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May 18, 2018 - Supply Chain Flagship Newsletter
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This Week in SCDigest

bullet Trip Report:Gartner Supply Chain Executive Conference 2018 bullet SC Digest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet Holste's Blog/Distribution Digest
bullet Cartoon Caption Contest Continues bullet Trivia      bullet Feedback
bullet New Expert Column bullet On Demand Videocasts
 

THIS WEEK'S SPONSOR: ZEBRA TECHNOLOGIES

 
 



Discover the Scanners, Mobile Computers, Tablets and Printers with the Features and Form Factors Made for You


 
 


 
first thought

SUPPLY CHAIN NEWS BITES


Supply Chain Graphic of the Week
A Framework for Inventory Decision Making


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Target Piloting New Flow Distribution Center

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US Population Growth Continues to Slow
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UPS Proposes Two-Tiered Wage Program to Teamsters
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Maesrk Taking Out Capacity in Response to Low Container Rates
   

CARTOON CAPTION CONTEST CONTINUES

April 11, 2018 Contest



See The Full Cartoon and Send in Your Entry Today!


Holste's Blog: For Shippers - Benefits Of Real-Time Control In The DC Are Huge!

 

ONTARGET e-MAGAZINE
Weekly On-Target Newsletter:
May 17, 2018 Edition


Cartoon, Target's Flow Center, FTR on Trucking Rates, Balancing Green and more


WHITE PAPER PROVIDED BY AMBER ROAD




Learn How Blockchain Technology Can be Applied to International Trade



GARTNER CONF DAY 1 AND 2 VIDEO REVIEW AND COMMENT
Day 1 Day 2

NEW EXPERT INSIGHT
How to Stop Inaccurate ASNs from Stealing Sales and Eating Profits
by Kevin Harris
Director of Freight Audit
Compliance Networks

EXPERT INSIGHT

Five Tips for Improving Demand Planner Effectiveness



by Henry Canitz
Product Marketing & Business Development Director
Logility

EXPERT INSIGHT
The $100 Billion Returns Question



by Karin Bursa
Executive Vice President
Logility

eBOOK PROVIDED BY LOGILITY



Using Multi-echelon Inventory Optimization to Achieve Measurable Operational Improvements




TRIVIA QUESTION

The Walmart RFID mandate for RFID tagging cases for its top 100 suppliers was announced in what year?

Answer Found at the
Bottom of the Page



Trip Report: Gartner Supply Chain Executive Conference 2018

Thankfully, I am now at the end of the Spring conference season, after numerous weeks on the road. It's actually hard work, since I attend virtually every session available, often do daily video reviews, etc., but in the end it's really worth it because so many readers enjoy these summary reports.

This week, I was out West for the Gartner Supply Chain Executive Conference, as usual in Scottsdale, AZ.

You can find my daily video reviews here: Gartner Day 1 and Day 2

GILMORE SAYS:


Society needs to do more to deal with the coming disruptions to labor markets, Zakaria said, but in the end was optimistic that humans would be freed of doing mundane tasks and rise to higher levels of activities.

WHAT DO YOU SAY?

Send us your
Feedback here

As many know, the Gartner conference is rooted in the same basic event that was started by AMR Research back in the 1990s. After Gartner acquired AMR in 2009, Gartner infused additional organizational and marketing muscle into the conference, largely to the good. I am sure the event is now much more profitable for Gartner than it ever was for AMR.

There were more than 2200 attendees this year, up from 1500 a couple of year ago and an all-time high, and clearly the event has some momentum, though all told I felt the content was a little down this year. That included having just one supply chain exec as a keynote speaker the first two days, and that a replacement with a not particularly inspiring story.

It's also important to understand that a good percentage of the breakout sessions are sponsored by various technology or consulting vendors, and the price tag isn't cheap, some $100,000 for a sponsor package that includes a presentation slot. But Gartner doesn't seem to have difficulty filling the sessions with sponsors.

All told there was certainly a lot of content presented. This week, I am going to focus on the keynotes, and will be back next week with highlights of some of the breakout sessions.

The opening day keynote and indeed the conference theme as a whole was around the topic of supply chain "digitization," which in my opinion is actually a difficult topic to really get your arms around.

 

Gartner analysts Dana Stiffler and Ken Chadwich covered a lot of ground, making, I think, the good point that having a series of digital projects does not equally becoming a digital business - a goal being chased it seems by an increasing number of CEOS.

 

Which of course begs the question of what digitization of the business or the supply chain really means, and I don't think this presentation well clarified that. From my view, digitization is in fact most commonly defined as a collection of technologies - sensors, artificial intelligence, 3D printing, robots, etc. - rather than as some more holistic framework.

