Dec 06

The importance of your neighbors

In recent issue of Trains Magazine, there was a story about a regional railroad crew in the southeast United States. Enroute they would stop the train, feed an apple or some similar fruit to a mule who was always smart enough to walk to the tracks when he heard the train coming. The crew when asked why they did it, they said yes it was enjoyable making the stop but it was important to that their business had good relations with the people who resided in the area.

Supply Chain risk which has been written about a lot. There are worries about severe weather, earthquakes and other natural disasters. There is worry about supplier of product or transportation services disappearing or being unavailable for a long time. But its your neighbors in your community who make the zone ordinances which allow your business to operate and operate efficiently. It is likely your neighbors will be the supply of people who might hire to help run your supply chain.  So it is part of the company’s effort to ease and eliminate supply risk, good neighbor relations are important.

So planning community relations is part of the process. Maybe it having school children to explain what you do. Maybe it is supporting your local community college and having them having supply chain classes. Maybe it is keeping in contact with local government. After all what you do, helps a community grow.




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Oct 24

The S&S-Sales Force and Supply Chain

Sales forces want to sell. Supply Chain wants to deliver, but with understanding of the cost to the enterprise and the physical realities of warehousing and transport.  The part in the last sentence after the word “but” is where the complexity comes in the relationship between sales and the supply chain.

Meeting customer expectations for expedited delivery costs money.  Getting products shipped in peak demand periods is hard.  Customer delivery requirements can be difficult. If every customer load is hot, there is an issue there. Supply Chain sometimes tells the sales force personnel that customer expectations can not be met. Ugh! It is enough to make you thing Supply Chain thinks the customer is only somewhat right.

How can one approach these challenges? It fairly important to create an environment where sales can be successful. The approach that has the greatest chance of success is one where the company, supplier of the customer, creates value for that customer.

Let’s take a look at the issue of every load for the customer is hot, many times requiring premium transportation which hurts the supplying company profit.  Supply Chain should encourage sales not to just react to hot loads but to find out why they are happening. If you can lower the customer’s stress and therefore lower his costs that might be a win for everyone. I seen this type of problem resolved in many ways ranging from the simple, having customer service call every few days to the complicated where the supplier plans customer demand.

The ideal solution lower both supplier and customers cost and builds a stronger relationship which keeps the customer buying from your firm.

Most organizations have at least an annual sales meeting. Representatives from the Supply Chain / Logistics area of the company should attend at least a part of the meeting, to hear issues and complaints.  Communication will spark ideas to improve performance of both meeting customer expectations, in some cases shaping those expectation, and improving company processes to serve those customer needs.

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Oct 10

Nuts and Bolts of Software

You can call it nuts and bolts or blocking and tackling. It is easy to take a 30,000 feet view of software and all the grand things it can do. In the case of supply chain software, to enable any software to be established, work and do its thing, it takes a team effort on many levels of the corporation.

Almost any corporate IT department is overwhelmed with work it can do. Somehow the business realities of customer requirements, management requirements, financial requirements and in some case legal requirements need to be meshed. In the supply chain we talk about visibility to the process a lot. For the IT personnel, many times they do not have the visibility to the needs of the business to do their best work.  That can have bad ramifications.

Let’s look at the worst case scenarios for software implementation. The software has start date for entire company and its bombs, making impossible to conduct business. Sadly this happens. Or another situation, that is also sadly too common; software is suppose to save X amount of dollars or percentage of cost and it does not come anywhere close to meets it proposes goals.

It is the nuts and bolts of the software process, or put another way with different words,  the implementation process that both enhances the probability of success of the project and equally important prevents it from failing.

A good implementation process should include the following in its plans:

  1. Communication with the people affected by the software, to mine their business experience in the area the software is affecting and use that knowledge to program the details of the software to work in a real business environment. Provide the visibility of the process to the people planning the software.
  2. Related to that, it desirable for the people in will actually use the software with feel they have a stake in its success. If they don’t they will try to do everything they can to work around the software because its gets in their way to be successful. So both the old process and the new process suffer.
  3. Start testing and implementation in some area of the company, one plant, one sub-unit, and learn how it works there before expanding it to the whole company.
  4. Communicate not only the successes but also the challenges.  That tells people its more than code, more than some crazy top management project, its about serious effort to improve the companies operations.
  5. Every software has limitations.  Learn what they are and put processes in place to deal with these issues.
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Aug 29

Blockchain and the Supply Chain

In the August 29, 2016 edition of Bloomberg Business Week in the opening remarks section there is article by Olga Khariff and Peter Coy about Blockchain, a software that came about to control Bitcoin and other electronic currencies.  This software is about controlling a large system, such as a currency system and making it visible. It limits a given item such as money token to one use per person.  In my mind’s eye it reminded  me of a complex supply chain.  So what is the value of Blockchain to the supply chain? It is a system software, so in situations of drastic change such as a large natural disaster this software will have limitations, because the system cannot easily transform. So after writing the software probably can not handle a disaster, I will turn around and say this will be great software for post disaster planning and getting the right support items.

