality hold delays, obsolescence and material safety stock levels will generate more payback.  Other key operations that must be considered in the design include: sampling, dispensing, and partial return management.

WIP and Bulk

Often part of the materials management process, but frequently controlled by the processing groups.  WIP and Bulk are highly sensitive and generally in non-standard storage mediums and specialized environments where temperatures control is also a key that must be maintained and monitored closely.  The cGMP compliance and product segregation is critical to protect product integrity in and out of the process to process or process to packaging areas.  This flow often crosses general material flows and may even share a common, but segregated warehouse area.  There are limited options for off-site storage.  Flexible warehouse space is required to handle seasonal production without comprising product integrity.  The layout and material flow paths, as well as, systems to control lots, batches, and rotation are keys to minimizing risk and waste.

Finished Goods

Finished goods both released and on quality hold are often in the distribution center, creating the need for segregation either physically or using a validated electronic hold.  Lot segregation still drives location sizing, but the ability to pick eaches (bottle/pack unit level), cases or pallets creates the need for highly accessible locations and a replenishment function to achieve efficient operations.  Packaging components, particularly in cold chain operations become a major space requirement factor both for refrigerated/frozen  room temperature items.  The use of internal or external services for order fulfillment and component management will have a major effect on costs and scalability long term, therefore,  future projections must be considered closely when designing the finished goods operations.

Returns/Reverse Logistics

Returns are generally found in the distribution center or outsourced to best manage the process.  Returns must be processed for proper credit and then properly disposed/destroyed and fully tracked.  Returns take valuable space, labor, and can have peak periods associated with recalls or expiration date issues.  Due to the value of most finished products, the customer aspect of timely and proper crediting make the process one that must be staffed by those familiar with the product, able to identify fakes, and to work the returns systems efficiently. 

Transportation

Connecting all the operations in the supply chain from inbound materials to final customer delivery are managed by a mix of carriers, shuttle trucks, fork trucks, parcel delivery (air & ground), and contract fleets.  Optimizing the cost of transportation against the critical timing required to insure product safety, product security, and risk management is paramount to supply chain efficiency and success.  It is also generally the largest cost center (excluding procurement spend) in most operations. 

Overall

Optimizing the supply chain overall is an art form combining performance metrics, analytics, risk assessment, and internal versus external options on a daily basis.  A strong set of operational tools, facilities, systems, and awareness of future possibilities are key to allowing supply chain professionals  to manage and control spend without comprising product integrity as well as adapting daily to new regulations, global demands, and the unplanned for network interruptions.

The first step is establishing your current condition and developing an assessment of gaps and opportunities.  We have developed this for numerous organizations and are glad to help you understand the best approach to starting down the path to optimizing your supply chain. 

 

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Pharmaceutical Distribution Shuffle

December 27, 2016

By: Brian Hudock
Partner, Tompkins International

As the number of mergers, acquisitions, division exchanges, and general realignment of pharmaceutical focus continues to evolve globally, who is managing the supply chain integration?  Whether you are internal or using 3PL’s in markets, new products and product line consolidation takes time, coordination, and customer management.   Not to mention space, packaging testing, and DC reconfiguration.  In many cases, the easy way out is to maintain separate pick, pack, and ship operations by division/product line.  However, this is costly and does not generate long-term market value.

Consolidation, if done correctly reduces product handling, shipping containers, and order processing costs.  Why is it not being done or being done so poorly, currently?   In some cases, new product lines/divisions are not compatible due to temperature, hazardous levels, cross contamination, or customer base and need to be distinct.  However, in many cases, it is just easier to set-up a stand-alone grouping and come back to it later to insure all shipments are made on-time.  This costs space, labor, order processing, packaging, and most significantly freight costs.  A focus to integrate quickly and completely should be the goal of every pharmaceutical supply chain leader.   At one time being 100% accurate and in compliance was the standard, today 100% accurate, compliant, and cost effective are mandatory. 

How do you achieve efficient consolidation quickly and with minimal risk?

