SPECIAL SECTION WEB_CITE CITY comprehensive Transport & Logistics Web Directory
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THE MAGAZINE FOR DEMAND DRIVEN LOGISTICS
April 2009 • Vol. 29 • No. 4 INSIGHT INPRACTICE 6 CHECKING IN SaaS: A distribution model for READER PROFILE Mike Segal: The Paper Chase tough times? Mike Segal, director of logistics at Sappi Fine Paper North America, 8 DIALOG always keeps one eye on the weather. When you ship paper, water Readers talk back. damage is a constant concern. From his offi ce in Portland, Maine, Segal 14 HOW TO CLOSE THE oversees transportation and warehousing in a network that also includes SUPPLY CHAIN VALUE GAP fi ve regional distribution centers and several smaller facilities. KnowledgeBase sponsored by Panalpina USA, Inc. CASEBOOK GoodSource Finds Instant Gratifi cation 24 IT MATTERS Carlsbad, Calif.-based third-party food distributor GoodSource Solutions’ How e-commerce retailers can build consumer loyalty. new technology serves up its broker’s freshest rate quotes, without the need for phone calls or emails. 26 VIEWPOINT Finding new value in truck leasing. INBRIEF INDEPTH 10 10 TIPS EXCLUSIVE RESEARCH IT Perspectives 2009 Initiating an effective inbound program. Logistics information technology represents an investment, a risk, a market neutralizer, and often a competitive differentiator. Based on our in-depth market survey, Inbound Logistics’ IT Perspectives 2009 presents a panoramic view of the technology sector, framing trends and developments that impress businesses to focus technology investments and applications in new lights. Top 100 Logistics IT Providers 17 TRENDS An improved supply chain helps With so much logistics technology variability, and solution partners to pick Walmart broaden its appeal… from, shippers need to be calculating in fi nding a deployment that best U.S. intermodal growth keeps meets functionality and cost requirements. Inbound Logistics’ annual Top tracking…Identifying the states 100 Logistics IT Providers is a good place to begin. with the highest cargo theft rates… The Northeast’s Patriot Corridor gains approval.
2 Inbound Logistics • April 2009 YOU NAME IT
We’ll Customize A Supply Chain Solution For It Whatever you manufacture or wherever you store and distribute your products, Ryder’s end-to-end supply chain solutions are designed to fit perfectly with your company’s unique needs. Unmatched experience, flexibility and innovative thinking. This is what we offer to hundreds of companies, from electronics and car makers to consumer product and aircraft manufacturers. We can do the same for you. Call 1-888-88-RYDER or visit www.ryder.com.
SUPPLY CHAIN, WAREHOUSING & TRANSPORTATION SOLUTIONS
©2009 Ryder System, Inc. All rights reserved. SNAPSHOT: PLASTICS page 55
THE MAGAZINE FOR DEMAND DRIVEN LOGISTICS
April 2009 • Vol. 29 • No. 4
INBRIEF INDEPTH 21 GLOBAL LOGISTICS Economic uncertainty creates Internal Collaboration: A Bright Idea a sea of confusion in the ocean Leading companies are plugging into current economic volatility to shipping industry… Volkswagen de-bugs RFID… Wincor Nixdorf collaborate not just within supply chain departments, but across the opens DC nexus in Singapore. entire enterprise. 74 NEW SERVICES SNAPSHOT: PLASTICS 76 TECH UPDATE Remolding the Supply Chain 128 LAST MILE: MODAL TUNING In the face of a recession, plastics companies recognize the importance of effi cient transportation and supply chain management. INFO Fit to Print: Bar-Code Printer Guide 79 SPECIAL ANNUAL DIRECTORY: Increasingly, businesses of all types are WEB_CITE CITY fi nding ways to streamline operations This compendium of leading transportation and technology and reduce costs by implementing sites makes searching the Web bar-code technology for data collection for logistics solutions a snap. and product tracking. To help narrow down your options, we feature some top 124 CALENDAR models from the leading manufacturers in specialty printing solutions. 125 CLASSIFIED 126 RESOURCE CENTER
7 88581 4 Inbound Logistics • April 2009 Select your service level. Tender your shipment. Fasten your seatbelt and prepare for a great experience.
You’ll notice the difference long before your shipment leaves the ground. We’ve developed proactive. communication tools. Provided increased visibility for tracking and rates. Enhanced our products. Improved the overall experience. Why? Simple really. We may have 3400 fl ights every day around the. globe. But only one true destination. Your satisfaction..
AACargo.com CHECKINGIN
Vol. 29, No. 4 April 2009 THE MAGAZINE FOR DEMAND-DRIVEN LOGISTICS www.inboundlogistics.com STAFF
PUBLISHER Keith G. Biondo by Felecia Stratton | Editor [email protected] EDITOR Felecia J. Stratton [email protected]
SENIOR ASSOCIATE EDITOR Joseph O’Reilly [email protected]
ASSOCIATE MANAGING EDITOR Catherine Harden SaaS: A Distribution Model [email protected]
CONTRIBUTING EDITORS For Tough Times? William Atkinson • Dan Calabrese • Merrill Douglas John Edwards • Lisa Harrington • Robert Malone he lead article in our annual technology issue 15 years ago featured Dan McCue • Amy Roach Partridge • Deborah Ruriani
Barbara Barnhill, transportation supervisor for Elizabeth Arden. She CREATIVE DIRECTOR Michael Murphy T excitedly shared the details of her company’s “revolutionary” inbound [email protected] transportation program, which racked up million-dollar savings by using the SENIOR DESIGNER Mary Brennan latest technology – a fax machine. [email protected] Times have changed since the fax machine and its dial tone were the technol- PRINT/WEB PRODUCTION MANAGER Shawn Kelloway [email protected] ogy of choice. Today it’s logistics IT tone driven by Software as a Service (SaaS). PUBLICATION MANAGER Sonia Casiano The popularity of subscription-based technology services is fast changing the [email protected] ability of business logistics managers to inexpensively cope in these times of sup- CIRCULATION DIRECTOR Carolyn Smolin ply chain strain. SaaS provides companies with power and fl exibility, without a large capital investment. And, like a dial tone, SaaS is there when you need it. SALES OFFICES While some solution providers explore value-added services to capture more PUBLISHER: Keith Biondo (212) 629-1560 • FAX: (212) 629-1565 consistent revenue fl ow and keep customers from moving on to the next, newest, [email protected] IT offering, technology investment is still becoming less like a traditional capital WEST/MIDWEST/SOUTHWEST: Harold L. Leddy expenditure and more like a contractual expense. Scalability, facility, and speed (847) 446-8764 • FAX: (847) 446-7985 of use allow software buyers to engage and disengage at will. Consequently, IT [email protected] solutions providers grapple with the challenge of engendering long-term buy-in Marshall Leddy (763) 416-1980 • FAX: (763) 201-4010 for a delivery mechanism that fl aunts short-term appeal. [email protected] Our annual logistics IT research study (IT Perspectives, pg. 29) bears this out. MIDWEST/ECONOMIC DEVELOPMENT: Jim Armstrong “We’re seeing increased demand for a complete software service solution,” reports (815) 334-9945 • FAX: (815) 334-1920 one IT vendor. “Customers want not only the IT solution, but a higher level of [email protected] support, new development, customer service, and a variety of pricing/payment SOUTHEAST: Gordon H. Harper options.” This singular sentiment refl ects near-unanimous agreement among sur- (404) 350-0057 • FAX: (404) 355-2036 [email protected] vey participants that “technology service” is a phenomenon with staying power. MOBILE, AL: Peter Muller Further proof: 89 of this year’s Top 100 Logistics IT Companies (pg. 38) offer on- (251) 343-9308 • FAX: (251) 343-9308 demand, Web-hosted solutions; this represents a double-digit spike over last year. [email protected] But SaaS is not without its limitations. The robustness, long-term economy, NORTHEAST: Rachael Sprinz and security of home-grown legacy systems are “must-haves” for some IT buy- (212) 629-1560 • FAX: (212) 629-1565 [email protected] ers, regardless of initial investment and operational ease. Notably, 65 of the Top 100 Companies offer both local and hosted solutions, while 11 target this niche FREE SUBSCRIPTIONS alone. Technology’s value is equal parts functionality and accessibility. An on- www.inboundlogistics.com/free
demand solution deployed without a targeted demand, or a dial tone without a Inbound Logistics welcomes comments and submissions. number to dial, leaves companies on the hook with a bad IT connection. Contact us at 5 Penn Plaza, NY, NY 10001, (212) 629-1560, Fax (212) 629-1565, e-mail: [email protected]. Market and end-user scalability defi ne today’s best-of-breed solution providers. For advertising, reprint, or subscription information, call (212) These merits also defi ne our technology issue. IT Perspectives identifi es where user 629-1560, or e-mail [email protected]. Inbound Logistics is distributed without cost to those qualifi ed in North demands are trending; the Top 100 Logistics IT list dials up companies deemed America. Interested readers must complete and return the best to meet diverse shipper needs; and our online IT Decision Support Tool qualifi cation card published in this issue, or may subscribe online at www.inboundlogistics.com/free. Subscription price to helps connect demand pulses with solution provider dial tones. others: in North America: $95 per year. Foreign subscriptions: As always, we welcome your feedback. Shoot us an email, pick up the phone, $129. Single copy price: No. Amer. $10, foreign $12, back issues $15. Periodicals postage paid at New York, NY, and additional or if the urge strikes, send us a fax – it’s there if you need it. ■ mailing offi ces.
6 Inbound Logistics • April 2009
DIALOG LETTERS TO THE EDITOR
wanting and buying cars. By the Obama Putting a Cap on Cap and Trade Administration’s own estimates, even if Publisher Keith Biondo’s Checking In column on cap and trade (Speaking Truth we put pinwheels all across America, we to Power, March 2009) evoked a large volume of responses, both in support of his won’t offset our own output, much less 10 opinion and against. Here’s a small sampling of each: million non-eco-friendly cars. That’s just one carbon tick point. There are others. I was shocked that a publisher of that pie, let’s put nuclear waste into Another criticism was that my column a magazine would take a stand and the ground with the rest of the world’s was political and not appropriate for a trade encourage others to act. problems. magazine. I’ve been writing about energy Your column was excellent. Dropping I believe that we, as Americans, should for 20 years, and studying energy policy our tax rate, not boosting it with cap lead by example and start the world for an even longer time. Cap/trade isn’t and trade, would increase manufactur- heading in the right direction. You, dear a political issue. Democrat, Independent, ing in the United States while polluting sir, should spend the rest of your life Republican, liberal, moderate, conservative, less. The short-sighted environmental- with the nuclear waste you wish to bury. oblivious — cap and trade will touch us all. ists can’t seem to see beyond our own There is probably plenty of room there Over the past 40 years, the government borders. Do anti-domestic drilling envi- for you and all the money you’ll save if abrogated its responsibility to provide ronmentalists think Venezuela, Saudi we push back on the current administra- cheap, low-carbon power to its citizens and Arabia, or Russia will drill greener than tion’s efforts to improve the planet. now it wants to balance the global carbon the United States? Pete Charriere, books on the backs of millions of U.S. blue- David Brown, Ex-reader collar workers? Founder, Waterbear People in the media, like me, have the KEITH BIONDO REPLIES: One criticism access, resources, and time to study issues It is upsetting that someone with your of my column was that cap and trade is not such as cap and trade, and inform those of stature would suggest “just sticking rods” about logistics. But it is. You can spend your you who have to work for a living. I stand (nuclear waste) in the same place as the time eking out drops of effi ciency — save a by my opinion: Cap/trade is a destructive rest of it. That happens to be one of nickel here or use the latest technology to way to change carbon behavior any time, the most ill-conceived and uneducated save a dollar there — only to have all those and given current circumstances, certainly things I have heard in a very long time. efforts washed away in a cap and trade not now. Two thirds of the world’s carbon prob- tsunami. The government ought to be incenting lem is due to the burning of fi nite fossil Other points to consider — automaker behavioral changes, not dis-incenting or fuels. And these same fuels “fuel” war Tata recently introduced the $2,000, fi ve- destroying the manufacturing class and that costs money to fuel. So we should seat Nano in India, and China’s auto sales the worker class that supports it. just spend all our sweat equity on gas for surpassed the United States for the past Don’t take my word for it. I urge you to our cars so we can go to work and get three months. We are looking at 10 million get informed quickly. Then reach out to taxed to pay for more expensive fuel due new carbon-producing cars coming online your elected representatives, the media, to the wars we are paying for? in the next decade, but not in the United and your peers, and start speaking your Oh, and to put a cherry on top of States. You cannot stop those people from own truth to power. ■
8 Inbound Logistics • April 2009 Network
You’re the reason we’ve spent decades building deep-rooted connections across the transportation industry. With full access to one of the largest logistics networks in the world, you can use our resources and relationships to your advantage. The result? More options than ever before. And because our network reaches all continents, you can [email protected] | 800.323.7587 ship anything, anytime, anywhere. ©2009 C.H. Robinson Worldwide, Inc. All Rights Reserved. 10TIPS STEP-BY-STEP SOLUTIONS
by Deborah Catalano Ruriani
Initiating an Effective Inbound Program
ontrolling inbound shipments on-time pick-up, on-time delivery), excep- goods gives an organization the oppor- maximizes effi ciency and saves tion summary reporting, and customer tunity to control expenses. C money, but creating an inbound and supplier satisfaction metrics. program can be a daunting task. Gene Survey supplier technology capa- Nusekabel, transportation and logistics Classify and quantify current inbound 7 bilities. Make sure they have EDI industry marketing manager for Sterling 4 operations. Evaluate your current capabilities, and a supplier portal Commerce, Dublin, Ohio, offers tips for inbound shipments and classify by with a web form to provide “ready to getting your program on the right track. who controls the freight (prepaid or col- ship” information. Don’t underestimate lect), where the freight costs lie, and the amount of work required to “cleanse” Create a project team. Call on the whether the carrier is selected via a rout- the data from suppliers. 1 expertise of your procurement and ing guide. logistics representatives, and draw on Prioritize suppliers for quick results. each department’s need for specifi c cost Consider investing in technology. 8 In any project, delivering quick information to better manage the pro- 5 Transportation management solu- wins or payback should be a goal. cess. An IT member or advisor may also tions and business-to-business Prioritize your suppliers by ease of be a valuable addition. connectivity can provide both a system- implementation and largest payback. atic approach to your inbound processes Typically these are non-compliant col- Define the project goals. Decide and fi nancial controls. lect suppliers or new suppliers where 2 what you expect to accomplish you can infl uence the freight terms. when this project is completed. Is it Evaluate best landed cost by sup- to simply reduce costs, improve vendor 6 plier. To calculate best landed cost, Execute. Communicate the plan in relations, gain better inventory control, you must be able to allocate freight 9 advance to all involved parties, both create vendor managed inventory, attain charges plus fuel surcharges plus asses- internally and externally, to get their control over inbound orders, or better sorials to get the true picture of your buy-in to the process. Then implement utilize a dedicated fl eet? costs. Select a software tool to help you the targeted changes. rate and re-rate shipments based on all Determine key performance indi- available scenarios. Ask these questions: Measure/monitor compliance and 3 cators (KPI). Create a baseline or Does your organization really want to 10 performance. Share with your benchmark of current performance, take on the freight? If a supplier is larger suppliers how their performance and determine KPI, which might include than you, it may have better freight rates, will be measured. Establish routing supplier performance (order acknowl- but what is being invoiced in the cost compliance reviews with each supplier edge, order fi ll rate, ship on time), carrier of goods? This is where the visibility to and ensure data is available for analysis performance (accept shipment tender, freight costs segregated from the costs of by both parties at any time. ■
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CRST THE TRANSPORTATION SOLUTION READER PROFILE by Merrill Douglas
The Paper Chase
ike Segal always keeps one eye on the Paper North America, a division of Sappi Ltd., a weather. When you ship paper, water global company headquartered in Johannesburg, M damage is a constant concern. South Africa. “You need watertight equipment and good The North American business makes coated procedures for managing equipment integrity,” fine paper for magazines, books, print adver- says Segal, director of logistics at Sappi Fine tisements, and other high-end products at four mills in Maine and Michigan. From his offi ce in Portland, Me., Segal oversees transportation and warehousing in a network that also includes fi ve regional distribution centers and several smaller facilities. Although Segal mainly serves North American customers, he also oversees the domestic legs of Sappi’s international imports and exports, as well as customs and regulatory compliance. The Big Questions
