Creating Supply Chain Excellence

The Tompkins International Blog

Yahoo Yard Sale: Finalized With Verizon

July 25, 2016

By Jim TompkinsYahoo Yard Sale
CEO, Tompkins International

Verizon has acquired Yahoo. This acquisition cost Verizon $4.8 billion. This price includes Yahoo’s core business. Yahoo shareholders still have an estimated $31 billion in investments in Alibaba. In addition, there are also investments in Yahoo Japan and a small portfolio of patents remaining. 

As I stated on June, 9 2016, Verizon acquired AOL, Inc. last year and by adding Yahoo, Verizon could move further into the digital advertising business. For Verizon, buying Yahoo would be consistent with its new mobile and video strategy. This relies on offering free content and monetizing it through advertising. Verizon considers Yahoo to be the one way ticket to valuable ad technology. Many think that Verizon is interested in utilizing Yahoo’s live-streaming video technology in order to increase the data usage of its nearly 103 million wireless customers.

The “Verizon play” is to merge Yahoo with AOL and create the number three platform for online advertising after Google and Facebook. With the Yahoo deal, Verizon will be able to offer more robust services to Verizon customers and advertisers. This is very interesting considering Yahoo considered buying both Google and Facebook in the past.

In the end, this will bring a huge amount of content: news, sports, and finance to Yahoo’s one billion monthly visitors.

It has been interesting watching this deal unfold and writing about the “Yahoo Yard Sale” over the last several months. As I have stated, “a deal is anticipated to take place this summer. Watching how the businesses unfold will be amazing. I anticipate the outcome of these events to have major impacts on eCommerce in the United States and crossborder. It will also create major transformations in supply chain logistics.”

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Yahoo: Many Moving Parts, But Missing the Structure

July 21, 2016

By: Jim TompkinsYahoo
Tompkins International

Fifteen years ago Steve Jobs asked the question, “Is Yahoo a technology company or a content company?” Ten years ago Yahoo was unable to answer the technology vs. content question. Four years ago Marissa Mayer joined Yahoo and without answering the question began a journey of acquisitions and a massive overhaul of Yahoo.  July 18, 2016 Yahoo shared their latest quarter’s financial statement. Not a good report, as revenues for the second quarter fell 15% and operating profit fell 64%. Based on these results and the last six months of the “Yahoo Yard Sale” many believe the July 18 financial statement was the beginning of the end for Yahoo. Many are offering opinions on various things that were done or were not done to result in the sad demise of a business that at one point was viewed as the “Best of the Best.”  The opinions being voiced include: executive turnover, activist shareholders, declining revenues, poor cost control, the prolonged Yahoo yard sale, etc. These are not the cause of the demise of Yahoo, but, rather the symptoms that indicate the demise of Yahoo.

It is important to ponder the loss of Yahoo magic, but it is not surprising. I stated in a presentation last week in New York City, “The demise of Yahoo is not unsurprising, it was predictable.” I went on to explain, to the group of retail executives, that strategy must always come before structure and structure must always come before implementation.

The basis of all successful businesses is Strategy-Structure-Implementation (SSI). The basis, the cause, of the demise of Yahoo is the failure to execute on SSI. For the last ten years at Yahoo we see structure and implementation, but no strategy. At the highest level a strategy must answer the question, “What business are we in?” This goes right back to the Steve Jobs question, “Is Yahoo a technology company or a content company?”  This question still has not been answered.  Why are people surprised that this great company will soon be selling its assets and becoming a footnote in the history books of content companies or should they be in the history books of technology companies?

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Learn. Supply Chain Leadership Forum 2016.

July 14, 2016

By Tompkins International StaffSupply Chain Leadership Forum 2016

We are less than two months away from the premium Tompkins International Supply Chain Leadership Forum 2016 (SCLF). We want to provide some more exciting details about the SCLF being held in Minneapolis, Minnesota August 29th through August 31st. 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; allowing all to connect, share, and learn.

