WERCWatch
July 14, 2011

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PRTM: Supply chain flexibility is new business imperative
@Risk
Supply chain flexibility requires considerable investment, as well as a top-down commitment from C-level execs. However, that "extra" effort is proving very worthwhile, as companies that implement operational flexibility are now realizing significant business benefits, according to new survey results released recently by PRTM. Based on interviews with senior executives from 150 companies across industries, the new research identifies five specific "levers" that increase operational flexibility, drive revenues and cut costs. According to PRTM, companies that have implemented the five supply chain flexibility levers have achieved, on average, a 12-15 percent revenue increase while reducing supply chain costs by 8-10 percent. The following are a few survey results, grouped around PRTM's supply chain flexibility levers.More

No toying with bar codes
Material Flows
It's pretty easy to get an infant's attention. Just wave something bright and shiny in front of it and the rest of its world disappears. We media types are like that, although sometimes I think the bigger the media outlet, the bigger the baby. A few weeks ago, one of the biggest — The Wall Street Journal — latched onto a bright shiny toy that many of us less pampered kids in the trade press got used to a long time ago: bar codes. I'm not saying bar codes aren't important toys. Let's just say they're mature, and other toys have captivated the trade press in recent years — things like image-based bar code reading and QR codes. But just as some toys never die (Slinky anyone?), bar codes aren't going anywhere.More

Will bar code base self-scanning systems doom item-level RFID tagging in CPG to retail?
Supply Chain Digest
The Supply Chain Digest editorial staff writes, "As we've noted in the past, the initial vision of an RFID-enabled consumer packaged goods to retail supply chain that was the foundation of the electronic product code movement starting in 2003 has largely floundered, even as there is now at last strong activity in such areas as apparel. While many believe that someday the value prop for item-level RFID in mainstream retail (grocery, mass merchandise) will emerge as tag costs go low enough, we wonder if the emergence and apparent popularity of bar code-based mobile self-scanning systems will mean the need for or potential advantages of item-level RFID in most retail applications never will get off the mat."More

Execs fear rise in supply chain cyber attacks
@Risk
Even though many have had to cope firsthand with disruptions caused by recent natural disasters such as Iceland's volcanic eruption or the earthquake and tsunami in Japan, executives now see cyber attacks — rather than physical attacks — as potentially the most damaging to their supply chains, according to new report from PwC. The report, Volume 4 of the Transport & Logistics' 2030 series Securing the Supply Chain, is a joint project between PwC and the Supply Chain Management Institute at EBS Business School in Germany. It warns that cyber attacks are now so sophisticated that any business, or even country, could be at risk.More

Can RFID technology stop the million-dollar waste of food?
RFID Journal
Globally, food waste is a major economic and environmental problem. A 2009 study conducted by the U.S. National Institutes of Health found that up to 40 percent of food in the United States is wasted due to a number of factors, including exposure to unsafe temperatures as the food travels from farms to stores or restaurants. This leads to billions of dollars in annual losses for producers and retailers alike. "If a grocer turns away an entire truckload of strawberries due to spoilage, that's a $40,000 loss," says Michael McCartney, founder and principal at QLM Consulting, an RFID consulting firm serving the food industry.More

US, Mexico resolve cross-border trucking dispute
Material Handling & Logistics
The United States and Mexico finally have resolved the dispute over long-haul, cross-border trucking services between the two countries. The signing of the agreement will pave the way for Mexico to lift retaliatory tariffs it imposed more than two years ago on more than $2 billion in U.S. manufactured goods and agricultural products. The agreement also provides that Mexico will suspend 50 percent of the retaliatory tariffs within 10 days. Mexico will suspend the remainder of the tariffs within five days of the first Mexican trucking company receiving its U.S. operating authority. As a result, Mexican tariffs that now range from 5 to 25 percent on various U.S. agricultural and industrial products such as apples, pork products and personal care products will be immediately cut in half and will disappear entirely within a few months.More

Fashion tracked by French logistics company
RFID Journal
French third-party logistics company SeD Logistiques is using an ultrahigh-frequency Gen 2 RFID system from Tagsys at its Paris distribution center to improve the services it provides to its brand-name apparel manufacturers, by moving products faster and with less risk of inaccuracies than its competitors. The solution provides the company with the ability to automatically track the receiving, packing and shipping of fashion apparel, and to provide one of SeD's apparel customers with data regarding its products' movements through SeD's DC, thereby enabling the customer's own inventory management and stock replenishment.More

New logistics hub under development in Florida
Material Handling & Logistics
Jones Lang LaSalle, a professional services firm specializing in real estate, has announced that it will be the exclusive project adviser to Treasure Coast Intermodal Campus on its more than 4,000 acre site in southwest St. Lucie County in Florida. The Treasure Coast Intermodal Campus will be developed into a logistics hub over the next 30 to 35 years, with pre-development efforts currently under way. "TCIC will create an entirely new industrial model for Florida, ultimately providing a connection to direct on-dock rail service at Florida's key seaports, along with easy access to all major highways," says John Carver, who heads Jones Lang LaSalle's Ports Airports and Global Infrastructure practice.More

Report: 3PLs doing better than economy overall
Fleet Owner
In its recently released TIA 3PL Market Report, the Transportation Intermediaries Association noted that, in general, TIA members outperformed the economy. The report, which represented nearly 1.2 million shipments and just under $1.9 billion in total revenue for Q1 2011, found that — compared to Q1 2010 — total shipments increased 7.4 percent and total revenue increased 17.1 percent. Profit margins declined, however, down 2.9 percent from 15.3 percent to 14.9 percent. "3PLs continued to grow, expand and change their businesses," said TIA president and CEO Robert Voltmann. "This is TIA's 10th quarterly report on the 3PL industry; it is also the most comprehensive report having incorporated a number of new data reporting elements."More