  1. Build flexibility into IT systems – New products are new SKUs not UFOs. If it fits into an existing environmental shipping profile, consolidate it into the customer service profile/order entry system immediately.  The excuse of multiple ERP’s and order entry systems is an IT conversion that should be standardized.  Full acquisitions/mergers take longer than product line acquisitions but even separate ERPs can be consolidated in good OMS/WMS packages until a single ERP is in place.
  2. Distribution Centers – (in-house or outsourced) must have capacity for growth. If it does not fit, a strategy to expand the facility, relocate to a larger facility, or add facilities needs to be developed.  Pick faces in pharmaceutical are generally not the constraint, inventory levels drive capacity.  3PL operations provide flexibility, but at a cost.  Internal operations provide cost control.
  3. In-sourcing or Outsourcing – As market consolidation drives order size change, is it time for you to change strategies. The wholesale market has driven many manufactures to utilize 3PL’s for case and pallet level distribution.  However, the benefit of direct distribution to the end customer has a price and every 3PL/wholesaler touch reduces margins/profitability.  Is it time to look at your consolidated products and re-evaluate in-house options to best service the market and reduce costs?
  4. Customer Incentives – Order-to-Cash value fulfilling large orders to major customers and wholesalers made perfect sense 10 years ago, today returns, expired product and market touch points are different, particularly on a global market by market basis.

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Five Customer Rules for 3PLs To Follow

December 20, 2016

By: David Latona3PL
Principal, Tompkins International

1 – Know your operations capabilities and limits.

Everyone thinks they can do it all, this is not realistic all operations have limitations in space, technology, equipment, human resources, and capital. Knowing these areas of strengths and weakness will better enable you to choose the right customer / partner, rather than shooting from the hip at every potential customer that crosses your path.

In Retail, Wholesale, eCommerce, Pick and Pack, Case Pack, Musical Runs, Blister Packs, Cross-Dock, Transload, Boutiques, Majors, Big Box, and Ship To / Mark For, apparel, footwear, hard goods, and food products, the customers are all different. The way in which you may want the information presented to you by your customer, the internal preparation, approach and methodology, physical execution, and finally material handling considerations are all essential components to happy customers and end users.  Keeping your customer beyond the initial term of the contract is the goal.  

Bottom line: Know what your team can do well and look for those customers that fit your model.

2 – Know your potential customer.

You might know the name of your potential customer via their national or global brand image. Beyond what the average consumer knows from mass media, what do you actually know about them?

Are they owned by a private equity firm(s)? Who has controlling interest? Who is the handler from the PE firm for this customer? How long have they owned the brand? What is their exit plan? When does it come into play (halfway into your contract)? How deep are they leveraged? What is their debt to earnings ratio? What is their long term strategy for the brand? How long has the senior management been in place? What is the background of the CEO, COO, and CFO?

These may appear to be invasive questions but all of this information speaks to the stability of your potential customer. Very few people saw the collapse of (fill in the latest bankruptcy) coming. Be glad you do not have a building full of products, no orders to process, and a bank regulator who now pays you.

What is the history with their previous provider? What severed the relationship? Who fired whom? Are they beginners to the 3PL world? Most brands are not prepared for the cultural and operational differences between running their own distribution vs. outsourcing. The issues that long tenured internal processes created, (but we have always done it that way) are always painful and the education can be very costly, for all parties.

Most of these behaviors are displayed in the way they handle the bidding process and contract negotiations. This is where a consultant can provide enormous benefit and value to both sides. Balancing industry standard processes and language with customer expectations and demands is not easy and usually the customer / brand need coaching.

3 – Do not skimp on vetting the information presented to you, correct data is the key.

Just because they give you a spreadsheet with some data points on it, does not mean it is accurate. Yes, you sent them your standard requests for information, annual units, order size, order profile, number of active and inactive SKU’s, and a list of customers etc., but how can you be certain it is accurate? You have to learn how to ask questions such as, an attorney in a deposition.

It is usually not enough to get information from the tech staff that runs reports. The VP of Operations may or may not have their head fully grounded in the day to day operations, potentially not knowing when something is amiss with the reports you received. You need to speak directly to the operators handling the orders. The account managers, supervisors, and routing staff who know the details and fix the daily issues and / or problems that arise.