Useful though was the comment from a short video recording of a 3M supply chain executive, who defined digitization as involving electronically connecting to every node in the supply chain, and creating so-called "digital twins" of products and processes.

So the obvious example of the latter would be the creation of an end-to-end model of a company's supply chain in a network design tool, such as offered by LLamasoft and others, that is that digital representation of the physical supply chain, allowing virtual testing of strategies and ideas for improvement or how to react to new opportunities.

Interestingly, Gartner applied its well-known technology "hype cycle" framework to digitization and found it was near the top - meaning companies are bound to hit many bumps and disappointments as digitization falls through the "trough of disillusionment" before finding and delivering real value, so be ready for that.

Stiffler and Chadwick emphasized that innovation leaders have a structured process to drive innovation, including a clear innovation strategy, the right supporting metrics, training, etc. In other words, innovation doesn't just happen, it must be catalyzed by an environment and structure that allows innovation to thrive.


As simple examples, 3M still asks its managers to spend 15% of their time on innovation thinking, while Garter noted Unilever has created a "Digifund" in which employees can apply for up to 10,000 euros for innovation projects - and such requests are automatically approved if a response from management is not received in 48 hours.

At a later breakout presentation, a Unilever manager said the program was such a success in 2017 that funding was doubled this year. Neat idea.

The real challenge, Gartner said, is how do you scale up all the promising digital programs developed in labs and pilots. There is no magic bullet, that's clear, but one key takeaway was the need to honestly assess whether your ambitions are really consistent with your culture, because Gartner research finds in fact the two are often out of sync, leading to failures.

CNN's Fareed Zakaria was the day 1 outside speaker, and we was very good and wisely mostly stayed out of politics. He is clearly very smart and a very polished speaker.


Interestingly, Zakaria said it is very clear the free markets and global trade are the only ways today to drive economic growth. But that globalization - combined with the impact of technology innovation- is threatening to many, so we shouldn't be at all surprised that there are pushbacks against these movements, as manifested in the possibility of US tariffs against Chinese or other imported goods.


Zakaria cited some data I had never considered. He said that for most of US history, jobs basically recovered around six months after the end of a recession. But in the downturn in the early 1990s, it took 15 months for that job recovery. In the 2001 recession, it was 27 months, and whopping 64 months after the Great Recession of 2008-09.


The point, he said, is that the historic link between the economy and jobs is broken.

And that is no doubt in part because of the rise of robotics, AI and other forms of automation. And thus came this scary but unfortunately I think very accurate comment: Zakaria said that software will soon be able to do almost everything better than humans.

He cited an influential magazine article written by Internet pioneer Marc Andreesen titled "Software Eats the World" that posited that software had simply broken through the hardware limitations that had always constrained progress.


In this new unconstrained world, progress everywhere proceeds according to Moore's Law, meaning incredible, almost mind-boggling gains.

The reality simply is software will be able to diagnose your medical issues based on your symptoms better than a doctor - and create a forecast better than the sharpest demand planner. Zakaria noted that someone at Stanford invented an AI program that creates symphony music - and experts can't tell the difference between computer generated and human written pieces. AI is also now being used to somehow create movie trailers from the film footage, taking over what was once thought to be a skill possessed by a small number of film industry talent.

Society needs to do more to deal with the coming disruptions to labor markets, Zakaria said - no kidding - but in the end was optimistic that on the other side humans would be freed of doing mundane tasks and rise to higher levels of activities.

Wish I was equally as optimistic - I am not. If three million truck drivers get replaced by self-driving vehicles, I am not sure what direction their higher-level careers are going to go.

On Wednesday, fighter pilot Anthony Bourke described the discipline with which the military executes pre-mission briefings and especially post-mission debriefs, the latter of which review issues and problems in a highly disciplined, egalitarian and non-judgmental fashion. The result: continuous improvement, and an "experience accelerator" that moves teams and individual performance ahead faster.

The technique should be used more in business and supply chain, was Bourke's theme, and I think he has something there. We have lots of reviews, for sure, but mostly focused on results, not process. Should, for example, there be a debrief at the end of every executive S&OP meeting? Worth pondering.

Nokia's Christian Forster, subbing for another company supply chain exec who had to cancel last minute, told a good but unremarkable story of the company's late pursuit of supply chain excellence. There were three phases: first, major efforts to cut costs through efficiencies, then added a focus on increasing supply chain agility, and now getting more customer centric.