What do you do when you’re not at work? My son plays three sports, so I’m on the board for football, coach basketball, and help with baseball. I’m also an avid dance recital attendee, in support of my daughter’s involvement in ballet. Otherwise, I hang out with my family, work around the house, and play golf when I can. Ideal dinner companions? My kids. They will be teenagers soon and getting on with their lives, so I don’t like to miss a chance for us to eat together as a family while we can. THE FINE PRINT What’s in your briefcase? As an engineer, I can’t go anywhere NAME: Mike Segal without an HP calculator. I have a stack of TITLE: Director of logistics, since 2006 business cards, a road atlas, some logistics magazines, and my laptop. I also carry a COMPANY: Sappi Fine Paper North America, Portland, Me. paper loupe — a magnifying glass used to PREVIOUS Intern, Scott Paper. Process/production engineer; manager, technical examine print jobs. EXPERIENCE: department, Potlatch Corp. Recovery superintendent; manager, utilities If you didn’t work in supply and recovery; manager of strategic improvements, Sappi Fine Paper chain management, what would North America be your dream job? I’d like to be a college professor, focusing on EDUCATION: B.S., Chemical Engineering, Pennsylvania State University, 1986; M.S. organizations and management. Engineering Management, University of Minnesota, Duluth, 2006
12 Inbound Logistics • April 2009 Third-party logistics providers handle leadership academy at Sappi, he joined sets of constituents. Sappi ships mainly day-to-day decisions at Sappi’s regional a project aimed at streamlining order to paper distributors, who look for a DCs and mills, but Segal and his team fulfi llment. high-value product from a responsive stay close to those operations. “We’re Those two forays outside his core vendor. But it also has to please the dis- interested in developing and maintain- discipline helped make Segal a viable tributors’ customers: end-users who ing direct relationships with carriers,” he candidate when Sappi needed a director order print jobs, designers who specify says. “We also want to understand why of logistics for North America. paper for those jobs, and printers who services cost what they do.” Segal strives to make it easier for cus- need the paper to arrive on schedule and An effort to understand the “why” tomers to conduct business with Sappi perform well on the press. behind the “what” gave Segal, a pro- by streamlining processes and the Meeting all those needs while driv- cess and production engineer, his fi rst network. His team seeks out process ing down costs – and keeping the paper taste of logistics at his company. A sup- improvements, plus continuous moves dry – isn’t easy. But Segal loves the chal- ply chain management class he took for and other smart routing opportunities. lenge of devising a plan and seeing it his M.S. in engineering management led Sappi’s efforts to simplify life for its succeed. “When you set a goal, then not Segal to examine Sappi’s transit times to customers are complicated by the fact only deliver on it, but exceed it, there’s particular locations. Five years later, in a that the company serves four distinct nothing better,” he says. ■
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April 2009 • Inbound Logistics 13 LOGISTICS knowledgebase © By Lucas Kuehner, Managing Director (pictured), in collaboration with Tim Hotze, Manager Logistics and Supply Chain Solutions Panalpina USA, Inc., [email protected] • www.panalpina.com
How to Close the Supply Chain Value Gap
hen it comes to IT investments in Supply within our SCM platform. This software platform fully supports the Chain Management, what you see isn’t physical fl ows of goods in the areas of Order Management, Transport always what you get (WYSIAWYG for short!). Management, Fulfi llment, Warehouse and Inventory Management. Studies indicate that there’s a huge gap Versatile reporting capabilities as well as KPI, Milestone and Schedule between what customers in various indus- Management are built-in. try groups perceive as required investments Technology management has become a prerequisite for the suc- Wand satisfaction with the delivered IT solution. Nevertheless, in today’s cessful reengineering of our clients’ supply chain sourcing process. competitive and vulnerable economy, it becomes crucial to fi nd the Users throughout the Supply Chain – suppliers, hubs, carriers, corpora- right IT platform to effi ciently share and manage information across tions and customers – have the ability to share information within one the supply chain. platform and this gives our customers detailed information to achieve Historic and forecasted information has become more and more this goal. As a fully web-enabled software solution, interfaces are important for modern SCM professionals. A striking illustration of this scalable and can be standardized to achieve plug-and-play concepts. is the recent fl uctuation in oil pricing which brought to mind once Panalpina’s IT platform provides companies with real-time visibility at again the vulnerability of entire supply chains to the impact of single all times. Robust event management and analytical tools are available. cost-drivers. The extreme volatility of fuel costs led to a revitalized dis- Entirely driven as a database-application, all fulfi llment data can be cussion over the advantages of near-shoring versus off-shoring. These extracted in various ways. This enables stakeholders to optimize supply types of evaluations are more accurate for those who have access to and demand chains and improve network setups and fl ows. thorough data vital to performing sensitivity analysis and developing In light of the logistics chain’s ever-evolving nature, it makes sense what-if scenarios that quantitatively prove their conclusions. for customers to outsource value-added activities. Stricter security and Panalpina believes that the global nature of Supply Chain sustainability requirements, paired with related regulatory and compli- Management requires the employment of at least two types of SCM IT ance concerns, are leading LSPs to enhance their service activities. solutions: SCM network and optimization tools and Global collabora- By acquiring and managing knowledge through effi cient and fl ex- tion platforms for Order Fulfi llment. ible design, Panalpina’s IT solutions afford our customers the luxury to Panalpina’s collaborative SCM platform as shown in Figure 1 acts focus on their core competencies. We take pride in knowing that once as our customers’ supply chain planning and execution arena. The they get a chance to experience Panalpina’s sophisticated collaborative scope of the application covers the autonomous and proactive man- SCM platform, our customers readily agree when we say: WYSIWYG*! aging, planning and controlling of all aspects of the purchase order *A play on the acronym, WYSIWYG (What You See Is What You Get), cycle. Customer bookings, transport planning, cargo reception and used in computing to describe a system in which content displayed during dispatch based on the agreed service levels can be executed from editing appears very similar to the fi nal output.
Supply Chain Stakeholders: Customers / Vendors / Buyers / Shippers / Consignees / LSP’s & LLP’s
Process Visibility & Purchase Shipping Dispatch Input 1 2 3 4 Reporting Orders (PO) Order (SO) Advise (ARN)
Panalpina’s Planning & Visibility & Reconciliation Reconciliation Collaborative Milestone Manage- PO Transport Cargo Receipt Reporting & SCM Platform ment Layer Management Management & Dispatch Mgmt Optimization
Process Output Work Consolidation Status & towards Customer PO Order Inventory Events or Panalpina OPS Status
Panalpina SCM/Logistics/Freight Operating System Suite
FIGURE 1: Functional Overview of Panalpina’s Collaborative SCM Platform. The Panalpina group delivers compelling and integrated Supply Chain solutions to our customers. Our SCM platform has been set up as a “global cockpit,” allowing for an effi cient supply and demand management covering the entire value chain.
14 Inbound Logistics • April 2009 WE GO THE DISTANCE TO SERVE YOU AND YOUR CUSTOMERS
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NEWS & EVENTS SHAPING THE FUTURE OF LOGISTICS
TRENDS
Walmart’s Sell: Less is More? hen consumer spending dips, few companies target high-income Wshoppers as a potential revenue stream. But few companies can walk in Walmart’s shoes, and the retailer has both attracted more con- sumers and convinced them to buy bigger-ticket items. With a fresh new logo to boot, Walmart chief operating offi cer, at a recent Morgan is cleaning up in more ways than one. Its Stanley conference. stores are assuming a leaner, sleeker look to Customer traffi c in U.S. Walmart stores capture consumer interest; and the company has increased among both higher-income is leaning out its supply chain to reduce the by Joseph O’Reilly number of items it stocks. In addition to streamlining SKUs, Walmart is attracting a new customer demographic. Higher-end consumers are buying a wider range of products from Walmart instead of simply loading shopping carts with low margin food and consumable items, said Bill Simon, the company’s U.S.
While most retailers are pricing down to attract thrift spenders, Walmart is looking to clean up with more high-end consumers.
April 2009 • Inbound Logistics 17 TRENDS ‹ CONTINUED FROM PAGE 17 and lower-income shoppers, he reported. Apple, and Samsung. demand. Walmart’s efforts appear to be But in a change from the past, more While Walmart may be appealing to a paying off in big dividends. The com- affluent consumers are showing a wider consumer demographic during an pany recently reported its strongest sales willingness to buy beyond the basics. economic slowdown, and perhaps set- in history during the fourth quarter, Walmart has gained credibility with ting its sights on post-recession ventures, with $108 billion in receipts. these selective shoppers by selling more demand for cheap groceries is still driv- But not all are convinced that the name-brand electronics such as Sony, ing its business. company’s success reaching out to In a filing with the U.S. Securities discretionary consumers is credi- F UP THE CHAIN and Exchange Commission in early ble. Wal-Mart Watch, an independent April, Walmart reported that groceries online ombudsman, cites a survey of PEOPLE ON THE MOVE accounted for 49 percent of its U.S. sales high-income shoppers conducted by a United Fresh Produce Association, a during the fi scal year that ended Jan. 31, third-party blogger that suggests other- produce industry trade association, has 2009, up from 47 percent a year before. wise. Regardless of opinion, it’s just what appointed Dan Vache ៓ as head of its new Simon said the retailer has improved the world’s largest corporation needs to supply chain, logistics, and technology its supply chain, allowing it to get fresh stimulate the buyer’s conscience – free program. He will fill the newly established produce into its stores faster to meet publicity, more or less. ■ position of vice president of supply chain management, leading the association’s efforts to deliver educa- tional, hands-on tools U.S. Intermodal Growth Keeps Tracking and direct services hen the chips are down, intermodal delivers in spades. U.S. shippers are to assist companies mixing modes to manage their supply chains more economically and throughout the fresh Wstatistics bear the proof. Domestic intermodal volume posted a solid produce supply chain. 2.9-percent overall gain in 2008 (see chart), according to the latest Intermodal Market Trends & Statistics Formerly vice president , a comprehensive intermodal volume data report published by the Intermodal Association of North America (IANA). of the sales-food division Although overall volumes declined slightly by 2.1 percent in the fourth at Sensitech, Vache has more than 30 years quarter, domestic container performance remained healthy through the end of experience helping companies manage the of 2008. While its overall growth slowed to 4.4 percent — less than half of Q3’s Q cold chain. Christopher A. Coughlin has gain — growth in 53-foot containers was an exceptionally strong 10 percent for been named president, process industries, at the quarter. the Timken Company, a global provider of On the global side, results are less positive. Intermodal volume declined friction management and power transmis- in every IANA region during Q4 2008; dropping a total of 11.1 percent and sion products. In his new role, Coughlin will continuing its steady decline for the seventh consecutive quarter. This lead the Bearings and Power Transmission quarterly loss contributed to the largest year-over-year drop of intermodal Group’s process industries segment and loadings — seven percent — since IANA began keeping quarterly records in 1998. be responsible for distribution and global International containers had been the main driver of intermodal growth prior to 2007 amid a soaring rise in container imports, based upon strong consumer supply chain management. He began his demand. career at Timken in 1984 in the company’s steel operations and has served in a variety Overall 2007/2008 Intermodal Volume Comparisons of management positions within the bearings 2007 2008 CHANGE business. Q Stuller, a prime manufacturer 2,145,466 2,060,399 -4.0 and distributor of jewelry and jewelry-related Trailers % products, has promoted Jay Jackson to chief Domestic Containers 3,598,006 3,849,327 +7.0% operating offi cer, fi lling the position vacated All Domestic Equipment 5,743,472 5,909,726 +2.9% by Charles Lein’s retirement. Most recently, ISO Containers 8,335,480 7,749,769 -7.0% Jackson was Stuller’s executive vice presi- dent of supply chain where he has managed TOTAL 14,078,952 13,659,495 -3.0% the company’s sales, supply chain, and manu- Even as the global economy tumbles, U.S intermodal use is climbing an upward arc. facturing operations for 13 years. Prior to that Domestic intermodal container volumes showed the strongest growth at seven he enjoyed a 30-year stint in Sears’ product percent, while all equipment posted a nearly three-percent gain. services division. Source: Intermodal Market Trends & Statistics, Intermodal Association of North America
18 Inbound Logistics • April 2009 NEWS & EVENTS SHAPING THE FUTURE OF LOGISTICS
It’s 10 p.m. Do You Patriot Corridor Gains Approval Know Where Your ne if by land. Two if by sea. Three if by rail? The Surface Transportation Board (STB) recently approved the joint control and ownership of Pan Am Cargo Is? OSouthern by Norfolk Southern Railway, Pan Am Railways, and the latter’s missing shipment is the last thing subsidiaries, which will enhance New England’s rail transport capabilities. Ashippers want to discover while Pan Am Southern will operate about 437 miles of track, including an east- turning over stones to cut costs. A recent west Patriot Corridor between points in New York and Massachusetts, and a study by LoJack Supply Chain Integrity north-south section between Vermont and Connecticut. Norfolk Southern illustrates the challenges businesses face plans to invest $87.5 million in the new operation for infrastructure upgrades securing supply chains. to improve traffi c fl ows and expand capacity. A total of 353 illegal and disruptive The STB — which imposed labor-protection and environmental conditions on the deal — determined incidents were reported in 2008, accord- that the “end-to-end” transaction and related oper- ing to customer data collected by the ational agreements would produce “substantial Forney, Texas-based security services transportation benefi ts” to the New England region. firm. Cargo theft (299) was the most “The transaction will not result in a substan- dominant activity. tial lessening of competition, the creation of a The small sampling identifi ed food monopoly, or a restraint of trade in freight surface as the most likely stolen cargo, account- transportation in any region of the United States,” The new Pan Am Southern ing for 13 percent of reported incidents, STB offi cials said in their decision, adding that an venture will operate 437 miles of track followed by pharmaceutical/medical upgraded east-west mainline route would signifi - between New York and and building supplies (both 12 per- cantly increase competition. Massachusetts. cent). The high percentage of building In May 2008, Norfolk Southern and Pan Am supplies thefts may be due to the rise in Railways announced plans to form joint venture Pan Am Southern and estab- copper prices and a lack of scrap mate- lish the Patriot Corridor, a 155-mile high-speed freight-rail route between rial oversight. Mechanicville and Ayer, Mass. The corridor will include 281 miles of Pan Am Also surprising is the fact that media Railway’s secondary and branch lines. came in at only one percent of incidents reported, suggesting shippers are doing a better job securing these goods and criminals are focusing elsewhere. ■
10 STATES WITH REVOLUTIONIZING ™ HIGHEST CARGO THEFT RATES SPEED OF SERVICE NUMBER OF STATE INCIDENTS 1. Texas 68 2. Georgia 53 3. Tennessee 18 Use LESS Fuel and Make MORE Stops 4. California 16 with FEWER People. 5. Florida 16 Can this work for you? Let’s talk. 6. Ohio 10 Call Cheetah at 888-CHEETAH or visit www.cheetah.com 7. Arkansas 9 8. New Jersey 9
9. Alabama 8 ™ 10. North Carolina 8 Copyright © 2009 Cheetah Software Systems, Inc. All Rights Reserved. Source: LoJack Supply Chain Integrity study of 1,500 members
April 2009 • Inbound Logistics 19
GLOBAL LOGISTICS by Joseph OO’Reilly’Reilly
What’s the Ocean Commotion?
he ocean shipping industry is awash back and forth drama on the high seas. “Like our customers, we have to adjust Tin a sea of confusion. Some liners are Carriers are idling capacity, ditching older capacity,” says Arild Iversen, CEO of putting vessels on furlough to squeeze vessels, downsizing ships, and pitching Wallenius Wilhelmsen Logistics, the lin- capacity and offset operating expenses. new services and rates, while jockeying er’s logistics arm. “Because we do not Others are shifting assets to demand, for position in otherwise tight trades. predict any significant up-turn in the leaving equipment shortages in under- Swedish-based Wallenius Line, one market until 2010, we will start to put performing lanes. Shippers beset with of the world’s foremost ro/ro carriers, vessels in cold lay up. We are keeping a their own swelling costs continue to recently and purposefully streamlined close eye on market developments and demand make-or-break pricing, while its active fl eet by 20 percent to offset des- will adjust capacity in response to this. some carriers risk running aground as iccating demand for new automobiles. “With our current planning, we expect freight rates bottom out. Meanwhile, The automotive market has been to have 15 to 20 percent of our capacity the worldwide ocean-going fl eet con- severely impacted by the current global in lay up during the year,” he adds. tinues to grow. malaise and volumes have decreased as By restoring and raising rates in certain The uncertainty of a global economic much as 40 percent compared to the lanes, Maersk Line hopes to better balance crisis and recovery has been cast in a same period last year. operating costs.