Example: Your new customer’s focus is eCommerce, like everyone else, it is growing dramatically. Are all SKU’s available online? Are they planning on increasing the number of SKU’s? What is their S&OP plan for eCommerce? On what type of data are they basing their projected growth?

The VP of Operations will tell you they do not do much customization for their eCommmerce orders. Instead talk to a couple of packers on the floor and see exactly how many inserts, seasonal or otherwise, and dunnage materials are expected to be presented in the outbound carton. Every single time your associate touches something it costs you money, therefore define the process with the people who currently do it every day.

It is not enough anymore to simply pick, pack, and ship. You need to understand how they are operating and subsequently what potential growth and attendant obstacles are coming your way. You need to operate and behave every day as a true partner to your customer’s business.

4 – Design the material handling systems for maximum flexibility and scalability.

One size fits all, this is incorrect.  What works for one, does not necessarily work for another. The old rule of thumb was a minimum three or five year contract with your customer with automatic one or two year extensions. This is no longer the case. At Tompkins International we have seen the average contract go to two or three years with one year extensions.

Customers want flexibility and the ability to change, you should too.  They are looking for leverage at the two year mark to compare pricing, shop the network, and see that they are getting the best value for their money. This can mean a shorter CapEx repayment getting you ‘caught up’ sooner vs. later. No one wants to restructure their distribution center or fulfillment center every few years.

Larger volume customers may warrant a unit sorter or perhaps a shipping sorter, and these in turn can allow you to provide faster and more efficient (think less labor) services allowing your company’s bottom line to shine a little more brightly.

Nothing beats flexibility in the design. Take the time or hire an experienced consultant to determine the best configurations for this particular customer’s order profile. Then, examine how you can make it work for others with similar goods. Seasonal changes and reconfigurations to handle peaks are now normal.

5 – Panic early, when onboarding.

Well not exactly panic, do not wait until a potential issue becomes an actual future problem. We all have those instances where something is discovered in the process, a small delay in the material handling equipment installation schedule or perhaps in the merchandise transfer process; and we wait to see if it will work itself out. It usually does not. React quickly and make corrective actions to solve the issue that is going to be a problem in the following weeks.

Having meetings with all interested parties involved, either physically or via online, is important.  Address all of the issues immediately and put realistic contingencies in place.

I recently experienced a situation where a client was transitioning from one 3PL to another. The new 3PL suffered a small delay in their construction schedule that appeared not to be an issue, they did not tell anyone, content instead to work it out themselves. What they missed was the inbound containers, as well as, the inbound transfer merchandise impact, when considered together was enormous. Once everyone was made aware of the impending stoppage in two weeks due to space constraints, they changed gears and adapted. A disaster averted by the knowledge and collaborative efforts of those involved.

Onboarding a new customer to your business is always an exciting time. The sales effort has been successful. You are taking on a new partner in business and establishing a new and hopefully long-lasting relationship, both professionally and sometimes personally. Take the time up front to examine your own operations and the intimate details of your new customer. Yes, you need to sometimes walk away from ill-fitting partners. These are the hallmarks of a successful 3PL.

 

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Supply Chain Planning In the New Digital Era

December 8, 2016

By Gene TyndallDigital Disruptions
Executive Vice President, Tompkins International

Just as advanced supply chain planning was reaching for new heights, for example, real progress in expanding Sales & Operations Planning (S&OP) to integrated business planning, from functional process planning models to Advanced Planning Systems (APS), from simple data analysis to advanced analytics, and from network analysis to network designs for fulfillment, along comes the “big bang” of the Digital Era. 

Digital thinking and its components have only just begun to impact supply chain planning.  Yet, its business disruptions are more evident every day, as Amazon, and other online businesses have not only grown rapidly, they have rendered the traditional planning methods largely obsolete.  Demand planning, for instance, has been imploded by the dramatic gains in digital shopping that have exceeded almost all predictions made just a few short years ago.