The dreamers of this software, and yes you need dreamers to innovate, champion, and execute any new idea, see as a way to end corporations forever with a group think management style.  No more CEO’s.  Everybody in the system will be equally powerful. Since most of these people hate bureaucracy and corporations, I suspect they have not spent time looking how organizations survive and prosper through change management with a champion at the top. You can dislike wage disparity between CEO’s and everyone else, and still see a need to have a constructive organization direction.

So don’t let the political rhetoric distract for the value of this software which allows all parties to use their resources in the system to create an action, and in the supply chain that will be about getting something moving or stored.  The software specializes in making transaction visible, so a second tier supplier actions would be visible to the primary supplier and the end user, useful information to manage the system efficiently. In a set up supply chain that is running relatively smooth over a period of time, the attraction of this software should be self event.

But the software is not going to predict a change like going from DVD’s to music apps and then back to long running records. Or a earthquake in Japan knocking out sizable production, and new alternatives will be needed much faster than the software can be changed. The needs of the market place will fundamentally change. Any software which promotes a system will be a hindrance in drastic change situations

Speaking of disasters, I see a good use the Blockchain software might be very useful in a post disaster situation. Frequently after disasters, the blizzard of donations after the terrible event rarely meets the needs of what is needed. You might have to few blankets, but way too many pots and pans. I could see non-profits finding value of a software where one could see what is needed and make the donation. Much of this type of demand can reasonably anticipated so software can mostly be set up in advance and activated on short notice.

It will be interesting to see how this plays out.

Posted in Infrastructure, Learning from failure, Logistics, Logistics Software, Management, Patient transport, Public Policy, Supply Chain, Sustainability, Transport Security, Transportation, Warehousing | Tagged | Leave a comment
Aug 15

Benchmarking Legal in Transportation

File this essay on there has to be a better way department.  How often as a transportation contract between a carrier and a shipper taken months to resolve, usually over one word, liability?

After months of negotiation, red-lining contracts, sending out emails, and having a bunch of meetings a contract; it is resolved in a way almost all parties could have predicted at start. Carriers know what shippers will want. Shippers know what carriers will want. Yet the original contract contains pie in the sky liability sentences which could only exist if due diligence is not done by the other party to the contract. Yes it happens, but 99% of the time, it does not.

It is safe to say that lawyers are trained to be advocates for liability protection for their clients being they shippers or carriers. It probably also safe to say also that lawyers were never trained to due the process efficiently. Trained appropriately on the details of law, but left out on how to get this done efficiently.

So let me propose some professional organization, provide contract benchmarks. Say this is the standard on liability that 75% of the shippers and carriers agree to. It would be more efficient and save time if the standards were agreed upon being written down on paper. Negotiation time would be cut in probably by 80% and a clear path to written contract could be accomplished.

So you ask why will only lawyer or lawyer firm agree to that since it would cut the amount of revenue each contract brings in? Corporate lawyers are going to be paid anyway and they can be incentivized to bring efficiency into the process.  Carrier attorneys can be rewarded the same way. And ultimately it will be a survival strategy, somebody is going to come in with a legal business model to promote efficiency and take a large share of the business anyway.


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Jul 26

Driverless Trucks-Really?

There are lots of driverless trucks articles out of late. There is talk that a truck can do 1000 miles in one day therefore make multi-warehouses redundant. Realizing there is already one driverless truck out there Volo is testing in Europe, let’s just take a step back to consider what it will mean to logistics and the supply chain.

I am one who believes that the driverless truck technology will be of value but in limited circumstances. Public acceptance will be an issue. The ability to program for the complexities of urban delivery though makes me a skeptic about its use for local operations.

Let’s talk long haul interstate or divided highway situations. That is a controlled situation which relatives few anomalies.  If I was the head of the American Truck Association,  I would be thinking how in the world to make this acceptable to the public who is deeply suspicious of trucks in general.  I would be looking even before the technology is available for an interstate highway run test area to prove the concept to the public, that it is safe and viable. There may need to ab internet site or phone number, people can call if there is incident in its operation, which I think would offer some assurance to the public that safety is being considered. Any responsible operator of carriers, thinks safety day in and day out, but one spectacular accident involving a truck, to easily dissuades the public that is money trumps safety. An interstate highway operation would be probably easiest to control and be easiest to defend against cyber security issues.