April 2009 • Inbound Logistics 21 GLOBALLOGISTICS ‹ CONTINUED FROM PAGE 21
Withdrawing ineffi cient ships encour- carriers are increasing rates. For example, carrier contracts based on spot-market ages higher utilization of the remaining in the Asia-Europe trade where MOL has prices, which many carriers see as a bad fl eet and substantially reduces operating already reduced capacity by 30 percent, precedent for steadying rate variability. costs of laid-up vessels. And Wallenius the carrier is raising rates by as much as Amid all this uncertainty comes one isn’t alone. 30 percent to improve profi tability. glimmer of encouragement: the number Japan’s two largest carriers recently Elsewhere, Maersk Line recently began of vessels laid up has begun to level off, reduced container capacity by an addi- restoring and raising rates in certain suggesting some stabilization between tional 10 percent on major routes. MOL, trade lanes – North America to Middle supply and demand. As of the beginning the country’s second-largest shipping East and Indian Subcontinent trade, of April, 485 ships of 1.42 million TEUs company, says it will scale back ships North America to Mediterranean and capacity were idled, accounting for 11.3 percent of the global fl eet, according to AXS-Alphalinera, an ocean-shipping Some shippers are negotiating ocean carrier contracts based consultant based in Paris. This compares on spot-market prices, with 484 vessels of 1.41 million TEUs which many carriers see two weeks earlier when the lay-up rate as a bad precedent for steadying rate variability. showed the first signs of decelerating after surging from 70 ships of 150,000 TEUs in late October 2008. in three of its four major shipping lanes, North African trade, among others – in Despite efforts at rationalizing capac- including the Trans-Pacifi c. NYK Line is an effort to mediate operating expenses. ity, the world fl eet continues to grow, with also cutting capacity on primary routes, Fluctuations in capacity and rates have 79 new ships and 297,000 TEUs of capac- such as Asia-North America, by idling both shippers and carriers wary about ity coming on line so far in 2009, reports older vessels and using smaller ships. the stability of the ocean freight indus- AXS-Alphalinera. The fl eet’s year-to-date As capacity in certain lanes falls, try. Some shippers are negotiating ocean capacity has grown by a net 1.9 percent. Volkswagen De-bugs RFID he Volkswagen Group has turned to IBM for help rolling reduces the volume of paper documentation and bar-code out radio-frequency identifi cation (RFID) in its sup- labels it needs to print. T ply chain to improve material logistics operations — a “Our long-term goal is to implement an integrated, move that might fi nally spark widespread adoption of the paperless production and logistics chain throughout the technology. whole group,” says Klaus Hardy Mühleck, Group CIO and Europe’s largest automotive manufacturer is deploy- head of Group IT at Volkswagen. “The pilot project showed ing the new system after a pilot project that tested RFID that we can reliably integrate RFID technology into our use between its suppliers and manufacturing plants. business processes at a low cost.” Utilizing IBM Global Technology Services’ RFID container For the pilot, Volkswagen fi tted 3,000 shipping con- management solution together with its tainers carrying sunroofs for the new WebSphere Premises Server, an applica- Volkswagen Golf with passive RFID tion-neutral RFID middleware product, tags supplied by Intermec Technologies the new system enhances Volkswagen’s Corporation. The technology has been receiving operations. refi ned so that it can automatically reg- Information on the tagged containers ister metal containers, which historically is automatically collected by readers at have interfered with RFID perfor- all key locations throughout the supply mance. Readers at the entrances to the chain — at the supplier’s shipping depart- manufacturing line, along with mobile ment, through the inbound movement handheld scanners and forklifts, identify to manufacturing facilities, then during the containers and their contents. storage, collection, and installation on Moving forward, Volkswagen is look- the automaker’s assembly line. By using ing to introduce RFID tags to all shipping Volkswagen is using RFID to track the same process for returning empty parts moving from supplier facilities containers carrying auto parts destined containers to suppliers, Volkswagen to manufacturing lines. for its German manufacturing facilities.
22 Inbound Logistics • April 2009 Wincor Nixdorf Opens DC Nexus in Singapore incor Nixdorf is singing the praises of its new Global WDistribution Center (GDC) in Singapore, which serves as a strategic storage and dispatch location for spare parts replenishment in the Asia Pacifi c theater. The German com- pany provides retail and retail banking hardware, software, and services such as ATMs and point-of-sale (POS) systems. Growing consumerism in markets such as China has built demand for responsive replenishment services, opening up new growth opportunities for peripheral Asian locations with German ATM and POS hardware provider Wincor Nixdorf has developed transportation and logistics infrastructure. located its new Global Distribution Center in Singapore to more quickly replenish spare parts in Asia. The Singapore GDC complements an existing center in Düren, Germany, and enables Wincor Nixdorf to control stock sourcing locally, we can deploy goods faster.” effi ciency and quickly respond to customers’ supply needs Wincor Nixdorf delivers repair services and manages stocks across Asia. of 20,000 different types of spare parts across the globe at its “Wincor Nixdorf is committed to providing a high availabil- regional distribution centers, fi eld service locations, pick-up ity of spare parts to customers,” says Ken Ng, manager of the and drop-off points, and technicians’ vehicles. It dispatches Global Distribution Center in Singapore. “This includes some 4,500 consignments a day to retailers and banks with delivery service parts that we manufacture in Singapore and China. By times of 24 hours to Europe, and 48 to 72 hours in Asia. ■
April 2009 • Inbound Logistics 23 David I. Beatson is president and CEO of GlobalWare. 978-469-7500 • [email protected] ITMATTERS by David I. Beatson
From Click to Curb: Earning and Keeping E-commerce Customers
or consumers who want to avoid ■ Ease of purchase. One feature that Visibility tools help fulfi ll this need. dealing with overzealous sales- helps create a pleasant online shop- ■ Standard, streamlined processes. In F people and crowded stores, online ping experience is one-click purchasing, addition to providing a seamless order- shopping offers the perfect alternative. which benefits both the retailer and ing and delivery experience, the retailer U.S. online sales are expected to grow consumer. This limits the human and should offer an easy procedure for han- from $132 billion in 2006 to $271 billion mechanical errors that can occur with a dling the inevitable product returns. A in 2011, according to a study by Forrester complex, multi-step purchasing process. seamless, streamlined, and transparent Research. The same report estimates that We’ve all experienced the frustration of returns process benefi ts both the seller the e-commerce market segment could a 20-minute purchasing transaction and consumer. A global network of cus- soon claim 10 percent of all retail sales. that ends with an error message. It does tomer service centers, warehouses, and How can an e-commerce retailer ensure nothing to build loyalty. shipping facilities is key, as are stan- that it gets a piece of that pie? Online Amazon.com recently introduced an dardized facility procedures and clear, shoppers expect a streamlined shopping advanced application of one-click trans- consumer-friendly return policies. experience, quick and easy browsing, clear actions. The online retailer allows users item descriptions and photos, in-stock to text message a product name to its KEEPING SHOPPERS ON THE LINE products, timely and reasonably priced database. Almost instantly, the database Companies that are serious about delivery, and swift, painless customer texts back a price quote and follows up instituting e-commerce platforms should service and problem resolution. When with a personal phone call to place the consider the consumer first and fore- shoppers fi nd an online retailer that deliv- order. As the technology evolves, con- most. Providing ease of use, reliability, ers all that, they are likely to return. sumers will be able to complete their and customer service creates a shop- transactions digitally. ping experience consumers will want DELIVERING SERVICE ■ Visibility. Some retailers choose to to repeat. E-tailers must understand the While the path from “click to curb” for outsource their e-commerce functions entire customer experience, and should e-commerce transactions is more com- to third-party service providers, which consider whether its needs are better plicated than the average online shopper adds a degree of complexity to the online managed in-house or if an outsourced realizes, the most successful companies transaction. But just as consumers want partner provides more advantages. make the process completely transpar- to know where their orders are and when A seamless, transparent, and painless ent to the buyer. The following are keys they will arrive, the retailer needs to have click-to-curb experience will go far in to providing a shopping experience that visibility into the inner workings of its building and maintaining online cus- makes customers want to come back: channel so it can provide customer service. tomer loyalty. ■
24 Inbound Logistics • April 2009 5?+;E?2BCM 5ILE#P?LS";S
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VIEWPOINT by Gene Scoggins
Finding New Value in Truck Leasing
ack when the economy was future borrowing. Leasing offers a way By outsourcing the contract mainte- humming along, business logis- to avoid applying for more credit. nance, companies find they may not B tics managers turned to leasing ■ Keep costs fixed. When a busi- have to open new or additional shops for for their transportation programs ness signs a full-service lease with vehicle maintenance, nor will they have because it enabled them to focus energy programmed maintenance, it knows to hire more trained technicians to han- on their core business. Today, logistics exactly what monthly transportation dle the complex repair work. Also, the managers’ priorities have changed dra- expenses will be during the contract need to stock an inventory of parts for matically, but leasing still makes sense. period. In an unstable economy, full- each vehicle manufacturer is no longer Now, with all eyes on the bottom line, service leasing can deliver bottom-line a worry. businesses choose leasing because it’s a fi nancial stability. ■ Try new technologies without the viable alternative form of fi nancing for ■ Avoid depreciation losses. Market risk. Hybrid vehicles and new trucks the transportation equipment they need. fl uctuations can affect the residual value meeting U.S. EPA emissions standards Among the benefits, leasing enables of equipment as it ages and depreciates. cause a number of serious concerns companies to: Fleet owners may have invested $85,000 for fl eet owners. Will there be enough ■ Reserve capital for growth. in one tractor, expecting it to depreciate properly trained technicians to repair Dedicated fleets require a huge finan- to a value of $35,000 over seven years. the vehicles and keep them in service? cial investment. Rather than applying But what happens if there is a surplus If a truck breaks down on the road, will working capital to purchasing vehi- of equipment when it is time to sell, as companies be able to find the right cles – or tying it up in long-term loans there is today, where the supply of trucks equipment and labor to get it back up that reduce borrowing reserves – lease is exceeding current demand? What and running? Until these technologies customers can put their money to work happens when the true market value are fully tested and proven, companies in programs directly related to their of the tractor drops to $20,000? With a may not want to invest. businesses’ growth and profi tability. lease agreement, the lessor is left to deal During my 30-plus years in the trans- ■ Manage credit more effectively. with the loss in value; the lessee has no portation industry, I have seen bad Company owners approaching their such worries. economic times before, but not one credit sources for equipment fi nancing ■ Deflect maintenance and repair coupled with such a tight credit mar- are fi nding potential limitations, such concerns. The growth in contract main- ket. Whether because equipment leasing as restricting covenants, limited credit tenance agreements within the truck lets companies focus on their core com- lines, and questions about established leasing industry in recent years indicates petency or relieves credit and capital credit lines. Assets purchased through this aspect of fleet management has investment worries, it continues to be a credit may result in higher rates for begun to overwhelm some fl eet owners. wise choice for many. ■
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IT 2009 PERSPECTIVES Exclusive IL Research
LOGISTICS INFORMATION TECHNOLOGY IS MANY THINGS TO DIFFERENT COMPANIES. It is an investment, a risk, a market neutralizer, and often a competitive differentiator. Technology can micromanage the mundane with extraordinary savings; or it can tackle the extraordinary with mundane consistency. Even as companies tame wanton spend- (SaaS) solutions and service-oriented ing, table strategic endeavors, and closely architectures enables IT buyers to scale measure return on investments, they are applications to both internal supply still willing to gamble on solutions that chain needs and external market-driven By Joseph O’Reilly can proactively and reactively empower constraints. their enterprises. As an information resource, Inbound Function-specifi c technologies and end- Logistics’ annual technology issue deliv- to-end solutions that sweep the supply ers similar scale, pairing macro data from chain – pinpointing and optimizing pain exclusive market research with a drill- areas and aggregating visibility and infor- down directory that scopes out the best mation in the warehouse, in transit, and at and brightest players in the segment. critical origin and destination points – are First, IT Perspectives presents a pan- in high demand, on demand. oramic view of the technology sector, The penetration of Software-as-a-Service framing trends and developments that
April 2009 • Inbound Logistics 29 Exclusive IL Research
PERSPECTIVES
impress businesses to focus technology investments and applications in new Logistics Technology Under The Scope lights. Soliciting input from a diverse With budgetary constraints as they are, technology buyers are acutely aware pool of 300 technology providers, we of the fl exibility they demand and the urgency of redeeming investments. But juxtapose “data bITe” snapshots of the apart from more economical buy-in options and adaptive delivery methods and IT market with statistical data, emerg- upgrades, logistics technology is all about matching utility to need. In spite of ing trends, and anecdotal observations. exceptional economic circumstances, it’s business as usual for the logistics tech- Second, IL’s annual Top 100 nology industry. Logistics IT Companies list serves up “Demand for logistics technologies will increase across the spectrum from day- an in-depth resource of best-in-class to-day tactical enhancement to high-end strategic planning tools that support technology services providers, detail- corporate strategies, green initiatives, and tight ties with product and market ing industry domain, cost structure, lifecycle planning,” reports one survey respondent. application platform, and logistics and Transportation and logistics problem areas largely remain the same, albeit supply chain technology offerings – all exacerbated by tightening purse strings. Technology companies overwhelmingly in an effort to provide shippers with cite cost (92 percent) as their customers’ top transportation and logistics chal- a better map for fi nding partners that lenge, with visibility (76 percent) and customer service (70 percent) among other meet their specifi c needs. pressing concerns. Given the current global fi nancial crisis and credit crunch, Together, these complementary the pressures placed on enterprises to squeeze out spend apparently trump cus- perspectives track the trends and com- tomer service in the eyes of IT companies. panies that are shaping the future of Transportation management systems (TMS) and warehouse management logistics and supply chain technology. systems (WMS) remain a core need for shippers across all industries and a cor- ollary sell for many IT vendors, with 62 percent and 47 percent offering these
databITes
GROWTH SPURT 8% Growth Flat Loss Despite a down economy, technology companies responding 20% to this year’s IT Perspectives survey overwhelmingly report positive 72% growth across the board. In terms of increasing their customer base, 4% 85 percent of respondents identify growth beyond fi ve percent. Sales 9% and profi t fi gures are slightly less 11% 14% PROFITABILITY robust but strong nonetheless, with 78 percent and 72 percent acknowledging increases of fi ve 78% 85% percent or more, respectively. By contrast, only nine percent of IT companies indicate a loss of sales, eight percent a loss in revenue, and four percent a loss of customers. SALES CUSTOMER BASE Source: 2009 IT Perspectives, Inbound Logistics
30 Inbound Logistics • April 2009 Logistics Management Solutions :: 800-355-2153 :: www.lmslogistics.com Exclusive IL Research
PERSPECTIVES
capabilities, respectively. databITes After installation, TMS and WMS investments empower businesses to AT YOUR SERVICE capture low-hanging economies rather 87% quickly. These point solutions are help- 81% 75% ful in that they often aggregate, then alleviate, great ineffi ciencies in specifi c 60 tactical areas – for example, consolidat- 49% ing less-than-truckload (LTL) moves 40 into full truckloads (TL).