Supply chain software: Looking for money to fund a new WMS?
Modern Materials Handling
"Go to where the money is, and go there often." That phrase is attributed to Willie Sutton, the famous bank robber. But it could have been said by Brett Febus, president of Insource, a spend management software firm. Not that Febus is a bank robber, mind you. Spend management is not an application or service we would normally talk about. But Febus has coined a term for what Insource does for clients: "Print the money, spend the money." "Ultimately, we are helping our customers make improvements to their supply chain operations," he says. "That let's them print the money they can spend on projects inside the four walls."More

John Morris: Supply chain strategies require flexibility, diversity
Area Development Online
Logistics is just not easy right now. Corporate America currently is facing significant challenges in the disciplines of logistics, location strategy and real estate. Even the best and brightest supply chain companies — those whose blueprints for managing these three interdependent variables have been considered best in class — are beginning to consider the need to alter their practices moving forward. Indicators suggest that we are entering a new paradigm, one in which success will depend on flexibility and diversity. Signs of an economic recovery abound.More

'Overly complex' supply chain management applications under fire
Procurement Leaders
Most business software users find supply chain management enterprise applications overly complex and would rather use Microsoft Excel or similar systems, a new poll has found. According to an IFS North America study, 75 percent of respondents report using desktop spreadsheet software instead of their company's enterprise procurement software when those applications get difficult to use.More

Leveraging the benefits of being a rookie employee
Harvard Business Review
JD Schramm writes, "Hundreds of my Stanford students graduated last month and are about to enter new jobs, along with hundreds of thousands who graduated from other universities. They will all be 'rookies' yet again in their careers. Conventional wisdom tells us to get past the rookie stage in our career and grow into something more 'elevated and respected.' Yet, I will buck conventional wisdom and suggest that there are some amazing advantages to being a rookie that new employees should milk while they can. Also, specific strategies exist that rookies can deploy within the first few days and weeks on the job, and there are a few common mistakes they can avoid."More

Cancer claims life of supply chain legend Dr. Don Bowersox
Supply Chain Digest
Dr. Don Bowersox, who from his place at Michigan State University was one of the true pioneers in the development of supply chain thinking and was extremely well liked those who knew him, passed away recently in his summer home in Traverse City, Mich., after losing a bout to cancer. He was 79. According to Dr. David Closs, chairman of the Department of Supply Chain Management at Michigan State, Bowersox died July 4 after experiencing a return of cancer (this time in his throat) for which he was beginning to receive chemotherapy. His system reacted very negatively to the chemotherapy and that led to his death.More

Larry Prusak: The 1 thing that makes collaboration work
Harvard Business Review
If I had to pick the one thing to get right about any collaborative effort, I would choose trust. Yes, trust. More than incentives, technology, roles, missions or structures, it is trust that makes collaboration really work. There can be collaboration without it, but it won't be very productive or sustainable in the long run. You might rush to agree, but first consider that what a leader needs to do to generate trust in an organization.More

Forklift Rodeo promotes skill, safety
Material Handling & Logistics
To encourage safe and efficient operation of its material handling equipment, Dot Foods holds an annual "Forklift Rodeo Grand Nationals" competition. At this year's event, held June 23, three Dot Foods warehouse employees won a free vacation after earning top scores maneuvering through an obstacle course on a sit-down forklift, a mule (pallet jack) and a narrow-aisle reach truck. As part of the competition, 30 competitors from Dot's eight distribution centers carried a trash can with a basketball balanced on it through a timed obstacle course, with penalties for safety infractions or contact with the course boundaries.More

Bob Trebilcock: 2010 was a solid year for supply chain software
Modern Materials Handling
2010 was a solid year for supply chain management software. The industry posted a 10 percent increase over 2009 and about $4.6 billion in revenue for SCM applications, not counting procurement. The numbers come from Chad Eschinger, research director with Gartner. Eschinger and Gartner also provided the compilation for our annual list top 20 providers of supply chain management software, ranked by revenue. The article will appear in the July issue of Modern. In addition to the numbers, Eschinger identified the trends that drove last year's rebound. Much of the growth may have been the result of pent up demand. A number of projects went forward that had been stalled because of the recession. But Eschinger also identified several key drivers.More

Risk in new-product launches made greater when all parties, including supply chain, aren't on board
SupplyChainBrain
New products are inherently risky in meeting quality objectives, whether the defects are real or simply perceived by the customer. J.D. Power and Associates released the results of its automotive quality survey in June, highlighting this challenge for some companies that topped the list last year. In the survey, Ford ranked 23rd, compared to fifth place one year earlier, and Hyundai dropped from seventh to 11th place. The Wall Street Journal identified new product designs as a factor that led to this poor performance. Ford had negative feedback on its new touchscreen entertainment and phone system, while Hyundai struggled with new designs of the Sonata and Elantra vehicles. Both of these companies will no doubt rebound to top the list again. Yet, this demonstrates the challenge all companies face in meeting customer demand for quality amid increasing complexity.More

Supervalu wins big with super-automation
DC Velocity
If any industry lives by the proverb "A penny saved is a penny earned," it's the grocery business. Grocers operate on notoriously thin margins. Focusing on keeping costs low and operations swift and efficient is deeply embedded in their business makeup. Supervalu is a case in point. One of the nation's largest grocery retailers and wholesalers, it operates such well-known stores as Albertsons, Jewell-Osco, Acme and Save-a-Lot. The company traces its roots to a grocery wholesale business founded in Minneapolis some 130 years ago. It has been growing steadily ever since.More