Despite the ability to avoid human hours of service limitations, with the need for quick delivery in major urban areas, I doubt there will be significant changes in the number of warehouses and location of main warehouses in the country.  Today’s drivers can do 500 to 600 miles which is an overnight journey. The fact you can do 1000 miles in one vehicle in 20 hours really is too slow for much of e-commerce.

Pick up and delivery deals with a massive number of unusual dock and terminal situations particularly in older urban environments.  Can a machine handle blocking off the street while a truck backs into a dock off the street?   There are a lot of judgements drivers make in that situation based on situations sometimes fairly far out and down the road.  For an individual site you could program for it. It would be expensive to consider and hard to program all the possibilities for local pick up and delivery. I suspect that trucks in non-controlled environment of local streets is more of a cyber-security risk.

It will be interesting to see how this plays out.


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Jul 10

Bring the value discipline to the supply chain

This essay is about being your best self and applying it your work environment. Supply chain practitioners bring to work environment, process skills, organizational skills, supply chain skills, and financial skills. These are all important disciplines brought to the work environment. Let us not forget, though, that our best personal values is an important of the disciplines you bring to work.

Sustainability is great place to start when talk about bringing good values to your business processes. Let’s look at the environmental aspects of sustainability, a word that encompasses much more that. While the political system has had difficulty with environmental actions, many business firms decided that that where there were financial benefits to be environmental responsible, the organization would pursue them. Actually it was not the organization, it was the individual in them who took this initiative, in no small part because of their environmental consciousness. These changes have made significant dent in carbon in the atmosphere process. Yes, there are actions that organizations could take because they are not financially justified. It is better to make what progress you can, than none at all.

Supply Chain is a people business no matter how much technology is used in it. People determine what needs to move, when, at what service level, and perform the warehousing and transportation of goods. When things go wrong, people need to perform to correct the issue. In dealing with people, the values of compassion, empathy and inclusiveness are important assets and as I will discuss, a cost benefit.

In talking about values, we can start out with integrity, with its benefits of trust and ease of flow in the supply chain system. A simple example of a situation where trust is valuable.  If you know your supplier will be truthful about shipping inventory, you will not need as much safety stock of inventory as if you don’t trust that person’s statements.

But we know there are people with integrity, you can trust what they said, but do not have compassion, empathy or inclusiveness. It certainly possible you might remember a boss in your career who was not compassionate, emphatic, or inclusiveness. Think about what that would have meant if that boss did have those qualities and how much more you would have given the organization were those values there.

By nature of the supply chain, change is inevitable. That means jobs will need to change, sometimes eliminated, sometimes new ones will be established. Vendors, some long term, will find their work gone or there may be more work for them.  If you include the discipline of your best personal values including compassion, empathy and inclusion, it will help deal with the people aspects of these changes. If one doesn’t include this in your process, it increases the chance of surprise cost increases from people not working together or in some cases sabotaging the change.

Like the sustainability example above, doing what you can with the values discipline does make a difference in dealing with the ramifications of change.

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Jun 19

Being Thrown Into The Supply Chain

Particularly in mid-size and smaller organizations, you might have an acquaintance or friend who out of the blue is assigned by their management to handle the supply chain. They might know you have experience in the supply chain and ask for your advise. While, probably,  this is happening due to many supply chain educational opportunities available to young adults, it still not uncommon.

One you are the experienced one, this becomes a challenge as you have so much information floating in your mind, you many not know where to begin. But as always, listening to the rookie’s understanding of the situation is a great place to start.

I found after that the following was useful to the new comer to the field. Ask him to determine what metrics are being used to judge the operation. You can mention beyond cost, our metrics of service performance and throughput measures. By saying this you are helping the rookie focus about what is currently important in the operation.

Being experience, you are likely to know of appropriate professional organizations and educational institutions in the area. This can be a source of information for the new comer.

Lastly you will probably know reputable and professional run vendors in the field. There are still hundreds of vendors out there ranging from warehouse operators to carriers to 3PL’s. Just giving that person a place to start is just so worthwhile.