Consider some of this year’s Thanksgiving holiday early results for consumer sales:

  • Black Friday: $3.34B (up 21.6% )
  • Cyber Monday: $3.39B  (largest online sales day in history)
  • Thanksgiving Day: up 14%
  • Holiday weekend: $9.36B (up 16.4%)

The results are expected to be up for B2B sales as well, over the November and December business season.

It is not difficult to realize that supply chain planning has to be more in tune with online sales and fulfillment.  The challenges for all companies whether, Retailer, Wholesaler, CPG, Industrial Products, or other are complex and, in fact, located in “uncharted territory,” as stated by an Oracle Executive.  This makes the design of practical “planning scenarios” as challenging as analyzing and ranking them by probabilities of occurrence.

As our CEO Jim Tompkins has spoken, blogged, and advised, digital disruptions are a major occurrence and all companies must get started developing their own digital strategies and roadmap for survival. 

The new challenge for supply chain leaders, then, is planning for the new futures and adapting to these at the same time, with speed, flexibility, and agility unlike any before.  It is time to plan for new operations strategies and models, those that rely more on demand sensors, cross-process collaboration, and digital integration, to formulate scenarios quickly, evaluate them rapidly, and execute on them effectively.  Concurrent planning and continuous planning requirements are finally here and must be applied now.  Terms such as “ecosystem”, “platforms”, and “customer centricity”, must become part of the planner’s every day vocabulary and mind-set.  Moreover, the several components of the Digital Era (Internet of Things (IoT), Social Media, Artificial Intelligence (AI), 3D Printing, etc.) must be understood well enough to consider their inclusion in supply chain plans.

Do not overlook the issues of transformation.  For the new supply chain plans to work, the execution process must be relentless and imbedded with continuous change management.  The underlying mind-sets of supply chain operators have to be transformed to the new Digital Era, or they will either resist the changes or revert back to yesterday’s comforts.

After all, supply chain plans have to recognize the likelihood of execution success, and mitigate the risks, or its planners will be lost in the chaos, where whatever can go wrong will. 

 

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Warehouse Strategy: Put Wall Systems

November 29, 2016

By Alex BarrioPut wall
Senior Project Consultant, Tompkins International

Supply chain professionals know that running a distribution operation comes with several well known challenges. These challenges can range from having to constantly improve labor efficiency and order accuracy, leveling demand and temporary labor during peak times, determining scalability in future product and growth and reducing lead times as well as implementation risk. Knowing how to efficiently affront these challenges helps you create a competitive advantage; it also helps to know that there is a technology available that can help you tackle all these challenges. Whether you run a simple pick and pack operation or run a highly automated distribution center, the Put Wall can be used in eCommerce or retail operations and can be fairly economical. A brief overview follows:

A Put Wall is basically a shelving system (fluid or static) outfitted with put lights. Each shelf slot, or tote, represents an order for an eCommerce customer or part of a store order in a retail operation. Totes are picked upstream, mainly batch picked, at active locations (pick modules or racks) and conveyed to the put wall area. Ideally, when using totes, this would be done through conveyor, but if there is no automation, pick totes would be palletized and transported to the put wall. Goods are then scanned using the put to light system and sorted into the slots / totes assigned to the orders in the wave assigned to the Put Wall (yes, goods are touched twice). Once an order is complete, as in all put to light systems, the light associated with the compartment / tote / order lights up on the back side of the shelf where a packer retrieves the goods / totes and packs it at a station. The packer then sends the order down a conveyor and on to a shipping lane.

Below are the reasons why Put Walls work well and help you with the challenges mentioned above:

  • RF scanners and lights are used to ensure accuracy. We all know this also depends on operator attention, but we also know it is an improved method over paper picking.
  • Shelving can be very easily reconfigured, even if your conveyor cannot, so that your zones are adjusted to your changing demand / number of employees.
  • Put zones can also be turned off / on and multiple lights can be used so that 1-4 operators can operate in the same zone.
  • Shelf spacings can easily be adjusted to allow for larger / smaller product to be handled. This goes for hazardous, high value or other product that for other reasons needs to be segregated.
  • A put wall area can be set up in several spots or in a large area which can shrink and grow as needed, making it easily scalable for future growth and peak demand.
  • Cycle times with Put Walls are improved because of the ability to have multiple put walls operating simultaneously. It takes less time to get a large number of orders completed.
  • Lastly, a Put Wall does not necessarily need conveyor or any type of specialized material handling equipment. At the very least, you will need static shelving, put lights and RF scanners to make it work.