International supply chain thought leader Jim Tompkins will be our keynote speaker. Sharing his views on supply chain excellence, what you need to know to make your supply chain even more competitive in 2016 and moving forward.

Learn from Jim Tompkins the difference between:

  • Changing a Company
  • Transforming a Company
  • Reinventing a Company

Also, learn about the 4C’s of supply chain change, transformation, and reinvention:

  • Consistency
  • Cost Effectiveness
  • Customer Service
  • Continuous Improvement

Jim Tompkins was selected as the 2015 Frank and Lillian Gilbreth Industrial Engineering Award recipient by the Institute of Industrial Engineers, IIE. Two years ago he released The Alibaba Effect video that has been viewed by over 350,000 people and has helped introduce the world to ecommerce. Most recently, he released Respond To The Titans video discussing the importance of the Titans’ supply chain logistics and why a business must respond to Alibaba, Amazon, and Walmart by creating a competitive supply chain strategy.

Registering for the Tompkins International Supply Chain Leadership Forum 2016 is easy, we hope you will join us to connect, share, and learn together.

Please contact Patty Trocchio at ptrocchio@tompkinsinc.com for registration information.

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Tompkins International Recognized as 2016 Great Supply Chain Partner

July 7, 2016

By Tompkins International Staff Great Supply Chain Partner

The entire Tompkins International team has recently been recognized by SupplyChainBrain.

SupplyChainBrain has released their 2016 Great Supply Chain Partner list; Tompkins International is honored to be included in the list of 2016 Great Supply Chain Partners.

“Each year, our list of 100 Great Supply Chain Partners features a select group of companies whose customers recognize them for providing outstanding solutions and services,” says Brad Berger, Publisher, SupplyChainBrain. 

“Over the course of our six-month online poll, we ask supply chain professionals to nominate vendors and service providers whose solutions have made a significant impact on their company’s efficiency, customer service, and overall supply chain performance.”  

“This year we received literally hundreds of nominations for solution providers in every aspect of supply chain management.” 

Tompkins International has been recognized for reliability, excellence, value, expertise, problem-solving, continuous improvement, support, positive attitude, global reach, and strong leadership. “We are happy to be recognized by SupplyChainBrain as a 2016 Great Supply Chain Partner. We are both a local and an international firm, experienced in all supply chain needs with no boundaries attached,” Jim Tompkins, CEO, Tompkins International.    

Stated by SupplyChainBrain: “this is our 14th year of celebrating 100 Great Supply Chain Partners. Tremendous growth and evolution over the years has been seen in the quality, quantity, and diversity of companies nominated for the “100 Great” award. According to loyalty and highly satisfied clients, Tompkins International has performed well.” 

In 2016 Tompkins International was also ranked top in Gartner’s supply chain report for, supply chain strategy development, supply chain network design, sales & operations planning (S&OP), and the logistics process with a focus on third party logistics (3PL). We were highly noted for wide geographical recognition including, North America, Western Europe, China, Japan, and the Asia Pacific region.

Our whole team here at Tompkins International is honored to be recognized by these two highly respected publications.

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Supply Chain Considerations with Brexit

June 30, 2016

By Gene Tyndall  Brexit
Executive Vice President, Tompkins International

Among the issues surfacing related to the impacts of the British vote to exit the European Union are questions regarding changes in supply chains, particularly by those owned by U.S. companies. Although the majority of immediate concerns has been driven by questions related to financial markets, as well as, of course, the political chaos occurring both in London and Brussels, business interests are also correct to be concerned.  After all, the original intent of forming the EU was the creation of the “Common Market” and supply chains have evolved in response to this goal.  Inasmuch as the U.K. and the U.S. are primary trading partners, let’s consider how U.S. companies supply chains will be impacted should the exit be final. 