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Jun 06

Freight in Global Cities

Last Thursday, June 2, I attended the Global Transportation Hubs session of The Chicago Council on Global, part of their Global Cities program.  The session was transit-focused and it was clear the thought leaders there had not given extensive amount of thought on freight in these large megacity transportation hubs. Now, I happen to be transit enthusiast, some would call me a transit fanatic. So I enjoyed listening to the speakers but knew there was something missing from the global cities transportation hub description.

So how does freight fit in this overall picture of megacities?  How can it be balanced against land use, economic growth, income equity, and cultural amenities? Can shipper and carrier business interests be balanced with the overall public good?  How can the supply chain industry have planners put freight movement into the equation. This would be far better than just reacting, when something is “bad” is about to happen to freight interests.

I was able to question the panel about where does freight fit in this process? Ginger Evans, who is currently the Commissioner of the Chicago Department of Aviation, responded that freight transportation infrastructure needs to happen outside the cities, citing recent rail infrastructure projects being built outside metro area. Clearly she was thinking of the rail intermodal yards in the Chicago area, south of Joliet, IL and in Rochelle, IL.  Her point was land is at a premium in these mega cities, and transportation which needs large foot prints of land will find the least costly option outside the cities most utilized areas. She felt such close-in projects as the Alameda Corridor which takes rail traffic from Port of Los Angeles and Long Beach in a below ground trench from the port to major rail yards in the area, are not likely to happen in the future.

Having a supply chain background, I know about the increasing demand for fast delivery, same day or even 2-hour delivery windows in those dense, congested, mega cities. I also know for this be economically viable, warehouse and to lesser extent transportation facilities need to be close in to the customers of the products.

So I would encourage supply chain academics and the professional organizations of transportation, supply chain, and logistics to start thinking about its place in large metropolitan area. One of the issues on the urban planners’ plate is on how to provide jobs to the non-professional workers. Certainly encouraging warehousing and transportation jobs is a worthy selling point to those planners.  Making sure there is places to drop freight off street sized for trucks, will decrease urban congestion and increase operator efficiency.

In conclusion, there needs to a conversation about the supply chain and freight movement in urban areas. Supply chain interests would be wise to be a part of the regional planning, both to promote business growth and avoid barriers to their successful operation.


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May 25

Lessons for the Supply Chain from TSA

The long Transportation Security Administration (TSA) lines at airports is in many ways similar to supply chain/logistics issues. Many we will say that TSA is government therefore incompetent, as though the for-profit sector never had a major bankruptcy or a failed supply chain program. The problems TSA has had, certainly have occurred in the supply chain sector. So let us look at their failures to see what we can learn.

This is one of those cases where the issues that causing the problem distracts from the fundamental problem.

The issues that are causing the long lines apparently are:

  1. If audits in 2015 found failures to catch contraband  and led to longer and more detailed searches, lengthening the time for each individual to processed.
  2. The there are roughly 15% less agents in airports today than last year
  3. Stories about high turnover at TSA because of poor management treatment as well as poor treatment by people going through the lines of TSA workers. New people learning the task cannot be as efficient as experienced workers.
  4. The number of airline travelers are increasing.

However the fundamental problem is not understanding who their customers are and putting processes in place to handle its mission. The organization acts if their only customer is the their organization the Homeland Security. They are directing service and paying the bills. But the real customers are the people being screened. They have the influence to affect the service through Congressional and other political entities in the process.

In a supply chain it is easy to become transaction based.  The actual end user the supply chain serves, may not seem to be a part of the process as a third party may be the paying the bills in the process. The end user preferences, though, will decide ultimately decide the success of the business. If the end user does not timely have the product or its frequently damaged in transit, the end user will avoid the product. Your costs and service and seem impeccable to the third party buying the product, but an dissatisfied end user can end your business success.

If the TSA looked at its process to serve its end use customers who have two objectives, travel safely and get through the process quickly, it would have designed the process differently. It would have set goals for time in the line necessary to meet its clearance process. These goals should be public and it is important to make goals clear to all.  TSA would look to eliminate waste in process.  For example, TSA pre-clearance passengers only receive TSA Pre about 60% of the time. It probably should be more likely 99.9%.

My guess is that if the top managers of the TSA headed to their employees’ lounge and listened to the people actually doing the work, they would have known that signficant problems were going to occur before they did. Part of any effective supply chain, is to get such information up the management ladder.  My guess is management never thought about listening. Again, this not only a government problem, this is frequent in the for profit sector.

Successful supply chains are about breaking silos for the overall good of the organization. Look at the process holistically and not on a transaction basis.  Unfortunately I am not hearing these type of words coming from public comments the TSA management has made. And yes, not heard these words in for profit organizations also.



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