As corporate efforts to weed out 20 waste take root, however, businesses are challenged to seed these core sys- tem capabilities, linking them with Manufacturing Retail/E-business Services/Government Transportation other function-specifi c applications, 2009 2008 2007 and thereby increasing visibility between siloed areas of the enterprise. IT companies are pulling out all the stops to engage users, introducing new By integrating transportation and pro- prospects to quick-return, on-demand solutions, and cross-selling existing cus- curement processes, point-of-sale data, tomers. Increasingly, vendors are also going after all parts of the supply chain, and real-time visibility into supplier tapping shippers, intermediaries, and carriers as potential partners. This is a inventory, an organization may see trend that has remained steady over the past few years. In 2009, 87 percent of opportunities to take those TL ship- IT companies report selling to the transportation space, versus 85 percent in ments and recast them as intermodal 2007 and 2008, the highest penetration among all industries. Manufacturing moves where lead times allow; then is close behind at 81 percent; retail and e-business continues an upward track scale production and inventory man- with 75 percent of respondents identifying this as a target niche, compared with agement farther upstream in the global 62 percent just two years ago. Services and government remain a low priority supply chain to match mode and among IT companies, with 49 percent addressing this segment. demand frequency. Source: 2009 IT Perspectives, Inbound Logistics Transportation optimization is a pressing priority for technology-court- ing shippers, according to 50 percent of IT companies responding to IL’s questionnaire. While funds to fi nance “supply chain management” solu- pieces and parts in today’s far-fl ung complete system installs may be scarce, tion remains the most popular feature supply chains, technological and oper- optimization tools that accent and aug- among IT companies, according to ational gaps are omnipresent – if not ment existing core solutions in the 74 percent of this year’s survey par- always apparent. transportation and warehouse space ticipants. As an end-to-end strategic “Visibility value drivers can be quite are hot products – 61 percent of vendors counterbalance to tactical point solu- different depending on the customer provide these capabilities. tions, SCM and Supply Chain Event type and size, but one thing is uni- Management (SCEM) offerings include versal,” offers one survey participant. VISIBILITY, ON DEMAND an array of functionalities not limited “Those who can see their entire sup- Beyond cost, the bane of the sup- to nor defi ned by demand plan- ply chain can make transformative ply chain remains lack of visibility. ning, network design, transportation changes quickly.” Customer diffi culties with technology and warehousing, routing, and order Today, transformative changes are integration (as noted by 61 percent of management. nascent and necessary. The challenge IT vendors) and scalability (47 percent) IT companies confi gure their SCM for shippers is fi nding solutions that are contributing factors to supply chain suites with different user needs in help drive visibility to detail – whether transparency holes. mind, but visibility is a common it’s a shipment in transit, a break- For these reasons, the ubiquitous denominator. With so many moving down of transportation costs, or critical
32 Inbound Logistics • April 2009 TRANSPORTATION SHOULDN’T BE COMPLICATED
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PERSPECTIVES
IT datab es installations. These technology innova- Supply chain transparency is impor- tions enable fl exible delivery/business tant in terms of managing effi ciency BUILD TO SCALE models and rapid deployment of new and economy over boundless dis- products. tances or within bounded security and SMB SaaS-delivered solutions give ship- compliance mandates such as the U.S. 11% pers greater latitude investing in Customs and Border Protection (CBP) LARGE 11% solutions that fi t to need rather than Importer Security Filing (ISF). Nearly etched-in-stone legacy systems that one-third of responding IT companies need to fi t. Businesses have less time, offer global trade management solu- BOTH 78% capital, and resources to vet, pilot, tions, many of which have capabilities install, support, and wait for legacy that meet the new ISF directive. systems to mesh with existing infra- structure, then redeem their value. SaaS-deployed solutions For smaller companies without scale IT have made the technology and scope of resources, and where datab es gamble much more palatable proper technology application can for small and medium-sized be the difference between boom and ANY WAY YOU LIKE IT businesses (SMBs). Beyond bust, fi nding vendors that deliver on the facility of pay-as-you-go, demand, as promised, is invaluable. LOCAL on-demand solutions, vendors As one respondent puts it: “We see 10% are specifi cally targeting this the SaaS trend growing as a means for buyer demographic with direct tapping the lower end of the market, WEB-HOSTED sales efforts and tailored providing high degrees of functionality 27% solutions. There are as many BOTH for a small subscription fee.” 63% companies serving the SMB While a few survey respondents niche (11 percent) as there are cite lack of customization, long-term big business, with 78 percent investment parity, security, ownership, indicating they support both. and business scope as inherent blem- Logistics technology companies The SaaS phenomenon is ishes on SaaS’ sheen, most are bullish, have quickly recognized there evident in how IT companies while some are cautiously candid about is an emerging class of global deliver their solutions. Twenty- its long-term appeal. companies whose size belies its seven percent of surveyed “SaaS is easier to buy, easier to pay competitiveness. Technology is companies only offer Web/ for, and incurs less overhead,” offers an equalizing force and smaller hosted delivery options; players are leveraging logistics an IT company. “But it also makes cus- the contrast is even greater and supply chain solutions to tomization and deep integration more among local install vendors, expand their own horizons. diffi cult and has the effect of com- which represent 10 percent of Source: 2009 IT Perspectives, Inbound Logistics moditizing technology. This is where respondents. Flexibility remains services become more important. a top priority for technology Companies that are able to wrap the buyers, so the majority of most valuable and innovative services vendors (63 percent) provide around their SaaS offerings are the both options. Demand for on supplier data – and communicate these ones that will likely win.” demand is accelerating at a details to appropriate partners. double-digit clip – 90 percent of Standardized SaaS application THE INBOUND WAY survey respondents offer a Web/ deployments and service-oriented Rolled into expansive solution hosted solution, compared to architectures have helped logistics suites or apart from core technolo- 80 percent in 2008. Source: 2009 IT Perspectives, technology buyers tackle integration gies, on demand or in house, a number Inbound Logistics and scalability issues without buy- of supply chain solutions address dif- ing into costly and lengthy system ferent aspects of capturing visibility.
34 Inbound Logistics • April 2009
PERSPECTIVES
One noteworthy trend regarding job forecasting and modeling con- Control over processes upstream CBP’s new 10+2 requirement is that the sumption trends, and matching that in the supply chain allows compa- onus falls on both shippers and con- to pipeline inventory, many still lack nies to become much more fl exible in signees who prefer keeping proprietary the ability to truly capture demand how they manage inventory. Given sourcing information within the fold, signals and act on them. Per end-user diffi cult-to-fi gure consumer forecasts, as well as the intermediaries and carri- demand, there has yet to be a seismic some are more inclined to employ ers they might otherwise charge with shift in IT companies providing spe- postponement strategies and push managing these new measures. IT com- cifi c solutions that address demand least-value-added product farther panies that have exclusively targeted management, with less than one-third back in the supply chain; others are one or the other now have entrée into a (30 percent) selling technology to this engaging vendor-managed inventory new buyer demographic. niche need – following a similar trend programs to similarly fl ex inventory- Visibility engages the future as line the past few years. carrying needs and mitigate risk. much as the here and now. The abil- But there are telltale signs that More sophisticated companies are ity to more accurately predict demand some IT vendors are helping custom- linking lean processes, inbound con- is increasingly important as businesses ers incrementally evolve their supply trol, and forecasting to scale production struggle to match resources with need chains along this demand-driven path. to demand. The past three years have in a capital crunch. Thirty-six per- Vendor management and supplier rela- brought an increase in the number of cent of surveyed IT companies provide tionship management capabilities are IT vendors offering inventory manage- modeling/forecasting capabilities, com- increasingly part of IT suites, with ment capabilities in all of its guises – 58 pared to 30 percent two years ago. 41 percent of respondents offering percent of participants this year, com- Such visibility enables demand- these respective capabilities. Growing pared to 54 percent in 2007. driven, inbound logistics processes. demand for solutions that connect While much capital and attention “Inbound management tools empower offshore trading partners suggests has been paid to technologies that companies by controlling shipments companies want better visibility into, reduce cost, some companies are tap- from globally dispersed suppliers, greater communication with, and more ping supply chain solutions to redeem and providing real-time visibility to control over the supply chain at the value and create new revenue streams. those shipments,” reports one survey point of origin – which can create a cas- Sustainability efforts represent the respondent. cade of effi ciencies and economies in lowest priority for shippers, according Even if companies are doing a better accordance with an inbound lead. to 27 percent of IT companies surveyed.
databITes
72% CHECKS & BALANCES 65% Transactional pricing remains steady among IT providers with one in 60 51% two offering pay-as-you-go applications. This trending has varied lit- 50 tle over the past few years and refl ects steady demand for “technology as needed” type investments where businesses can plug and play solu- 40 tions without the risk of investing capital, time, and resources into a full 30 installation. Full system installations, particularly in the WMS and TMS 20 space, remain the bread and butter for IT companies, with incremen-
10 tal growth over the past three years, from 68 percent of respondents in 2007 to 72 percent in 2009. Per-seat pricing, which provides scale Transactional System User based on number of users, falls in between with 65 percent of IT com- panies offering this payment structure. Source: 2009 IT Perspectives, Inbound Logistics
36 Inbound Logistics • April 2009 Exclusive IL Research
databITes
BARGAIN SHOPPING 59% ➔ Top 100 Logistics IT 50 Companies: Tag, They’re IT 40 36% 29% Technology buyers today are explicit in the type of solutions they 30 need. Consequently, IT companies are making their best efforts to 20 capture this demand with targeted applications and services. 10 Whether entertaining a homegrown TMS or an on-demand global trade management module, discerning the value between IT func- Less than $50K $50K to $250K $250K+ tionality and solution platform requires a great deal of diligence.
Regardless of pricing structure and deployment, the Consideration for one without the other can severely marginalize a cost of technology has dropped considerably. The company’s fl exibility, short-term effectiveness, and long-term costs. majority of IT vendors (59 percent) report that their With so much logistics technology variability, and so many solu- average customer falls in the $50k to $250k spend range, while 36 percent target the less than $50k tion partners to pick from, shippers need to be calculating in fi nding market, and 29 percent go after clients who spend more a deployment that best meets functionality and cost requirements. than $250k on technology. In the past three years the Inbound Logistics’ annual Top 100 Logistics IT Companies is a good number of IT companies catering to “thrift” buyers has increased from 31 percent to 36 percent, while high- place to begin this process. rolling technology purveyors have dropped from 35 Selecting the Top 100 Logistics IT Companies is a measure of percent to 29 percent. The middle-of-the-road IT buyer identifying our readers’ unique challenges and technology require- remains the core sell and this slice will likely expand ments and matching them with IT companies adeptly positioned in even more as SaaS- and SMB-tailored solutions saturate the marketplace. the market and equipped with the right experience and resources. Source: 2009 IT Perspectives, Inbound Logistics We look for companies where logistics and supply chain solutions are a core business and where shipper successes are earned and embraced. Our list includes a mix of logistics solutions companies, from legacy WMS providers to niche SaaS vendors; start-ups court- While it may not be a pressing boardroom concern as every- ing SMBs and up-starts with Fortune 500 accounts. thing else crumbles, some companies recognize that green stewardship, supply chain leadership, favorable PR spin, and IL editors winnowed this year’s crop from more than 300 appli- consumer buy-in are inherently linked. cants, using questionnaires, online research, and interviews to Practical green solutions that aim to reduce and recy- validate our picks. The Top 100 Logistics IT Companies list pres- cle waste, such as reverse logistics and product lifecycle ents a drill-down focus of the technology partners that can help your management, remain areas of embryonic growth for IT com- panies and their customers, with 36 percent and 19 percent, enterprise reach its current and future goals. respectively, providing solutions in these niches. The fast- If questions about specifi c companies arise – and we hope they growing entrée of a-la-carte sustainability solutions such as do – visit the online IT Decision Support Tool (inboundlogistics.com/ procurement and carbon emissions footprinting, network lit/lit100.shtml) to solicit companies for additional information about optimization, and green packaging are beginning to ripple throughout the marketplace, but have yet to make a wave. ■ their services. If you have any questions about our IT Perspectives or Top 100 list, please feel free to send us an e-mail: [email protected]
April 2009 • Inbound Logistics 37 PLATFORM COST BASIS PRICE RANGE INDUSTRIES NICHE LOCAL WEB/HOSTED/ASP THAN $50KLESS $250K$50K TO + $250K NO CHARGE THE TO CUSTOMER MANUFACTURING RETAIL/E-BUSINESS/ WHOLESALE SERVICES/ GOVERNMENT TRANSPORTATION SMALL/MEDIUM COMPANIES COMPANIES LARGE
COMPANY NAME & PHONE NUMBER E-MAIL & WEB ADDRESSES TRANSACTIONAL SYSTEM SEAT/USER
Aankhen [email protected] 408-387-0083 www.aankhen.com ●●●●● ● ●● ●●●
Accellos [email protected] 719-433-7024 www.accellos.com ●● ●●●●● ●● ●●
Agistix [email protected] 480-283-8933 www.agistix.com ● ● ● ● ●
AL Systems [email protected] 973-586-8500 www.alsystems.com ● ● ● ●● ●●
Appian Logistics Software [email protected] 800-893-1250 www.appianlogistics.com ●● ●●● ●● ●●●
Apriso [email protected] 562-951-8000 www.apriso.com ● ●● ● ● ●
Arigo [email protected] 978-528-2204 www.arigo.com ●●●●● ● ●● ●●●