Business supply chain impacts raise questions around BUY (purchasing), MAKE (where to produce), MOVE (freight), DISTRIBUTE (get to customers), and SELL (who buys, how, and why).  Our initial estimates should be considered near-term (what to expect now) and over time (what to expect as the exit plays out). 

First, we should acknowledge that supply chains have many components:  customers, suppliers, operations strategy, products and markets, physical, business processes, technologies, people/skills, and capital investment.  They also have implications for domestic business as well as international (cross-border) business.  Further, there are domestic companies or business units that operate within the U.K. and MNC’s that either sell or source within the U.K.   

One of the key business concerns, especially impacting supply chains, is uncertainty and/or risk.  As EU leaders debate the timing of the exit, the next 3-4 months are very likely to produce “profit warnings” due to the considerable uncertainty.  This will especially be true for those companies that rely on international sourcing, or sell a high percentage to the British population, or British companies that rely heavily on EU markets.  The uncertainty around the timing and necessary modifications of Trade Agreements, Customs Laws, Duties, and Tariffs, will impact sourcing, transportation, and distribution.  

MNC’s that operate in the U.K. (or England) will be impacted through their supply chains with respect to any goods that are imported or exported.  Moreover, those that have their European HQ in England will need to re-assess their locations.   

Those that manufacture products in the U.K. – automotive, for example – will be impacted by the sourcing of components (global sourcing means importation), as well as the exporting of finished vehicles. 

The selling of products (SELL) has experienced substantial growth in e-Commerce. For domestic sellers, other than the cost of goods, very little supply chain impact will be seen on online ordering.  For those selling international goods, however, the costs of cross-border goods will be impacted.  

Other than the costs of goods sold, we should not expect high levels of negative impacts on consumer goods and pharmaceuticals.  Consumers are the key to economic growth, and the demand for competitively priced products normally results in meeting the needs, in one way or another. But, for those companies that have Euro-market Distribution Centers located in the U.K., there will be serious questions about inventory locations.  Moreover, there are numerous other product categories that will be impacted, and perhaps seriously. 

In the near term, we are advising client companies to begin to plan, and expand monitoring and tracking, and even start re-designing Logistics Networks.  We also advise, though, to not take hasty actions about investment, or disinvestment, until more is known about the timing of the exit and its ramifications.  Planning for contingencies – such as that associated with Supply Chain Risk Management – is the right action now.   

With respect to overall supply chain strategy with Brexit, therefore, our advice for client companies is to think, question, and plan for when the exit changes are implemented.  Capital investment or disinvestment, in the U.K., should be postponed until made necessary by the new Trade Agreements, Customs Laws, Duties, and Tariffs that impact the company’s supply chains within the country.      

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How to Lead Change with Minimal Resistance

June 23, 2016

By Bruce TompkinsLeadership
Partner, Tompkins International

Leading change is not easy. One of the difficulties is gaining support from staff members. Communicating the rational for change and repeating your message is important in order to gain staff support.

The first step is to begin on a positive note and be convinced yourself that the change is for the best.

  • The leader must have the courage to deliver bad news.
  • Given that people in general remember negative events best, the leader must be clear, concise, and communicate positives as well. Negative or critical comments become the focal point.

Leaders must acknowledge mistakes and accept accountability.

  • This builds trust as staff understands the notion that we cannot be right all of the time.

Ask questions, instead of orders.

  • This helps to engage staff and let them be a part of the change.
  • People do not like being ordered around, particularly when facing a major change.
  • Open communication and real conversations regarding the impacts of the change is necessary.  

Praise and encouragement are keys to tackling change.

  • When giving praise, be genuine and sincere, deliver praise as soon as possible, make it specific, and do it publically if appropriate.
  • When communicating with staff during a change, provide encouraging words. Show that you believe in your staffs’ capabilities and focus on what motivates them.

Expectations are challenging during a period of change.

  • Leaders must get people to believe they can change and chances are they will.
  • Give staff a reputation to live up to.