In conclusion, be sure and give Put Walls reasonable consideration and research if you are in need of a strategy to help you deal with the peaks and valleys of your business, whether those peaks and valleys are in volume, cost, accuracy or cycle time.

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The Digital Age Is Affecting Everything

November 10, 2016

By Tompkins International StaffDigital Economy

Jim Tompkins, CEO, Tompkins International has just released his newest thought leadership video Supply Chain Revolutions: Responding to Digital Disruptions along with The Survival Guide to Digital Disruptions white paper.  Tompkins continues to shape and grow the supply chain industry through innovative ideas, insight, and intelligence.

Throughout the video Tompkins explains the importance of understanding how digital disruptions are affecting companies supply chains.  Also, explained is what needs to take place to respond to these disruptions.  With the use of graphics, quotes, data, and proven results, Tompkins makes it clear why businesses must become digitally capable in order to achieve profitability.  

Tompkins addresses how humans have evolved over a long period of time and the implications this has on us today.  First, measured in thousands of years during the agricultural era, to hundreds of years during the industrial era, and finally to tens of years during the digital era.  With today’s technology advances humans are running to stay current.  Since the year 2000 computing has gone from, calculations and doing mathematics, to communications and connecting people, in ways we could only have imagined 15 years ago.  The digital era has accelerated the pace of life, the pace of innovation, and the growth of the digital economy and digital commerce. 

The digital economy is defined as the far reaching expansion of technologies into businesses and services.  The new economy of how people, businesses, and governments work, interact, and prosper has changed.  “The term ‘Digital Economy’ was coined in Don Tapscott‘s 1995 best-seller The Digital Economy: Promise and Peril in the Age of Networked Intelligence.  The Digital Economy was among the first books to show how the Internet would change the way we do business,” Wikipedia.

Digital commerce is defined as a subset of the digital economy that changes the economics of demand and / or supply.  It encompasses the entire product and service life cycle and impacts all trading partners of global supply chains, not just buying and selling.  Companies must have the ability to market, sell, and serve through digital means.

A Brief History of the Digital Era:

1930’s-1950’s – Rise of service sector, invention of computers.

1950’s-1990’s – Use of computers for computing.

2000-today – Use of computers for communicating.

There are a number of companies that have used digital means to separate themselves from other companies.  The greatest disruptor of them all is Amazon.  Amazon is capturing market share, growing 30% a year in the U.S., and rapidly expanding its network for direct to customer fulfillment.  Amazon is doing this with a focus on harnessing the growth in digital communications and data.  Companies in many industries are feeling the impact of Amazon on their business and are struggling for a solution to keep pace.  Amazon has quickly gone from the “Everything Store” to the “Everything Company.”

Digital disruptions are taking place in all industries and in all locations.  We are all facing challenges in the Digital Age.  Digital is a global phenomenon.  Countries such as, Singapore, Switzerland, Hong Kong, U.S., Korea, New Zealand, and Ireland are leading the way with the development and momentum in the use of digital technologies.  Countries gaining momentum in the use of digital include: India, China, Brazil, Vietnam, Malaysia, Thailand, Mexico, and South Africa.  Your competition can come from anywhere at any time.  “Americans using digital means for commerce include 72% of all American adults, 89% of all American college graduates, and 94% of all American high household incomes,” Pew Research Center.  The focus is on the young and around urban population centers.

Due to the continued disruptions, a company’s supply chain must be capable of responding to competitors digital capabilities in the Digital Age. Now is the time for you to have a supply chain revolution, responding to these disruptions.

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  • All of the information in this blog is the result of Tompkins International's research of public information. There is no information presented that comes from any proprietary source. Tompkins International does not discuss information about their clients unless that information has been published.