ASC Software [email protected] 937-429-1428 www.ascsoftware.com ● ●● ● ●● ●●●
BestTransport [email protected] 614-888-2378 www.besttransport.com ● ●●● ● ●● ●●●
Blinco Systems [email protected] 416-510-8800 www.blinco.com ●● ● ● ●● ●●●
Blue Sky Technologies [email protected] 704-256-3099 www.blueskytech.com ●● ● ● ●● ●●●
Cadre Technologies [email protected] 888-599-5868 www.cadretech.com ●●●●● ● ●●●●●
CAPE Systems [email protected] 800-229-3434 www.capesystems.com ●●●●●●● ●●●●●●
Cass Information Systems [email protected] 314-506-5500 www.cassinfo.com ● ● ● ●●● ●
Catalpa Systems [email protected] 828-437-7488 www.catalpa-systems.com ●● ●●● ●● ●●●
CDC Software [email protected] 770-351-9600 www.cdcsoftware.com ●●●●● ●● ● ●
Cheetah Software Systems [email protected] 888-CHEETAH www.cheetah.com ●● ●● ● ●●●●
ClearOrbit [email protected] 512-231-8191 www.clearorbit.com ●● ●● ● ●●●●●
ClearTrack Information Network [email protected] 615-377-4400 www.cleartrack.com ● ● ● ●● ● ●
Click Commerce [email protected] ●●●●● ●● ●●●● ● 312-482-9006 www.clickcommerce.com
© 2009 Inbound Logistics
38 Inbound Logistics • April 2009 COST BASIS TRANSACTIONAL: scalable, depending on the number of transactions SYSTEM: pricing for a complete install SEAT/USER: scalable, depending upon system user
SOLUTIONS OFFERED
SPECIALIZATION AUDITING/CLAIMS/ FREIGHT PAYMENT CRM* DEMAND MANAGEMENT DRP/MRP E-BUSINESS FUNCTIONALITY ERP MGMT TRADE GLOBAL INVENTORY MGMT PLANNINGLOAD MODELING/ FORECASTING OPTIMIZATION PROCUREMENT PLM LOGISTICS REVERSE RFID ROUTING/SCHEDULING SECURITY SRM** SCM SUSTAINABILITY TRANSPORTATION/ TMS VENDOR MGMT WAREHOUSING/WMS WIRELESS/MOBILE TECHNOLOGY
Supply chain visibility ●● ●●●
Warehouse automation, TL/LTL transportation management ● ● ● ● ●● ●● ●●●●
Multi-carrier, multi-mode, domestic and international ● ●● ●●
Supplier to big box retailers ●●●●●●●●
Fleet routing optimization, GPS tracking, driver performance reporting ●● ● ● ●
Warehouse operations execution for manufacturers ●● ●
Total cost optimization of global product sourcing, trade management ● ● ● ●●● ● ● ● ● ● ● ●●● ● ●●●
Warehouse management systems, manufacturing execution ●●● ● ● ● ●●●●
Transportation execution ●●●●●●●● ● ●
Global commerce and trade management ● ● ●●●● ● ● ● ● ● ● ●●● ● ●
Supply chain visibility and alerting ●●● ●● ●●●
3PL, warehousing, distribution ●●●●●●
Supply chain and packaging optimization, pallet and truck loading ● ●● ●● ● ● ●●●
Freight bill rating, audit, payment and information services ●
Food, medical ● ●●●●●● ●●●
Supply chain software for large enterprises ● ● ● ●●●●● ● ● ●●● ● ● ● ● ●
Transportation logistics automation and optimization ● ● ● ● ●
SCM, SRM, reverse logistics, process execution ● ● ●●●●●● ●●● ● ● ● ● ● ● ●
Supply chain visibility and analysis, event management ●● ●● ● ●
Aerospace and defense, high-tech and ● ● ● ● ●●●●● ● ● ● ● ● ● ●●● electronics, utilities, energy
*CRM: Customer Relationship Management ** SRM: Supplier Relationship Management
April 2009 • Inbound Logistics 39 PLATFORM COST BASIS PRICE RANGE INDUSTRIES NICHE LOCAL WEB/HOSTED/ASP THAN $50KLESS $250K$50K TO + $250K NO CHARGE THE TO CUSTOMER MANUFACTURING RETAIL/E-BUSINESS/ WHOLESALE SERVICES/ GOVERNMENT TRANSPORTATION SMALL/MEDIUM COMPANIES COMPANIES LARGE
COMPANY NAME & PHONE NUMBER E-MAIL & WEB ADDRESSES TRANSACTIONAL SYSTEM SEAT/USER Compliance Networks [email protected] 877-267-3671 www.compliancenetworks.com ●●●● ●● ● ●●
CT Logistics [email protected] 216-267-2000 www.ctlogistics.com ●●●●● ● ●●●●●●
CTSI [email protected] 901-766-1500 www.ctsi-global.com ●●●●●●● ●●●●●●
Cypress Inland [email protected] 281-469-9125 www.yardview.com ●● ● ● ●●●●●●
Data2Logistics [email protected] 609-577-3756 www.data2logistics.com ● ● ● ●●●●●●
Datex [email protected] 800-933-2839 www.datexcorp.com ●● ●● ● ●●●
Deposco [email protected] 877-770-1110 www.deposco.com ● ● ●● ●●●●●
Descartes Systems Group [email protected] 416-741-2838 www.descartes.com ●●● ●●● ●● ●●●
eCustoms [email protected] 877-328-7866 www.ecustoms.com ●●●●●●●●●●●●●
Epicor [email protected] 800-999-6995 www.epicor.com ●● ●● ● ●●●●●●
Fortigo [email protected] 512-372-8884 www.fortigo.com ● ● ● ●●●●●●
Freightgate [email protected] 714-799-2833 www.freightgate.com ● ●●●●●● ●●●●●●
GlobeRanger [email protected] 469-330-5526 www.globeranger.com ●● ● ● ●●●●●●
HighJump Software [email protected] 800-328-3271 www.highjump.com ●●●●●● ●●●●●●
I.D. Systems [email protected] 201-996-9000 www.id-systems.com ●● ● ● ●●●●●●
i2 Technologies (none) 800-800-3288 www.i2.com ●● ● ● ●● ●●●
IES [email protected] 201-639-5000 www.iesltd.com ●●●●●● ● ●●
IFS North America [email protected] 888-437-4968 www.ifsworld.com ● ●● ● ● ●●
ILOG, an IBM Company [email protected] 800-367-4564 www.supplychain.ilog.com ●● ● ● ●●●●●●
Infor [email protected] ●●●●● ● ●●●●●● 800-260-2640 www.infor.com
© 2009 Inbound Logistics
40 Inbound Logistics • April 2009 COST BASIS TRANSACTIONAL: scalable, depending on the number of transactions SYSTEM: pricing for a complete install SEAT/USER: scalable, depending upon system user
SOLUTIONS OFFERED
SPECIALIZATION AUDITING/CLAIMS/ FREIGHT PAYMENT CRM* DEMAND MANAGEMENT DRP/MRP E-BUSINESS FUNCTIONALITY ERP MGMT TRADE GLOBAL INVENTORY MGMT PLANNINGLOAD MODELING/ FORECASTING OPTIMIZATION PROCUREMENT PLM LOGISTICS REVERSE RFID ROUTING/SCHEDULING SECURITY SRM** SCM SUSTAINABILITY TRANSPORTATION/ TMS VENDOR MGMT WAREHOUSING/WMS WIRELESS/MOBILE TECHNOLOGY
Strategic supplier management, vendor compliance and scorecards ● ● ● ●●●
Freight costing, auditing, rating ●●● ● ●●● ●●
High-tech companies and 3PLs ●●●● ● ●● ●●●
Yard management ●●
Global transportation information ●●
3PL, cold storage, apparel distribution ●●● ● ● ● ● ● ● ● ●●●●● ● ●
Warehouse and inventory management ● ●●●●
Customs compliance and security, end-to-end shipment management ●●● ● ● ● ●●● ● ●● ●
Import/export customs compliance ●●● ●●●●
ERP solutions for manufacturing, retail and hospitality companies ● ● ● ● ●● ● ● ● ● ● ● ● ● ● ●●●
TMS, reverse logistics ●● ● ● ●
SaaS software and industry expertise ● ● ● ● ●●● ● ● ● ●●●● ● ● ● ● ● ● ●
Supply chain logistics software ● ● ●●●●●
Warehouse and transportation management, manufacturing execution ● ●●●●●●●
Vehicle management systems ● ● ●●● ●● ●
Logistics planning and execution ●●● ● ● ● ● ● ●●●●● ● ● ●
AMS, ABI, WMS, CRM, EDI, ISF ● ● ● ●● ●●● ●●● ●
Project-centered manufacturing and computerized maintenance management ● ● ● ● ●● ●● ● ● ● ● ●●
Supply chain planning, network design, production sourcing ●●● ● ● ● ●
Solutions for the manufacturing, ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● distribution and services industries
*CRM: Customer Relationship Management ** SRM: Supplier Relationship Management
April 2009 • Inbound Logistics 41 PLATFORM COST BASIS PRICE RANGE INDUSTRIES NICHE LOCAL WEB/HOSTED/ASP THAN $50KLESS $250K$50K TO + $250K NO CHARGE THE TO CUSTOMER MANUFACTURING RETAIL/E-BUSINESS/ WHOLESALE SERVICES/ GOVERNMENT TRANSPORTATION SMALL/MEDIUM COMPANIES COMPANIES LARGE
COMPANY NAME & PHONE NUMBER E-MAIL & WEB ADDRESSES TRANSACTIONAL SYSTEM SEAT/USER InMotion Global TMS [email protected] 800-990-8283 www.inmotionglobal.com ●● ● ● ●●● ●
Inovis [email protected] 877-446-6847 www.inovis.com ●●●●●● ●●● ●●
INSIGHT [email protected] 703-366-3061 www.insightoutsmart.com ●● ● ●● ●●●●●●
InSync Software [email protected] 408-352-0600 www.insyncinfo.com ●● ●● ● ●●●
Integration Point [email protected] 704-576-3678 www.integrationpoint.com ● ●● ● ●● ●●●
Intergis [email protected] 860-496-4900 www.intergis.com ●●●● ●●● ●●●●●●
Interlink Technologies [email protected] 800-655-5465 www.thinkinterlink.com ● ● ● ●● ●●●
International Business Systems [email protected] 800-886-3900 www.ibsus.com ●●●●●●●● ●● ●●●
IQMS [email protected] 866-FOR-ERP2 www.iqms.com ● ●●●● ● ●
JDA Software [email protected] 800-479-7382 www.jda.com ●●●●● ● ●● ●●●
Kewill [email protected] 978-482-2500 www.kewill.com ●●●●● ● ●●●●●●
Knighted Computer Systems [email protected] 914-762-0505 www.knightedcs.com ●● ● ● ●● ●●●
LeanLogistics [email protected] 616-738-6400 www.leanlogistics.com ● ● ●●● ●●●●●●
LLamasoft [email protected] 734-418-3120 www.llamasoft.com ●●●●● ●●●●●●
Logility [email protected] PRICING 800-762-5207 www.logility.com ●● ●● VARIES ●● ●●●
Logistics Management Solutions [email protected] 800-355-2153 www.lmslogistics.com ● ●●● ● ●● ●●
LOG-NET [email protected] 732-758-6800 www.log-net.com ● ●●● ●●●●●●
Made4net [email protected] 201-645-4345 www.made4net.com ●● ● ● ●● ●●●
MagicLogic Optimization [email protected] 206-274-6248 www.magiclogic.com ●● ●●● ●●●●●●
Management Dynamics [email protected] ●●●●● ● ●●●●●● 201-935-8588 www.managementdynamics.com
© 2009 Inbound Logistics
42 Inbound Logistics • April 2009 COST BASIS TRANSACTIONAL: scalable, depending on the number of transactions SYSTEM: pricing for a complete install SEAT/USER: scalable, depending upon system user
SOLUTIONS OFFERED
SPECIALIZATION AUDITING/CLAIMS/ FREIGHT PAYMENT CRM* DEMAND MANAGEMENT DRP/MRP E-BUSINESS FUNCTIONALITY ERP MGMT TRADE GLOBAL INVENTORY MGMT PLANNINGLOAD MODELING/ FORECASTING OPTIMIZATION PROCUREMENT PLM LOGISTICS REVERSE RFID ROUTING/SCHEDULING SECURITY SRM** SCM SUSTAINABILITY TRANSPORTATION/ TMS VENDOR MGMT WAREHOUSING/WMS WIRELESS/MOBILE TECHNOLOGY
Web-based, on-demand transportation management system ● ● ●●●●●●●●●●●
B2B communications, EDI, data sync, managed fi le transfer ●●●● ●●● ● ● ●
Supply chain network design and planning ●●● ● ●●● ●● ● ● ●●
Fresh food safety, harvest management ● ●●● ●●
Trade compliance ●●
Field service, transportation and delivery ●●●●● ● ● ● ● ● ● ●●
Warehouse management solutions ● ● ●●●● ● ● ● ● ●●● ● ●
Wholesale distribution, supply chain execution, integration ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●●●●● ●
Repetitive and process manufacturing ●●● ●● ● ● ●●
Supply and demand optimization, transportation and logistics management ● ● ●●● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Parcel shipping, global trade and logistics ● ● ●●
Multi- and cross-channel retailers, mfg. Finished goods distribution ● ●●●
TMS for food and beverage, retail, chemical, pharma, construction, 3PLs, CPG ●●●●●●●
Supply chain network design, analysis, optimization and simulation ●● ●●● ●
Consumer goods, food and beverage, wholesale distribution ●●●●● ● ● ●● ● ● ● ● ●
Chemicals, manufacturing ●●● ● ●●●●●●
Supply chain management ● ● ● ● ● ● ● ●●●●●● ● ● ●●● ● ●
3PL, fast moving consumer goods, food and beverage ● ● ● ●
Load planning ●●●●
Global trade content and compliance, supply ●●● ●●● chain visibility, transport management
*CRM: Customer Relationship Management ** SRM: Supplier Relationship Management
April 2009 • Inbound Logistics 43 PLATFORM COST BASIS PRICE RANGE INDUSTRIES NICHE LOCAL WEB/HOSTED/ASP THAN $50KLESS $250K$50K TO + $250K NO CHARGE THE TO CUSTOMER MANUFACTURING RETAIL/E-BUSINESS/ WHOLESALE SERVICES/ GOVERNMENT TRANSPORTATION SMALL/MEDIUM COMPANIES COMPANIES LARGE
COMPANY NAME & PHONE NUMBER E-MAIL & WEB ADDRESSES TRANSACTIONAL SYSTEM SEAT/USER Manhattan Associates [email protected] 770-955-7070 www.manh.com ●● ● ● ●●●●
MicroAnalytics [email protected] 703-841-0414 www.bestroutes.com ●● ●●● ●●●●●●
Mincron Software Systems [email protected] 281-999-7010 www.mincron.com ● ● ● ●● ●●●
New Generation Computing [email protected] 305-556-9122 www.ngcsoftware.com ●● ●●● ●● ●●●
Nulogx [email protected] 905-482-3840 www.nulogx.com ●●●● ● ●● ●●
nVision Global [email protected] 770-474-4122 www.nvisionglobal.com ● ●● ● ●●●●●●
OATSystems [email protected] 781-907-6100 www.oatsystems.com ●● ● ● ●● ●●
One Network Enterprises [email protected] 972-385-8630 www.onenetwork.com ●●●●● ● ●●●●●●
Optiant [email protected] 781-238-8855 www.optiant.com ●● ●● ● ●●●●
Oracle [email protected] 650-506-7000 www.oracle.com ●●●●● ● ●●●●●●
ORTEC [email protected] 678-392-3100 www.ortec.com ●● ●● ●● ●●●●●●
PeopleNet [email protected] 888-346-3486 www.peoplenetonline.com ● ●● ● ● ●●
PINC Solutions [email protected] 510-845-4900 www.pincsolutions.com ● ● ● ●●●●●●
PowerTrack, U.S. Bank [email protected] 800-925-4324 www.powertrack.com ● ● ● ●●●● ●
Precision Software (Div. of QAD) [email protected] 312-334-8600 www.precisionsoftware.com ●● ● ● ●● ●●●
Prophesy Transportation Solutions [email protected] 800-776-6706 www.prophesylogistics.com ●● ●● ● ●●●
QuestaWeb [email protected] 908-233-2300 www.questaweb.com ●● ●● ● ●● ●●●
Quintiq [email protected] 610-964-8111 www.quintiq.com ●● ●● ● ●●●●●●
RedPrairie [email protected] 262-317-2442 www.redprairie.com ●●●●● ● ●●●●●●
Retalix USA [email protected] ●●●●● ● ●●●●● 469-241-8400 www.retalix.com
© 2009 Inbound Logistics
44 Inbound Logistics • April 2009 COST BASIS TRANSACTIONAL: scalable, depending on the number of transactions SYSTEM: pricing for a complete install SEAT/USER: scalable, depending upon system user
SOLUTIONS OFFERED
SPECIALIZATION AUDITING/CLAIMS/ FREIGHT PAYMENT CRM* DEMAND MANAGEMENT DRP/MRP E-BUSINESS FUNCTIONALITY ERP MGMT TRADE GLOBAL INVENTORY MGMT PLANNINGLOAD MODELING/ FORECASTING OPTIMIZATION PROCUREMENT PLM LOGISTICS REVERSE RFID ROUTING/SCHEDULING SECURITY SRM** SCM SUSTAINABILITY TRANSPORTATION/ TMS VENDOR MGMT WAREHOUSING/WMS WIRELESS/MOBILE TECHNOLOGY
Supply chain optimization, planning through execution ● ● ● ●●● ● ● ● ● ● ● ● ●●●●● ●
Distribution planning ● ● ● ● ●
Automated warehouse management ●● ● ● ●
Fashion: apparel, footwear, accessories ●●● ●●● ● ● ●
Small to medium-sized manufacturers, wholesalers, 3PLs ●●● ● ●● ●
Global freight audit, payment and logistics information management ● ● ● ● ●●
Retail, industrial manufacturing, consumer goods ●
Multi-party and multi-enterprise supply chain challenges ●●● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●●
Inventory optimization, network design, supply chain cost reduction ●●●●
Transportation and logistics solutions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
CPG; oil, gas and chemicals; trade, transport and logistics ● ●●● ● ● ● ●●●●
Route management, supply chain communications, end-to-end vehicle mgmt. ● ●
Yard management, supply chain visibility and optimization ● ●● ●● ● ● ● ●● ●
Freight and global trade payment ●●● ●
Transportation and global trade management ●●●● ●●●
Transportation management and logistics ●● ●● ●● ●
Global trade management ●● ● ●● ●
Supply chain planning and scheduling optimization ● ●● ● ●●
Workforce and transportation management, inventory ●● ●●●● ● ● ● ● ●
ERP, supply chain, logistics, ● ● ●●●●● ● ● ●●●●● ● ● transportation solutions
*CRM: Customer Relationship Management ** SRM: Supplier Relationship Management
April 2009 • Inbound Logistics 45 Platform COST BASIS Price Range Industries NICHE Solutions Offered / T
S ing / l e ss cs S M e i s N n/ u l
y y O o th d y
I i im st bi t e MGM e t i s ine n T gi n al
l MGM T to IUM la ymen t u o NIE PA ing/W ch ad URING Mo TAT o tat i o E D/ASP gy gy D ing S a al i B i / s M / nning ss n $50K R r - ry ry n MGM T P u y s $250K at E e L e P Tr ME rge ss o e d / la e sal NIE r r ing/ s er i olo mer s CO in a bi ine e ing/C ht l gemen t to ho n SPO spo ing/S uremen t al P cast n i l tha s MR sact t em a /u PA a ** i t ct do N n b uri t u cha D re NU FACT n S d
P/ u VERNMEN sto M sta re P A ta oc a I M c ch M ss B a n at hol e a A pt imiz R en O ever F u M ALL/ RM R o oad nven to y st r c M $250K + $250K No Le $50K R e LOCAL Web/HOST c Servi G T D CO * C RM Dem E - Fun ER Glo W S Freig I Ma LA RGE Au L Mod e l F O Pr PL R R Ro Tr Se S SC Su T M V W Te Wire
Company Name & Phone NUMBER E-mail & Web ADDRESSES t s s e Specialization
[email protected] RMI Rail transportation information 404-355-6734 www.railcarmgt.com l l l l l l l l l l l
Robocom [email protected] Food and beverage, tires and automotive 631-861-2056 www.robocom.com l l l l l l l l l l aftermarket, industrial products l l l l
Royal 4 Systems [email protected] Automotive, 3PL, food, distribution, 888-876-9254 www.royal4.com l l l l l l l l l l manufacturing l l l l l l l l l l
SAP AG (none) Order management, planning, global trade 800-872-1727 www.sap.com l l l l l l l l l l l l l l mgmt. and compliance, dangerous goods l l l l l l l l l l l l l l l l l l l l l l l l