Leading change is difficult; it takes time, effort, and good communication. It is a learned skill therefore; improving your capabilities is possible. Most staff members want to do the right thing although, there are times staff needs a push in the right direction. If you fail in your attempt to lead a successful change, learn and try again.

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eCommerce Fulfillment: Where Is It Going?

June 16, 2016

By Bruce TompkinseCommerce Fulfillment
Partner, Tompkins International

Revenue from eCommerce is growing rapidly. Today, eCommerce typically makes up 10-15% of revenue for retailers. This is great news, even if you are a brick & mortar firm,  eCommerce also leads to in-store sales. Even Amazon has recently opened its own brick & mortar store in Seattle. The retail giant understands that in order to be successful in retail you must create a seamless experience for customers, both online and in stores.

Tompkins International conducted a December 2015 survey in which retailers and consumer-packaged-goods companies made up 74% of respondents, with normal distribution of companies by size (in revenue) from less than $250 million to over $25 billion. The survey found that over 66% of companies do not use Amazon for selling and fulfillment purposes. However, we at Tompkins International see more and more companies turning to Amazon for selling and fulfillment.

As of December 2015, SKUs available only online still represented 23% of all SKUs and a surprisingly large percentage (25.1%) of SKUs are only available in stores. This being said, nearly 50% of SKUs are available online and in stores and 45.2% of survey respondents predicted that the number of available online and in-store SKUs will increase.

The bottom line: eCommerce is trending significantly up, which provides an opportunity for those who are ready for the challenge. eCommerce success largely depends on marketplace traffic. In the U.S., that may mean Amazon, unless other alternatives are explored. The data shows that many companies have a lot of work to do to be competitive in the online market. eCommerce is here to stay and retailers need to make use of this opportunity immediately.

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Warehouse Replenishment: Friend or Foe?

June 9, 2016

By Greg KreisWarehouse Replenishment
Principal, Tompkins International

Nobody likes replenishing pick locations.  It is a non-value added task that occupies labor and equipment resources without directly benefiting the process of completing orders.  Let’s not even talk about case replenishment which creates an additional touch for each case.  Actually, I think we should talk about it.

All too often we visit prospective clients who have made the decision to limit replenishment to pallet quantities or not replenish at all because it is viewed as a waste of resources.  However, willingness to increase replenishment means a decrease in the size of pick locations which translates into reduced travel distances for order selectors.  What is the right set up for your operation? That depends.

Let’s look at a simple example to illustrate the type of evaluation that is necessary to make the right decision.  We have 100 items that each ship 6 order lines per day (600 lines per day total) which equates to 1 full case per item per day.  The product can either be picked from pallet locations or carton flow.

Scenario #1

  • Pallet pick locations are 4’6” wide each for a total pick path length of 450 feet
  • In a set up such as this each operator can pick about 75 lines per hour so it would require 8 hours to pick the orders
  • There are only 4 pallets to replenish each day at a rate of 10 pallets per hour which will only take 24 minutes or .4 hours
  • The total man-hours required to pick and replenish in this scenario is 8.4 hours

Scenario #2

  • Carton flow locations are 12” wide stacked 4” high so the total pick path length is 25 feet long
  • With this picking arrangement an operator can pick about 200 lines per man hour which results in about 3 hours to complete the orders
  • Replenishment of the 100 cases is done at a rate of 35 cases per hour for 2.9 hours
  • The total man-hours to pick and replenish in this situation is 5.9 hours

You can see with the examples above that using carton flow pick location and replenishing in case units can result in a reduction of man-hours.  While, this is not always the case, it is certainly worth considering when deciding which type of operation you will use for the next 5 to 10 years.

The moral of the story is, sometimes tasks that look cumbersome or create extra touches can actually benefit the overall operation.  Replenishment of pick location is one of those tasks.

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Should China Be Its Own Network?

June 2, 2016

By Jim SerstadChina
Managing Director, Asia, Tompkins International

It is common to treat China as an independent network in distribution network design. However, this approach should change.