I did like Nokia's notion of "conscious" factories, logistics and warehouses, which combined instrumentation - 10,000 sensors at one Chinese factory - with AI capabilities to drive visibility and responsiveness.

With that, I am out of space. Next week, summary of key breakout sessions - and some more thoughts on the conference as a whole.


Any reaction to this Gartner conference summary? Were you there? What did you think? Let us know your thought at the Feedback button below.


   

On Demand Videocast:

Digitizing the Order Management Process



Orders Still come in Many Different Forms and Systems - Here's How to Get them Under Digital Control

This videocast discusses breaks down all the ways in which orders can arrive, the downstream challenges associated with each, and the benefits of digitization.


Featuring Dan Gilmore, Editor along with Esker's Sarah Joiner.

Now Available On Demand

On Demand Videocast:

Reducing Costs through Automated Inventory Replenishment & Analytics


How Motor City Industrial Taps into Data Visualization to Help Customers Identify Waste, Reduce Inventory


This videocast discusses how to connect people, processes and technology across commerce and supply chain operations to achieve unified commerce.


Featuring Dan Gilmore, Editor along with Joseph Stephens, CEO, Motor City Industrial, Jay Fielder, Supply Chain Technology Manager, Motor City Industrial and Mike Wills, Chief Revenue Officer, Apex Supply Chain Technologies.


Now Available On Demand

On Demand Videocast:

Yes, Retailers and Distributors Can Survive and Thrive by Unifying Commerce and Supply Chain

Integrated Approach will Improve Customer Experience as Smart Retailers Move Beyond Omnichannel

This videocast discusses how to connect people, processes and technology across commerce and supply chain operations to achieve unified commerce.


Featuring Dan Gilmore, Editor and enVista CEO Jim Barnes, a highly recognized industry expert on retail and distribution.

Now Available On Demand

YOUR FEEDBACK

We received a number of emails on our column on our recent study of retail-vendor supply chain relationships, especially around the always controversial subject of chargebacks. Below are a few of those emails, some from our partner RetailWire.

Feedback on Use of Retail Chargebacks and Collaboration

comma

Chargebacks are the symptom, not the problem. The problem is compliance, and it has to be fixed at the root. Chargebacks should be used exclusively to drive home the need for vendors to comply with agreed-upon requirements. The financial hit has impact on compliance. Conversely, collaboration can be achieved only between highly ethical, disciplined businesses. If either side of the transaction lacks those qualities, there will be chargebacks.

 

Bob Amster
Principal
Retail Technology Group



comma

There are two types of chargebacks. One type is very legitimate and the other is simply robbery that retailers institute for themselves doing a poor job.

Three examples: My company sold to Walmart, Target and Walgreens among others. We never had a chargeback from Walmart. They gave us specific instructions of how to service them as a customer and we met their needs. Target was another story. They, of course, priced our product higher than Walmart. Every so often they would claim we were selling our products to Walmart for something less than Target so they would deduct what they thought we were charging Walmart. We were not a huge CPG company. We would fight and often lose.

Then there was Walgreens. They ran a huge nationwide promotion on our product. Bought more than we recommended. When it didn't meet their expectations, they didn't pay us.

Chargebacks to a vendor are OK and deserved when a vendor doesn't comply. But chargebacks to a vendor when the retailer makes the mistake is as bad as robbery.

Gene Detroyer
Professor
European School of Economics


 

comma

 

comma

 

This study shows that both parties feel the other party doesn't have the skill needed to collaborate, both parties feel there is a need for better tools and data visibility and they also both feel there's little interest in collaboration in general. Hmmm. So, we don't think our trading partners have the skills required, we need better data & tools, but aww, heck, we're not really all that interested in this collaboration thing, anyway.

LOL. Seriously?! These barriers are not all that new. I can remember at least back to the '90s when we also had little overall interest in collaboration. Everyone has talked about it for years. But talk is cheap. Investing in the right tools available today to capture that "dark data" and reap real-time supply chain insights must require significant skills and budget on both parties' parts, right? Not necessarily. I think this is more of an awareness issue, than a level of interest issue.

Chargebacks are probably necessary as long as we continue to operate in the way we have been for years. There will take some key disruptors in the industry to step up and take on this challenge.

Ralph Jacobson
Global Retail and CPG Sales Strategist
IBM



comma


SUPPLY CHAIN TRIVIA ANSWER

Q: The Walmart RFID mandate for RFID tagging cases for its top 100 suppliers was announced in what year?

A: 2003 for January 2005 tagging - but course the program fell apart before the mandate really kicked in.

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