Smart Software [email protected] Demand forecasting and planning, 800-762-7899 www.smartcorp.com l l l l l l l l l l inventory optimization l l l l l
[email protected] SmartTurn Warehouse management systems 415-685-4200 www.smartturn.com l l l l l l l l l l l l l l l l l l l l l l
Sterling Commerce [email protected] B2b integration solutions, supply chain 614-793-4041 www.sterlingcommerce.com l l l l l l l l l l l l execution applications l l l l l l l l l l l l l l
[email protected] Supply Chain Consultants Chemicals, food processing, semiconductors 302-738 9215 www.supplychain.com l l l l l l l l l l
TCLogic [email protected] Inventory optimization, supply chain 317-464-5152 www.tclogic.com l l l l l l l l planning, data management l l l l l l
[email protected] Technology Group International Business management software 419-841-0295 www.tgiltd.com l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l
[email protected] TECSYS Supply chain management 800-922-8649 www.tecsys.com l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l
Terra Technology [email protected] Demand sensing and planning, forecasting, 203-847-4007 www.terratechnology.com l l l l l l l inventory optimization l l l l l
ToolsGroup [email protected] Inventory optimization and 617-263-0080 www.toolsgroup.com l l l l l l l l supply chain planning l l l l l l
[email protected] TradeBeam Global trade management 888-311-1415 www.tradebeam.com l l l l l l l l l l l l l l l l l l l l
TransportGistics [email protected] Transportation, logistics, 714-701-0244 www.transportgistics.com l l l l l l l l l l l l supply chain management l l l l l l l l l l l l l l
TransWorks [email protected] Supply chain execution, 260-487-4450 www.trnswrks.com l l l l l l l transportation management systems l l l l l l l l l
[email protected] Ultraship TMS Manufacturing, retail 866-580-3380 www.ultrashiptms.com l l l l l l l l l l l l l l
USTC Live Logistics [email protected] Transportation management, 410-882-4200 www.ustclive.com l l l l l l l l l freight bill audit and payment l l l
[email protected] XATA Fleet management optimization 800-745-XATA www.xata.com l l l l l l l l
† [email protected] Zebra Enterprise Solutions l l l l l l l Yard management l l l Zebra includes Navis, proveo and WhereNet proveo Navis, includes Zebra
† 510-267-5000 www.zebra.com/zes
© 2009 Inbound Logistics
46 Inbound Logistics • April 2009 COST BASIS TRANSACTIONAL: scalable, depending on the number of transactions System: pricing for a complete install SEAT/User: scalable, depending upon system user
Platform COST BASIS Price Range Industries NICHE Solutions Offered / T
S ing / l e ss cs S M e i s N n/ u l
y y O o th d y
I i im st bi t e MGM e t i s ine n T gi n al
l MGM T to IUM la ymen t u o NIE PA ing/W ch ad URING Mo TAT o tat i o E D/ASP gy gy D ing S a al i B i / s M / nning ss n $50K R r - ry ry n MGM T P u y s $250K at E e L e P Tr ME rge ss o e d / la e sal NIE r r ing/ s er i olo mer s CO in a bi ine e ing/C ht l gemen t to ho n SPO spo ing/S uremen t al P cast n i l tha s MR sact t em a /u PA a ** i t ct do N n b uri t u cha D re NU FACT n S d
P/ u VERNMEN sto M sta re P A ta oc a I M c ch M ss B a n at hol e a A pt imiz R en O ever F u M ALL/ RM R o oad nven to y st r c M $250K + $250K No Le $50K R e LOCAL Web/HOST c Servi G T D CO * C RM Dem E - Fun ER Glo W S Freig I Ma LA RGE Au L Mod e l F O Pr PL R R Ro Tr Se S SC Su T M V W Te Wire
Company Name & Phone NUMBER E-mail & Web ADDRESSES t s s e Specialization [email protected] RMI Rail transportation information 404-355-6734 www.railcarmgt.com l l l l l l l l l l l
Robocom [email protected] Food and beverage, tires and automotive 631-861-2056 www.robocom.com l l l l l l l l l l aftermarket, industrial products l l l l
Royal 4 Systems [email protected] Automotive, 3PL, food, distribution, 888-876-9254 www.royal4.com l l l l l l l l l l manufacturing l l l l l l l l l l
SAP AG (none) Order management, planning, global trade 800-872-1727 www.sap.com l l l l l l l l l l l l l l mgmt. and compliance, dangerous goods l l l l l l l l l l l l l l l l l l l l l l l l
Smart Software [email protected] Demand forecasting and planning, 800-762-7899 www.smartcorp.com l l l l l l l l l l inventory optimization l l l l l [email protected] SmartTurn Warehouse management systems 415-685-4200 www.smartturn.com l l l l l l l l l l l l l l l l l l l l l l
Sterling Commerce [email protected] B2b integration solutions, supply chain 614-793-4041 www.sterlingcommerce.com l l l l l l l l l l l l execution applications l l l l l l l l l l l l l l [email protected] Supply Chain Consultants Chemicals, food processing, semiconductors 302-738 9215 www.supplychain.com l l l l l l l l l l
TCLogic [email protected] Inventory optimization, supply chain 317-464-5152 www.tclogic.com l l l l l l l l planning, data management l l l l l l [email protected] Technology Group International Business management software 419-841-0295 www.tgiltd.com l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l [email protected] TECSYS Supply chain management 800-922-8649 www.tecsys.com l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l
Terra Technology [email protected] Demand sensing and planning, forecasting, 203-847-4007 www.terratechnology.com l l l l l l l inventory optimization l l l l l
ToolsGroup [email protected] Inventory optimization and 617-263-0080 www.toolsgroup.com l l l l l l l l supply chain planning l l l l l l [email protected] TradeBeam Global trade management 888-311-1415 www.tradebeam.com l l l l l l l l l l l l l l l l l l l l
TransportGistics [email protected] Transportation, logistics, 714-701-0244 www.transportgistics.com l l l l l l l l l l l l supply chain management l l l l l l l l l l l l l l
TransWorks [email protected] Supply chain execution, 260-487-4450 www.trnswrks.com l l l l l l l transportation management systems l l l l l l l l l [email protected] Ultraship TMS Manufacturing, retail 866-580-3380 www.ultrashiptms.com l l l l l l l l l l l l l l
USTC Live Logistics [email protected] Transportation management, 410-882-4200 www.ustclive.com l l l l l l l l l freight bill audit and payment l l l [email protected] XATA Fleet management optimization 800-745-XATA www.xata.com l l l l l l l l
† [email protected] Zebra Enterprise Solutions l l l l l l l Yard management l l l 510-267-5000 www.zebra.com/zes
*CRM: Customer Relationship Management ** SRM: Supplier Relationship Management
April 2009 • Inbound Logistics 47 48 Inbound Logistics • April 2009 “YOU NEVER WANT A SERIOUS CRISIS TO GO TO WASTE…IT’S AN OPPORTUNITY INTERNAL TO DO THINGS THAT YOU DID NOT COLLABORATION THINK YOU COULD DO BEFORE,” said Rahm Emanuel, Barack Obama’s chief of staff, in a November 2008 Wall Street Journal interview. Certainly, his words ring true in the supply chain A arena as many companies are working hard to ferret out costs, ineffi ciencies, and redundancies. One of the most powerful tools they’ve found is collaborating not just within supply chain departments, but across the entire enterprise. “Companies have been slow to recognize cross- functional collaboration’s importance,” says Jeff Karrenbauer, president of INSIGHT, a Washington, D.C.-based supply chain consulting and software solutions fi rm. “Part of that is our fault. When logis- ticians get an audience with a CEO, we talk about goals such as reducing LTL cost per hundredweight by 10 percent. The CEO may have no idea what that means. We have to demonstrate how supply chain IDEA metrics directly relate to senior management goals.”
FLIPPING THE SWITCH In the past few years, companies have worked to into current economic volatility streamline external supply chain partner connec- tions and processes linking their global business networks. The topic of internal collaboration was cast in the shadows. In challenging economic times such as these, however, internal collaboration takes on greater importance. Breaking down silos, busting up the ineffi ciencies they create, and changing reward sys- tems to compensate based on business performance as a whole, requires continuous effort. Many leading companies are turning their high- powered analytical lenses inward. They are going back to the drawing board to rethink how inter- nal departments can collaborate to take cost, time, and redundancies out of their businesses. Because it touches all aspects of the enterprise, supply chain BY LISA HARRINGTON management is right in the thick of these efforts as companies such as Intel and CVS Caremark attack collaboration head on.
April 2009 • Inbound Logistics 49 INTEL ILLUMINATING PROCESS CHANGE
n March 2008, Santa Clara, Calif.-headquartered Intel structure, our current total supply chain costs, as a percent of introduced a family of low-power processors designed unit price, were unacceptably high. We needed to decide how specifically for mobile Internet devices and a new to cut supply chain costs nearly in half.” class of simple, affordable Internet-centric comput- The group opted to launch a larger cross-functional team ers called Netbooks. The new processor, dubbed the of approximately 40 people – including representatives from Atom, is based on a micro architecture designed for design, business unit manufacturing, production, supply Ismall devices and low power. Intel expects the Atom to chain planning, materials and equipment acquisition, and open up a signifi cant market by providing highly capa- customer interaction – to design a new supply chain to han- ble small processors at low cost. dle the tens to hundreds of millions of Atom microprocessors The Atom presented a logistics challenge, however. Intel Intel would ship. expected to price the new microprocessor at The team began with the premise that one-fifth the average price of current base “When you sit down product would be manufactured at Intel semi- products. “We needed to create a supply chain conductor fabrication plants around the world. to deliver billions of parts into the market- together and go “After that, all other processes were open to dis- place at remarkably reduced costs,” explains through the entire cussion,” says Kellso. “We asked, ‘What does Jim Kellso, Intel’s senior supply chain master. the customer want, and what does that drive? In early 2008, Kellso and a small team process – from Where are our costs, and how can we reduce kicked off a project to evaluate the challenge. them?’” Intel has supply chain masters in every major concept and In answer to the fi rst question, customers business operation who, while they primarily design through want a supply guarantee. “They want the right focus on their individual areas of purchas- parts delivered when they need them, in the ing, logistics, and planning expertise , are also manufacturing to confi guration they request,” he adds. considered supply chain authorities. Together, As to the second question, the majority these experts form a practice community customer service – of Intel’s supply chain costs center on two within the company. you see where your areas – inventory and adjusting to change. “Our assembly test cycle is fairly long – eight PLUGGING IN job connects with to 10 weeks,” Kellso explains. “At 10 weeks, The cross-functional team set out to defi ne though, customers’ ability to predict what they Intel’s current supply chain costs and assess other peoples’ jobs.” want is poor. So we are constantly re-planning how they would line up against the new prod- – Jim Kellso, production closer to the time of need. We cre- uct suite. “We needed to determine if we had senior supply chain master, Intel ate excess inventory because we’re guessing an affordability problem, and if so, its size,” what the customer wants. Kellso says. “We are successful at running a large manufacturing engine The fi rst step was establishing supply chain costs relative to effectively,” he continues. “But we don’t always build the right total product cost. This exercise included breaking out items product.” such as direct labor to support supply chain activities; inbound, The team believed the better alternative to Intel’s tradi- outbound, and interplant freight; and all inventory costs. Some tional push-based production model was to plan and build of these costs fi nd their way to product spend, others are bal- fast enough to get inside the order variability window. If pro- ance sheet items. Regardless, they had never been assembled duction cycle time collapsed, the company could build the into a single number. Once this calculation was complete, the Atom on a pull-based system, therefore reducing inventory team could identify the appropriate cost range for the new prod- and obsolescence. uct line and the key drivers for those costs. The cross-functional team spent four months challenging The supply chain team identified a solution, then gath- paradigms to produce high volumes of the right product more ered vice presidents from purchasing, logistics, IT, and fi nance, effi ciently. “We believed we could be equally effective using among others. “We told them we had a signifi cant cost gap,” a pull model without affecting the rest of our product costs,” Kellso recalls. “Given the Atom’s drastically lower price Kellso says.
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C onfidence T rust L eadership since 1923. The key is taking time out of the entire process. “For exam- right product. We also reduce labor costs by doing things once ple, if we can simplify the product suite design so that we build and doing them right. fewer variants, we can collapse planning time signifi cantly,” “People know their roles well. But they may not know how explains Kellso. what they do affects everyone else,” he adds. Working on a project of this magnitude requires constant PULLING IT TOGETHER communication and education so all parties understand how The cross-functional team developed a pull-based model the pieces fi t together. to drive production operations from the assembly test point “I had 40 people on this team, and each one at some point onward, thereby addressing the moment where extreme said, ‘I’ve never learned this much in my life,’” Kellso contin- product differentiation occurs. The team did this by bring- ues. “When you sit down together and go through the entire ing together all the different silos to problem-solve inaccurate product process fl ow – from concept and design, through man- inventory volumes. ufacturing to customer interaction – you see where your job One key question that had to be answered was whether a connects with other peoples’ jobs. You understand what they pull-based system would negatively affect assembly-test equip- do and how you impact each other.” ment utilization. Intel had always assumed plant utilization In particular, the supply chain redesign project created “one would suffer too much under a pull system because frequent of the strongest partnerships between corporate fi nance and conversions and changeovers would be too costly. Assembly supply chain management that I have ever seen,” he adds. test plants cost hundreds of millions of dollars to build, so Historically, fi nance simply acts as the gatekeeper of spend- maintaining utilization is crucial. ing. In this project, however, fi nance helped the project team But with a simpler product suite, the assembly test site could fi nd costs that the company typically did not capture, and consolidate orders for a few days without impacting utilization. build models to identify and track them. “Finance was on the “We have to delicately balance how many days we can consoli- project team from the beginning. They were our rudder on date orders and still do pull-based manufacturing,” Kellso says. where we were spending money,” Kellso says. Currently, Intel is in phase two of the supply chain redesign The project offered a tremendous learning opportunity for project – proof of concept. “The concepts have been approved, everyone involved. “Even if we stopped now, 40 people under- but we have to prove they work,” says Kellso. “Our goal is to stand the supply chain so much better that it was worth the drive inventory down by reducing cycle time and building the effort,” Kellso concludes.