Given the size and complexity of China, it seems reasonable to optimize it as an independent network from inbound port to customer. However, as China becomes more inter-connected with the rest of Asia, it is no longer so simple. There are more nodes that connect China to the rest of Asia, which means more opportunities for cost savings and lead time improvement.

The reasons project teams treat it separately are often very practical: project scope and timeline, data availability, and sometimes simply because the project budget owners are China-based managers. Setting aside these reasons, consider how China should ideally be viewed in the context of an Asian network. Multiple port alternatives, cross-border ground transportation, and free trade agreements should all be considered.

Multiple Ports of Entry. The argument for multiple ports includes risk mitigation – as the Tianjin port explosion reminded us – and the savings generated by ocean versus ground shipment. It might be preferable to ship by ocean directly to a northern port than by ground from, say, Shanghai. This argument will inevitably occur between APAC freight managers, who want to avoid breaking shipments, and China distribution managers, who want to reduce their domestic transportation cost. The answer is not always easy, multiple ports should be investigated. The selection of ports is inherently tied to the overall Asia network, if not the global network. Inbound freight cost and lead time needs to be part of the decision.

Ground Transportation. As sourcing migrates out of China, there is an increasing opportunity for ground transportation from southeast Asian sourcing countries back into China. With truck transportation being possible from Singapore into China, southeast Asia could be included in the same network with China. For shorter distances or for time-sensitive goods it might make sense to consider ground transport. In particular, Hong Kong and Macau will be increasingly integrated with the Pearl River Delta region. Improvements, such as the Hong Kong-Zhuhai-Macau bridge, scheduled to open in 2017, should provide further incentive to investigate savings and lead time improvement in the region.

Free Trade Agreements. Finally, the proliferation of free trade agreements and the implementation of preferential duties over the next several years are breaking down some of the barriers that typically separate markets in Asia. If your company has an Asia distribution center in certain countries such as Singapore or Malaysia, then store-ready orders could be picked there, while still achieving preferential duties on many goods. This works because the China-ASEAN FTA allows for back-to-back certificates of origin for goods from ASEAN countries, though in most cases you will need to specify the destination country at the time of shipping from the country of production. Nevertheless, this significantly reduces the number of lanes which need to be direct-shipped from vendors in order to get preferential rates. 

Considerations of multiple ports, increased cross-border ground transportation, and, free trade agreements, China network design should be well-integrated with the rest of Asia. If your Asia network is due for an update, which is probably is, Tompkins International is ready to help.

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Share. Supply Chain Leadership Forum 2016.

May 26, 2016

By Tompkins International StaffSupply Chain Leadership Forum

We are less than four months away from the premium Tompkins International Supply Chain Leadership Forum 2016 (SCLF). We wanted to provide some exciting details about the SCLF being held in Minneapolis, Minnesota August 29th through August 31st. 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; allowing us to connect, share, and learn.

Quality content and speakers make all the difference at an executive forum. The SCLF provides both with leading experts on relevant supply chain hot topics, enabling all attendees to connect, share, and learn together.

International supply chain thought leader Jim Tompkins will be our keynote speaker. Sharing his views on supply chain excellence, what you need to know to make your supply chain even more competitive in 2016 and moving forward.

Leaders from the following organizations will be presenting throughout the forum:

  • 3GTMS
  • CH Robinson Worldwide
  • Dominos
  • Grand Junction
  • GT Nexus
  • Hallmark Cards
  • JDA
  • University of Wisconsin E-Business Consortium

Also, speaking and attending will be our leadership team from Tompkins International.

Topics will fall under three general tracks:

1 – Supply Chain Strategy, Planning, and Talent

2 – Transportation and Networking Optimization

3 – Distribution and Fulfillment Centers

Registering for the Tompkins International Supply Chain Leadership Forum 2016 is easy and we hope you will join us to connect, share, and learn together.

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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.