CVS CAREMARK REWIRING THE NETWORK
n 2006, CVS Caremark, the larg- company, which fi lls or manages more the supply chain organization reached est provider of prescriptions in than one billion prescriptions annu- out to store operations “to ensure that the nation, launched an initia- ally. “This meant we weren’t as effi cient when we think about our future, we cre- tive to reassess its supply chain as we needed to be, so we decided to ate a model that will enhance service to after a steady dose of mergers standardize our logistics systems. As a stores,” Link says. “We needed to work and acquisitions. The project result, we’re rolling out a new warehouse with our merchants, so that we would tie Iconsisted of three phases: first, management system, which includes phase three – supplier collaboration – to creating a supply chain roadmap real-time slotting and labor manage- the stores’ way of doing business.” or master plan; second, rebuilding inter- ment functions.” CVS Caremark will kick off phase 3 nal logistics infrastructure; and third, To execute the systems overhaul, CVS this year. The goal is to work collabora- using the new infrastructure to engage Caremark had to forge a signifi cant part- tively with suppliers to pull cost out of with internal and external business part- nership with its information systems the supply chain. ners to drive strategic collaboration. organization. “Without that partnership, The infrastructure project team “We had completed several major we could not have rebuilt our infrastruc- worked together to ensure that systems acquisitions and, in the process, ture. We needed a close relationship to requirements were well-defined. The acquired a diverse network of operating align goals, resources, training, and team identifi ed its warehouse and labor technologies,” explains Ronald Link, technology rollout,” Link observes. management operational needs and senior vice president of logistics for the With the IT partnership solidified, spent a great deal of time evaluating
52 Inbound Logistics • April 2009 various solution platforms, using the corporate decision-making. supply chain roadmap to guide its “Logistics is in the “All business units need to work decisions. middle of many together more closely and consider As an important component of suc- what’s right for the business as a whole. cessful implementation, CVS Caremark activities. All business We have to tear down silos, and make developed a corollary “PRIDE” effort the right decisions for the company,” with its DC workforce. units need to work Estrella adds. “The PRIDE initiative is about per- together more closely sonal responsibility,” Link says. “We THE REAL MOTIVATOR held large rallies in our DC facilities and consider what’s Intel and CVS Caremark offer excel- and within our logistics organization. lent examples of internal collaborative We talked about our best-in-class ser- right for the business efforts and their actual and potential vice model and the high-performance as a whole. We have benefi ts. But these two companies are work environment. We focus on reli- still in the minority among U.S. fi rms, ability, productivity, quality, safety, and to tear down silos, and according to INSIGHT’s Karrenbauer. continuous improvement, then reward “True supply chain management is individuals with incentives based on make the right decisions a boundary-spanning set of activities personal performance.” for the company.” that is collaborative by nature,” he notes. The logistics team also works closely “Although we have renamed job titles, – Joe Estrella, director, transportation with the retail leadership team, which and logistics network, CVS Caremark invested in software, and called the fi eld defi nes the organization’s strategic ini- ‘supply chain,’ few companies practice tiatives and oversees the company’s true supply chain management.” daily operations. The group discusses outcomes and benefits. “To date, our There’s a simple reason for that, sug- improvement initiatives and conducts results are exceeding expectations,” says gests Karrenbauer. “We pay people not cost-benefi t analyses on these ideas. Estrella. to collaborate. As long as performance Recently, the two groups met to CVS Caremark has made signifi cant metrics are silo-based, we will get silo rethink store deliveries. CVS Caremark progress toward becoming a collab- behavior,” he says. delivers product to stores via private orative enterprise. “We’ve seen good Companies must change their perfor- fleet and contract carriage. The com- movement in this direction,” Link mance and evaluation metrics. “People pany’s transportation team, headed reports. “Logistics is in the middle of will resist if their own hides are on by Joe Estrella, director, transportation many activities, so we tend to challenge the line,” Karrenbauer says. “They have and logistics network, worked with store other departments, ask the tough ques- to feel safe, otherwise they will fi ght operations to identify cost-reduction tions, and supply the analytics that fuel collaboration like crazy.” ■ opportunities. Collaborating with the stores, Estrella and his team dynamically re-routed and re-aligned territories in CVS Caremark’s DC network. By doing this in one DC, for example, the company cut 1,900 routes annually. At the same time, it makes 98.9 percent of store deliveries within 15 minutes of their estimated arrival time. The route reduction saves approxi- mately 330,000 miles annually. “With Fine-tune your logistics. fl uctuating fuel costs, we needed a solu- tion to address the issue. The re-routing project saved a lot of money,” Estrella In logistics, you need a partner that’s flexible and can notes. “It’s also good for the environ- move to the beat of every challenge. With Corporate Traffic you get experience, capabilities, asset-based ment and saves wear on the fl eet.” equipment, global resources and cutting edge technology To demonstrate to the stores that to help you increase efficiencies, lower costs and meet they would benefit from the route/ higher customer service standards. Now, isn’t that music territory redesign, the transportation to your ears? team modeled the new delivery network, Full service. Full solutions. Flexible logistics. met with the stores, and presented a 1.800.787.2334 www.corporate-traffic.com “before and after” picture of anticipated
April 2009 • Inbound Logistics 53 REGISTRATION OPEN IN JANUARY WAREHOUSING EDUCATION AND RESEARCH COUNCIL WWW.WERC.ORG
THE ASSOCIATION FOR DISTRIBUTION PROFESSIONALS
STRONG DISTRIBUTION IS THE KEY TO A HEALTHY SUPPLY CHAIN. ATTEND THE CONFERENCE DEDICATED TO IT.
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8732_WERC_AnnlConf09_IL Ad.indd 1 12/1/08 1:10:30 PM INDUSTRY BEST PRACTICES IN FOCUS
SNAPSHOT PLASTICS
OVERVIEW Plastics Surgery: Remolding the Supply Chain In the face of a recession, plastics companies recognize the importance of effi cient transportation and supply chain management. by dan mccue
2008 was a year of progress and change for both a pivotal center for trade and a transit zone the plastics industry. Despite rising commodities for raw materials. costs and fl uctuating fuel prices, the plastics sec- Then came the global fi nancial crisis, and the tor trended toward expansion and bullishness. plastics sector slammed on the brakes. For example, companies such as Innoware Diversity can be the greatest preventive to the Plastics, a maker of plastic food containers, and adverse effects of a bear market and an economic Cereplast Inc., a manufacturer of proprietary slowdown. But as the crisis on Wall Street has bio-based plastics, invested millions in new pro- evolved into a worsening recession – idling every- duction lines, supply chain enhancements, and one from assembly line workers in America’s auto even new railroad spurs to speed raw materials in plants to the Chinese factory laborers who keep us and new products out of their facilities. in computers, toys, and electronic games – the plas- Around the world, the story was much the tics industry is moving into retrenchment mode. same. In Eastern Europe, for instance, plastics Fewer consumer goods sold translates to less production was robust, with several new sup- demand for the raw plastic distilled from bio- ply-side projects coming online to serve the mass, petroleum, or recycled sources. And major European automotive industry. China’s hunger deals, such as the much anticipated $17.4-billion for recycled plastic pellets appeared insatiable, joint venture between the Kuwaiti govern- and rulers throughout the Middle East signaled ment and Dow Chemical, have fallen apart. The their strong desire to diversify their econo- industry is currently so shaky that global man- mies by “cracking” plastic molecules from crude agement consultancy Bain & Company has drawn from beneath the desert, adding a new declared that plastics manufacturers will face chapter to the region’s voluminous history as
April 2009 • Inbound Logistics 55 SNAPSHOT PLASTICS
an unprecedented drop in however, because it drove the plastics shippers need to be demand this year. rail companies to substantially in tune with current market increase private investment in conditions, understand the car- Seizing Transportation their infrastructure, which has riers’ perspective and what’s Opportunities improved capacity and overall most important to them, and Yet in addition to challenges, rail service. have well-developed logistics these tough times also bring “Shorter transit times, options,” Heisler says. opportunities for managing combined with more consis- Today’s negotiating environ- and revising the plastics supply tent service, translates into ment differs signifi cantly from chain, according to Gordon improved railcar cycle times, just a few years ago. Heisler, former transportation and better equipment utili- “Currently, carrier volumes director for Sunoco Inc.’s zation for plastics shippers for all modes are well below polymers division and now and equipment operators,” previous levels, and the freight a senior consultant for the Heisler adds. “This can mean negotiation pendulum is mov- Professional Logistics Group that fewer railcars are required ing toward an ‘equilibrium’ Inc. (PLG), a supply chain position as service provid- consulting and management ers attempt to recover some of services fi rm based in Oak their lost volumes,” he adds. Park, Ill. In such an environ- “There hasn’t been ment, it is critical that a better time in plastics companies recent memory prepare extensively to renegoti- before negotiating ate relationships a new contract with a with transportation transportation provider. If providers – particularly you’re preparing for negotia- railroads and motor carriers,” tions, completing the following Heisler says. “Given the decline tasks will help you gain the in cargo volumes across the greatest advantage. board, including plastics and ■ Do your homework. Ensure raw materials, the time is right Innoware’s lightweight plastic food you thoroughly understand the to take a close, hard look at all packaging uses up to 80 percent market from two perspectives: less material than traditional expiring contracts. paper and metal packages. yours and your service provid- “The past fi ve years brought er’s. Familiarize yourself with a renaissance of the nation’s to deliver the same volume the carrier’s position. railroads,” he adds. “The rail of plastics product. Periodic, ■ Set priorities and expec- carriers seemed to hold all the data-driven fl eet sizing helps tations. Is achieving the lowest cards, especially when it came optimize equipment usage.” delivered cost the most impor- to companies that were served Despite this modernizing, tant goal in the negotiation, or by a single railroad. But the Heisler cautions plastics ship- are you looking for a moderate pendulum always swings, and pers who are negotiating new price with high-quality service? no one has all the leverage for- contracts to recognize that ■ Get a handle on the mar- ever. That’s where we fi nd moving rail freight is still “an ketplace. Benchmark recent ourselves today.” arcane science. market pricing. Develop com- The rail renaissance has “To succeed in transpor- petitive modal options and benefi ted plastics shippers, tation contract negotiations, costs via these alternatives.
56 Inbound Logistics • April 2009 CASE STUDY BASF Molds Supply and Demand hen it comes to navigating challenging pre-evaluated and contracted with on the basis of ser- economic shoals, close and frequent vice, operating effi ciency, and cost. communication among supply chain partners “To ensure we utilize these carriers, we process all W is a highly effective strategy at BASF, Florham orders at specifi c command centers in the regions the Park, N.J., one of the world’s largest plastics suppliers. delivery is moving through,” Dennis says. “They offer “In our markets, which include the automotive indus- loads to preferred carriers in specifi c lanes. Implementing try, consumer goods, construction, electronics, and the TMS will further strengthen this process.” household appliances, demand for our products has Forecasting remains critical to shaping BASF’s manu- dropped in the current economic environment,” notes facturing and inventory deployment decisions. Kathy Dennis, BASF’s manager of communications. “Our “Our organization meets monthly to validate demand suppliers are dealing with the same issues we face.” based on forecast. We use this demand in our sales and In light of those shared challenges, BASF is working operations planning meetings,” says Dennis. “Because closely with suppliers to help them reduce fi xed costs the manufacturing schedule and cycle drives raw mate- while adjusting to lower demand for raw materials. “The goal we’re all working toward is that no one holds excess or high-cost inventory,” Dennis says. Although it is a global plastics producer with facilities in Europe, Asia, and North and South America, BASF’s current supplier base is primarily in the United States, with some raw materials brought in from Canada and Mexico. Typical customers are plastics molders who use BASF’s resins to manufacture everything from auto parts to disposable dinnerware to vinyl siding.
OUTSOURCING FOR SMOOTHER OPERATIONS BASF utilizes the services of several third-party logis- tics providers through its supply chain group, and relies on Logistics Management Solutions (LMS), St. Louis, Mo., to drive its package command center. “The 3PLs consolidate loads from different facilities or manufacturing platforms located in a multi-purpose plant site,” Dennis says. “They also review open orders from various regional logistics centers for consolidation Working with third-party service providers helps BASF opportunities, coordinate inbound and outbound loads, monitor its rail fl eet and consolidate loads. and try to reduce empty miles traveled by carriers.” rial purchases, accurate demand is critical. BASF is also in the process of implementing a “Unfortunately, customer forecasting across all prod- Transportation Management System (TMS) tied into its ucts has not been reliable,” she adds. “Certain products SAP system. are more accurate than others, but as a whole there are “The TMS will provide increased control over freight variations from customer forecasts compared to actual routings, ensuring that we not only achieve our inter- order patterns.” nal goals but also meet commitments to our partners,” And what are the tea leaves currently telling BASF? Dennis says. “In addition, we use a third-party provider, “Consolidating customer operations could change our Quality Transportation Services Inc., Ashland, Va., to distribution network,” Dennis says. “And transitioning help monitor and measure rail fl eet performance.” to other products would require us to avoid maintaining One key to ensuring smooth operations in the current unnecessary locations or using existing locations that economy is relying only on those carriers who have been aren’t optimal in serving our markets.”
April 2009 • Inbound Logistics 57 SNAPSHOT PLASTICS
■ Defi ne your limits. Decide But the distributor had a “Reconfi guring the internal whether you are willing to con- problem. It employed 200 rail- car handling process, which sider changing suppliers and cars to move the plastics, and required minimal capital modes if they represent the paid $500 to $600 per railcar investment, reduced touches lowest-cost alternative. Can each month, but didn’t have by almost half,” Heisler says. you endure the challenges that the transparency built into its “Sometimes the greatest divi- could accompany a mode shift? system to ensure it was getting dends are achieved by simply The more homework you do the most utilization from its envisioning a routine process before beginning the process, rail asset expenditures. in a different way.” the more you will improve your What the distributor did chances of a successful negotia- know was that many railcars Meeting Future Demand tion with service providers. weren’t unloaded immediately “The global recession and upon their arrival at desti- eventual recovery will necessi- Improving Asset nation, which meant it was tate many long-term changes Utilization paying for railcars that were in the polymer supply chain,” But the polymer industry being used to store the product Heisler says. does not consist entirely of customers had purchased. Despite the current eco- high-cost, high-stakes oppor- The solution? Implementing nomic slowdown, plastics tunities. Companies can do a a rail management system. By supply chain managers con- lot inside the fence to improve taking a proactive monitoring cerned about slackening logistics asset utilization. step, the distributor was able to demand, “need to consider For instance, Professional reduce dwell times at customer not only management of the Logistics Group once worked facilities and reduce its fl eet current reduced volumes, but with a plastics distributor from 200 to 175 railcars. also management of a poten- that acted as the middleman “In another case, we found tially very different supply between large plastics produc- that the internal processes chain once the world recession ers and those who used their of a company we were work- turns,” Heisler says. end product – a fairly typical ing with weren’t particularly In the near term, plastics way major producers sell their effi cient,” Heisler says. “Its supply chain managers need to polymers. employees manually pro- recognize and act on the fact cessed a lot of paperwork, that cargo carriers in all modes with minimal systems integra- have excess capacity and are tion between quality control, fi nally receptive to reducing production, inventory, and margins to retain volumes. shipping. And loading pro- But, however bad the reces- cesses in the warehouse and sion gets, it will also most storage area were redundant.” assuredly end, bringing a surge In the case of the paperwork, in pent-up demand with it. a simple integrated software America’s logistics infra- solution eliminated about 20 structure will be insuffi cient minutes of manual entry per to meet freight movement shipment. In the warehouse, a demand by about 2020, when review of how cargo was loaded freight volumes moved within revealed that each railcar load the United States are expected had to be repositioned eight to double from 2004 levels, times before it left the plant.
58 Inbound Logistics • April 2009 Thanks to optimization efforts, fewer railcars are required to deliver the same volume of plastics raw materials.
The Middle East Emerges The Middle East will emerge as an increasingly important player in the raw plastics sector over the next decade for three reasons. according to a University of system-wide rollout to up to 1. Abundant petroleum and Tennessee study. 800 Chipotle restaurants is competitive prices. For the long haul, plastics anticipated later this year. 2. Efforts by entities such supply chain managers should What’s driving this sup- as the Saudi Arabian Basic consider making changes to ply chain decision? Legislative Industries Corporation (SABIC), their overall logistics plan in mandates aimed at curbing which was founded more than light of dramatic improve- greenhouse gas emissions at 30 years ago to begin diversify- ments at U.S. ports, particularly the local level. ing Persian Gulf economies. those in the Southeast, and “The use of bioplastics will 3. Investors are seeking long- the expansion of the Panama play a signifi cant role in pro- term fi nance opportunities in Canal, which is expected to be moting compliance with the region now that mortgage- complete by 2013. these types of mandates,” said based securities in the United FASTFACT: Frederic Scheer, chairman and States have gone bust. Since 1980, Green Legislation CEO of Cereplast, during a The Middle East is already Big moves and tough negoti- conference call with industry the world’s third-largest pro- U.S. plastics ations are not the only avenues analysts and reporters. ducer of polyethylene and industry to plastics supply chain effi - Integral to Cereplast’s the fourth-largest manufac- shipments ciencies in the current anemic expansion plans are pro- turer of polymers of all kinds. economy. duction capabilities at its By 2010, the Middle East will have grown In December, Hawthorne, 105,000-square-foot facility likely account for 20 percent of 3.4 percent Calif.-based Cereplast Inc., in Seymour, Ind., which was the world’s ethylene, while the a manufacturer of bio-based previously used only as a dis- share produced by U.S. manu- per year. plastics, announced a sup- tribution center. The plant’s facturers declines to about 24 ply agreement between Havi/ newly installed production line percent, according to industry Perseco, a packaging research has an annual capacity of 50 estimates. and development fi rm, and million pounds of bio-resin. In addition to Saudi Arabia, Chipotle Mexican Grill, a The focus on production at Kuwait, Qatar, Bahrain and chain of restaurants specializ- the Seymour facility was driven Oman are all poised to increase ing in Mexican food. by the effi ciencies and lower their presence in the plastics Under the deal, Havi will production costs per pound sector. And the government of provide Chipotle’s Mibbrea, that will come from a central- Dubai created the Dubai Multi Calif., restaurant with “envi- ized manufacturing location in Commodities Centre to pro- ronmentally sustainable” Indiana, and the capability to vide industry-specifi c market cutlery manufactured exclu- expand resin production capac- infrastructure for a variety of sively using Cereplast’s ity to as much as 500 million commodities, ranging from “Compostables” resin. A pounds per year. raw plastics to diamonds and
April 2009 • Inbound Logistics 59 SNAPSHOT PLASTICS
gold to energy. Polymers have with 100-percent business in November and December been a particular focus of late, ownership in the emirate a 2008 as prices came down rap- with Dubai’s development guaranteed 50-year tax holiday idly,” Bernard explains. “Many of plastics futures contracts, and freehold property options. companies either held off from launched on the Dubai Gold “Our goal is to attract indus- purchasing, could not collect and Commodity Exchange on try-specifi c companies to have material due to fi nancial issues, Feb. 5, 2009. a presence in Dubai and to set or had more serious problems. James Bernard, associate up as member fi rms,” Bernard “During the same period, director of commodities at says. “A number of plastics and several productions were put the Dubai Multi Commodities petrochemicals companies are on hold as many companies Centre, works closely with already established in the free could not justify selling at both the regional and global zone, creating a substantial these levels and others could petrochemical and plastics plastics hub where the industry not fi nd demand,” he adds. industries to develop the new can meet.” “Demand has increased some- contracts. His plastics team has It can be diffi cult, however, what since then.” been involved in promoting to get a clear picture of the cur- The current global market for the Dubai Multi Commodities rent global plastics distribution plastics and plastic-related raw Centre free zone, which offers network. materials is still in “poor shape,” international companies “We saw a buildup of stocks Bernard says. “Obviously every
CASE STUDY Driving Lessons for the Auto Industry
ompanies supplying the auto industry today are descended upon automakers have not arrived without in a bit of a bind. That’s the fi rst thing Jay Baron, their silver lining for the plastics industry. One is the drive president and CEO of the Center for Automotive for greater fuel economy. Much of the discussion revolves C Research, says when asked about the industry and around “light-weighting” – making cars lighter, which auto- the impact its travails are having on those who make and matically translates into better fuel economy, says Baron, move plastics and plastics-related materials. who serves on a National Academy of Science committee In the auto industry, suppliers of raw material plastics focused on the issue. typically deal with a Tier 1 or Tier 2 supplier rather than “Today the typical car comprises about 90 percent steel, the original equipment manufacturers (OEMs) such as but the number of plastic parts has slowly grown in recent Ford, General Motors, or BMW. years and will continue to do so as we strive to build lighter Over the years, the big car companies have been pushing cars,” he says. lower-tiered suppliers to take on more engineering, which means assuming much more fi nancial burden and risk. A NEW BUSINESS MODEL These suppliers, specifi cally molding and tooling opera- Another silver lining for the plastics industry is that tions, have also largely been driving the supply chain. The when the big automakers get in a cash bind, they intro- bad news is, given the automotive sector’s current eco- duce fewer new models. When that happens, they tweak nomic straits, some weaker, less effi cient suppliers are existing models, creating another opportunity for plastics. destined to go out of business. That will upset the supply “Automakers want the car to look different when it is chain apple cart for some. really the same,” Baron says. “The platform – the under- But the dark and somewhat gloomy days that have body and engine – is the same as cars already on the road,
60 Inbound Logistics • April 2009 region and company is affected United Arab Emirates (UAE) “The plastics and petrochemi- differently, but, clearly, the sup- have stepped up production; cals industry is extremely active ply side is shrinking and will Gulf Cooperation Council in the Jebel Ali port and the continue to do so in some (GCC) countries are also region as a whole.” regions. In others, we will see producing. Given its rapid growth in new, lower-cost productions. Aside from its commodities recent years, the Middle East “In this climate, the overall market, Dubai has played its offers an excellent opportunity balance must result in a reduc- most active role in plastics and for plastics companies. With tion in production volumes or polymers as a facilitator of its huge volumes coming online FASTFACT: we will encounter continual trade throughout the region. during the next one to fi ve The U.S. over-supply,” he adds. “Dubai’s Port Jebel Ali is years, and the region becoming plastics Currently, Dubai is still on considered the gateway to the the focus of international poly- the sidelines of plastics and region, and many countries mer producers and converters, industry polymer production. Several transship through the port in immense growth potential creates other emirates comprising the all directions,” Bernard says. exists for the regional down- stream plastics industry. $379 billion Currently, the UAE’s petro- in annual chemical and polymer industry shipments. is ranked second among the
Many retooled car models achieve their cosmetic enhancements through reshaped body styles and plastic components.
country. They don’t want to start from scratch in every respect,” Baron notes. “For example, BMW, which opened a huge facility in Greenville, S.C., looked to Canada-based Magna, a global supplier of technologically-advanced automotive systems, components, and complete modules, and suppliers such as Siemans and Bosch, with which it had established rela- tionships,” he adds.
THE EFFECTS OF LOYALTY Japanese carmakers and some Tier 1 and Tier 2 suppli- but the ‘top hats’ – the body shape and details – are differ- ers also stick with established relationships in their home ent. And many of those details are plastic.” countries. As a result, international suppliers tend to fol- One unlikely shift is a wholesale migration of materials low the OEM by opening plants in a given region, creating suppliers from Detroit’s Big Three to international auto- tough competition for smaller domestic suppliers of plas- makers, such as BMW and Honda, which have opened tic resins and other raw materials. large assembly plants in the United States. “To be competitive in this market, plastics suppliers International manufacturers typically opt for the secu- must sharpen their supply chain and logistics abilities,” rity of long-standing relationships rather than forging Baron says. “The launch of a new vehicle rides on the sup- partnerships in their new countries. “They’re taking a risk plier’s performance. Automakers want to know that their and making a huge investment by doing business in a new trust is well-placed.”
April 2009 • Inbound Logistics 61 SNAPSHOT PLASTICS
GCC states, with Saudi Arabia Gulf suggest that despite a Middle East is the hub of global leading the list. During the past recent dramatic moderation petrochemical trade, includ- fi ve years, the number of plas- in the price of oil, a number ing plastics,” according to the tics factories in the UAE rose of polyolefi n projects are still Exchange. from 507 in 2003 to 679 in expected to come onstream “Price volatility in recent 2007, an increase of 34 percent. in the Middle East during the months has put pressure on Despite the current economic next few years. profi tability across the plastics slowdown, the plastics indus- This buildup has inspired supply chain, and downstream try in the UAE alone is expected the Dubai Gold and fi rms are looking for innovative to witness a growth rate of Commodities Exchange to start ways to minimize this impact,” between 15 percent and 20 per- plastics futures trading. says Malcolm Wall Morris, cent over the next fi ve years. “Easy access to feedstock CEO of the Dubai Gold and In fact, published reports and proximity to Asian mar- Commodities Exchange. emanating from the Persian kets have ensured that the In light of that desire, the
CASE STUDY Things Go Better with SC Effi ciencies
mong those looking seriously at supply chain production planning, sourcing, and transportation. modifi cations that will affect raw plastics providers Tweaking the supply chain is nothing new for CCE, which in the years ahead is Coca-Cola Enterprises (CCE). four years ago began a $200-million IT initiative, called A After a 120-day internal review aimed at bolstering Project Pinnacle, which expanded the use of SAP applica- its North American business, in December 2008 the tions from managing the intake of raw materials and other bottler and distributor announced its intention to combine functions to improving delivery of product to stores. some supply chain functions with The Coca-Cola Company, Those moves were seen as a way to replace the compa- producer of the Coke syrup concentrate. ny’s old transaction system with an entire SAP suite and The review by CCE, which bottles about 80 improve processes, execution, and information availabil- percent of the Coca-Cola drinks sold in the ity. But now CCE indicates that it needs to bring bigger, United States, was launched in response to and perhaps more fundamental, changes to how it man- both the slowing economy and the rising costs ages its supply chain. of commodities including plastics, aluminum, While no decisions have yet been made to close or and sweeteners. combine plants, that’s one of the options to con- Also driving the revamping of the sup- sider in bringing the two companies’ supply ply chain is the dramatic increase in the chains together. number of beverages CCE delivers to “We can’t promise that for the next year, customers. but we clearly are looking in that direction The new supply chain initiative with because we have great opportunities The Coca-Cola Company represents a to rationalize our supply chain in the “fi rst step toward remaking the sys- future,” Cahillane says. tem,” according to Steve Cahillane, Coca-Cola Enterprises hopes president of CCE’s North American combining supply chain functions Group. with The Coca-Cola Company will The two companies will initially help manage the rising costs of commodities such as plastics and work together on infrastructure and sweeteners.
62 Inbound Logistics • April 2009 Exchange’s plastics futures forecasting because so much contract will provide industry of what it does is driven by the participants with “a sophisti- price of crude, which is unpre- cated hedging tool, enabling dictable,” Heisler says. if it needs to be approached dif- them to lock in futures mar- “In addition, much of the ferently from your last two or gins,” Morris says. forecasting in the plastics three contracts,” he suggests. In addition, nation-states industry is done on a macro “Make sure the carrier knows such as Qatar and Dubai will level and, as a result, can be you have options and you become signifi cant players extremely inaccurate,” he intend to exercise them as you in the world’s plastics sup- continues. “The one thing never have before.” ply chain in the years ahead companies can predict is vol- Heisler believes that smaller because they build huge refi n- ume. Companies that are close companies don’t do well at FASTFACT: eries and chemical plants to customers should have a benchmarking. The plastics without the environmental good idea which way volumes “Small companies have a restrictions prevalent in the are going. Having a fi nger on tendency, especially in this industry United States. the pulse of what’s happen- economic climate, to concen- is the third “As a result, they’ll be able ing downstream is the best trate on day-to-day operations. to land product here with a forecasting.” But you have to strive to defi ne largest considerable scale advantage,” Beyond forging or main- best-in-class supply chain oper- manufacturing Heisler says. taining that closeness with ations in your industry,” he industry Still, it will likely be several customers, Heisler offers one says. “Only then can you for- in the years before displacement of more bit of advice for plas- mulate a method to benchmark United States. domestic suppliers occurs. tics supply chain and logistics your supply chain against
“The global economy has managers: “Look critically at it, and develop a strategy to All Fast Facts provided by the hit a pothole,” Heisler says. every contract, and determine improve it.” ■ SPI Plastics Data Source “Manufacturers of fi nished plas- tics products want to be closer to their suppliers, and suppli- ers are looking to be closer to the consumption point of their goods. This drive for effi ciency will continue to grow.”
Plastics Makes Perfect: MagicLogic’s Striving for Reliable Forecasting Cube-IQ: One factor making it dif- the Ultimate fi cult for domestic plastics suppliers to gauge their com- in Load Planning petitive footing in this new software. environment is the paucity of reliable forecasting. A major reason is the interrelationship between a large segment of the For information and to download a free trial version: plastics industry and the petro- www.magiclogic.comwww.magiclogic.com leum industry. MagicLogic Optimization Inc. Email: [email protected] “The oil industry is one +1-206-274-6248 (GMT-8, International) of the worst in terms of 1-888-274-8616 (PST, North America)
April 2009 • Inbound Logistics 63 )HYJVKL3HILS 7YPU[PUN[V.V
5V^MLH[\YPUNSPULYSLZZWYPU[PUN Bar-Code Printer Guide Fit to Print
When it comes to creating custom labels, by Catherine Harden these specialty printers are raising the bar.
emember that childhood riddle, “What’s black and white and read all over?” Back then, you would have answered, “A newspaper,” but today your answer could very well be “Bar codes.” R Increasingly, businesses of all types are fi nding ways to streamline operations and reduce costs by implementing bar-code technology for data collection and product tracking. Manufacturers have put these tools to good use in quality control, product identifi cation, and materials management. Transportation companies scan for freight tracking and re-label during cross-docking, break-pack, and transfer operations. Distribution centers use bar codes to label pallets, improve inventory visibility, and facilitate receiving, putaway, and picking tasks. No matter what your business, you’ll get the greatest ROI from your bar-code technology by selecting a printer that has all the features you need – and, just as importantly, none of the bells and whistles you don’t need. The bar-code printer you choose should meet your requirements for print resolution, technology, and speed, as well as accommodate the right media sizes for your applications. To help narrow down your options, we feature some top models from the leading manufacturers in specialty printing solutions. So whether you’re looking for a high- volume workhorse, a compact desktop model, or a high-tech wireless wiz, you’ll fi nd a printer to meet your needs. So turn the page and get started. The answer’s right here, in black and white.
April 2009 • Inbound Logistics 65 Cognitive TPG 800-732-8950 cognitive.com
7 8858
Bell-Mark 973-882-0202 bell-mark.com
EasyPrint The EasyPrint off-line printing system Godex combines a conveyor belt with a thermal transfer printer. Adjustable product guides 888-987-8878 godex.com.tw EZ 2000 Plus Series and separators keep materials in place, while The EZ 2000 Plus Series’ two models, the 15.75-inch variable-speed conveyor, available as direct thermal or transfer available in lengths up to 3.28 feet, moves EZ 1100 Plus Series thermal printers, feature a graphic LCD them along. These small footprint thermal transfer and interface and modular design for ease of direct thermal printers are suitable for maintenance. RESOLUTION MEDIA WIDTH SPEED product labeling, packaging, warehouse 300 dpi 2" to 13.8" 47"/sec. RESOLUTION MEDIA WIDTH SPEED storage, and information tags. 203 or 300 dpi 1" to 4.64" 7"/sec. OPTIONS: Ability to print directly on RESOLUTION MEDIA WIDTH SPEED substrates, protective features for use in OPTIONS: Cutter, stripper sensor with 203 or 300 dpi 1" to 4.64" 6"/sec. harsh environments, and tools for printing internal rewinder, and Ethernet adapter card. multiple packages at once. OPTIONS: Rotary cutter module, stripper module, and internal Ethernet adapter card. EZ DT Series InteliJet ti1 Available in two models, the EZ DT Series The high-resolution InteliJet ti1 inkjet printer small volume direct thermal printers can be for in-line carton, package, and Web printing placed on a desktop or wall-mounted to save includes a handheld controller for message space. entry. RESOLUTION MEDIA WIDTH SPEED RESOLUTION MEDIA WIDTH SPEED 203 dpi 0.6" to 4.64" 4"/sec. 300 dpi N/A 4"/sec. OPTIONS: Guillotine cutter module, stripper OPTIONS: Expanded message lengths, module, and internal Ethernet adapter card. variable time and date formats, sequential numbering, and shift coding capability.
66 Inbound Logistics • April 2009 Tharo Systems 800-878-6833 tharo.com Advantage DLX Available in both direct thermal and thermal transfer models, this desktop printer offers enhanced durability with a metal frame and H-Series print mechanism encased in ABS plastic. Designed for high-volume applications, these all-metal thermal transfer printers feature RESOLUTION MEDIA WIDTH SPEED 101 or 203 dpi 1" to 4.25" 5"/sec. a backlit LCD display, a stripper sensor for strip-and-peel or tear-off applications (H-400 OPTIONS: Selectable 150 or 300 dpi print model only), and internal memory for storing resolution. downloaded label formats, graphics, and fonts.
RESOLUTION MEDIA WIDTH SPEED C Series EZ-LP 203 or 300 dpi 0.51" to 6.61" 7"/sec. Suitable for mid-range and desktop This 4-inch-wide direct thermal desktop applications, the C Series printers are printer is suitable for shipping, receiving, and OPTIONS: Cutter, internal rewind, Ethernet available in both direct thermal and thermal inventory applications. adapter, applicator interface for Tharo transfer models, with an LCD control panel PA1200 or PA500w applicators, and RESOLUTION MEDIA WIDTH SPEED EASYLABEL software package. for setup without a computer. 203 dpi 2" to 4.25" 5"/sec. RESOLUTION MEDIA WIDTH SPEED 203 dpi 0.75" to 4.63" 8"/sec. OPTIONS: Parallel port, communications cables, and label (peeler) dispenser. OPTIONS: 300 dpi print resolution.
V-Series The small-footprint V-Series printers are available in both direct thermal and thermal transfer modes. A 300m ribbon capacity and a 5-inch label roll capacity reduce maintenance downtime.
RESOLUTION MEDIA WIDTH SPEED 203 or 300 dpi 1" to 4.65" 6"/sec.
OPTIONS: Cutter, internal Ethernet card, stripper module to sense printed labels in strip-and-peel applications, and a 2MB Flash expansion with real-time clock.
April 2009 • Inbound Logistics 67 Printronix 800-665-6210 printronix.com