I am writing to comment on the article called "Why has CPFR failed to scale?" by Richard J. Sherman, which was published in the Quarter 2/07 edition of Supply Chain Quarterly.
In my opinion, the scalability of the current CPFR business process has been "the elephant in the room" for quite a few years now, so I was immediately ensnared by the title. I wholeheartedly agree with Mr. Sherman's assessment of the current state of collaboration in the supply chain and what needs to happen to get things back on track. The simple fact is that the highest levels of both out-of-stocks and finished-goods inventory in the CPG (consumer packaged goods) supply chain are at the retail store. In and of themselves, higher-level management processes like CPFR were not designed to deal with what goes on day by day, item by item, and store by store.
As Sherman states: "When we collaborate, we need to separate the processes that create demand from the processes that fulfill demand." The basic premise of collaboration is that two (or more) heads are better than one when it comes to trying to predict the future. Best to focus these scarce resources (heads, that is) where they can add the most value: working exclusively on the demand side of the equation (i.e., consumers) and letting the supply side recalculate and respond accordingly.
Jeff Harrop
Principal, Demand Clarity Inc.
Editor's note: Mr. Harrop is co-author of the book Flowcasting the Retail Supply Chain.
One step at a time
As I read through Rich Sherman's article on CPFR (Quarter 2/07), I couldn't help but reflect back on my years heading both information systems and supply chain management at Meijer. (The job later changed to "logistics and customer service.")
Rich and I have had many conversations on the topic of collaboration. We both have advocated collaboration for nearly 30 years, and I agree with everything he has to say. How well we all remember the $30 billion in savings and 40-percent reduction in inventory that rallied the industry around ECR. ECR, CRP, VMI, and CPFR all have their place and they can work, but the statement "Let's all do it my way" comes to mind. …
Trust? Our suppliers would refer to "forward buys" and "diversion"; we would look at making "investment buys" and collaborating with each other to get the biggest economic punch from the pricing programs offered by our suppliers. Only when the focus is on reducing total logistics cost can collaboration succeed.
When Meijer opened a cross-dock center and tested the system with food, we did realize some great savings. However, even with a large percentage of food being cross-docked, it was not perfect. For 65 weeks we kept item movement to the store level and the ad-price level, and we still had to build in safety stock. Consumer demand is too variable and unpredictable.
One thing we learned early on at Meijer was that information technology can give everyone the tools needed to manage supply chain complexities and variability. That's why in the early days we combined management of both supply chain and IT in one department.
At Meijer we did not try to make changes all at once. It is a bit like climbing a ladder: You move up one step at a time, and as you get to the next step, you see things that you could not see before. We never ran out of ideas for improvements as we climbed each step.
From the time we started the collaboration process at Meijer until the time I left, we had reduced our total logistics cost by more than 50 percent. For most companies, savings are there, but it does take time, motivated people, and enabling technology.
A long letter to say Rich's article is right on.
Ed Nieuwenhuis
Grand Haven, Michigan
No to a North American Union
With the opening of countries around the world through so-called "free trade," agreements like the North American Free Trade Agreement (NAFTA) have been pushed as the solution for an underdeveloped country to begin establishing a solid economy. The reality is that this hasn't worked.
After the signing of NAFTA, cheap corn flooded into Mexico from the United States. With the value of their crops reduced to next to nothing, many Mexican farmers were forced to seek employment in extremely low-paying manufacturing jobs from companies that moved to Mexico from the United States. Others fled to the United States as illegal immigrants, widening the gap between Mexico's elite and lower classes.
NAFTA has had negative effects on the United States, too. Nearly 4 million manufacturing jobs have been lost as companies either outsourced or moved their own facilities into countries that have much cheaper production, regulation, and labor costs. Alan Blinder, former vice chairman of the Federal Reserve Board of Governors, told The Wall Street Journal in March of this year that free trade "will put as many as 40 million American jobs at risk of being shipped out of the country in the next decade or two." The decline of the American worker seems to be the trade-off for cheap foreign products for consumers.
And what are these cheap products giving us? In the last two years, U.S. consumers have seen recall after recall of automotive tires, children's toys, pet food, computer batteries, not to mention the food and drug recalls. While the consumer has to deal with the product hazards, currency conditions that are strongly related to consumer demand for cheap foreign goods are, with other forces, causing the dollar to decline. …
The U.S. business community is striving for globalization at the expense of its workers, its economy, and its sovereignty. Under the Security and Prosperity Partnership, the leaders of the NAFTA countries are working to harmonize some laws of the three countries to provide business with easy access to labor and resources, much like the European Union.
While trade between nations can be good, permanent political alliances disguised as free-trade agreements should be avoided because such alliances are hurting workers, consumers, and ultimately the economy. Thomas Jefferson and George Washington both spoke of steering clear of permanent alliances while promoting commerce with all nations. The John Birch Society recommends following their advice.
No doubt some readers of Supply Chain Quarterly are directly benefiting from NAFTA or conduct business with companies that do. Is that a crime? Absolutely not. It is becoming clear, however, that many of the people and organizations that have promoted the development of free-trade areas are also promoting political unions for these areas. Since freedom, security, and prosperity in the United States are secured by the U.S. Constitution, citizens need to begin repealing and dismantling major threats to the constitution, such as NAFTA and the Security and Prosperity Partnership.
U.S.-based supply chain decision makers can help by specifying products from U.S. companies and manufacturers. This may not always be feasible, but ? what price do we place on our freedoms? And how ethical is it to do business with foreign companies at the expense of the American worker, especially when free trade has done little to strengthen economies on either side of our borders?
Bill Hahn
Public Relations Manager
The John Birch Society
The venture-backed fleet telematics technology provider Platform Science will acquire a suite of “global transportation telematics business units” from supply chain technology provider Trimble Inc., the firms said Sunday.
Trimble's other core transportation business units — Enterprise, Maps, Vusion and Transporeon — are not included in the proposed transaction and will remain part of Trimble's Transportation & Logistics segment, with a continued focus on priority growth areas following completion of the proposed transaction.
Terms of the deal were not disclosed but as part of this agreement, Colorado-based Trimble will become a shareholder in Platform Science's expanded business. Specifically, Trimble will have a 32.5% stake in the newly expanded global Platform Science business and will receive a Platform Science board seat. The company joins C.R. England, Cummins, Daimler Truck, PACCAR, Prologis, RyderVentures, and Schneider as a key strategic investor in Platform Science along with financial investors 8VC, Activant Capital, BDT & MSD Partners, Softbank, and NewRoad Capital Partners.
According to San Diego-based Platform Science, the proposed transaction aims to enhance driver experience, fleet safety, efficiency, and compliance by combining two cutting-edge in-cab commercial vehicle ecosystems, which will give customers access to more applications and offerings.
From Trimble customers’ point of view, they will continue to enjoy the benefits of their Trimble solutions, with the added flexibility of the Virtual Vehicle platform from Platform Science. That means Virtual Vehicle-enabled fleets will receive access to the Virtual Vehicle Marketplace, offering hundreds of new and expanded applications, software, and solution providers focused on innovating and improving drivers' quality of life and fleet performance.
Meanwhile, Platform Science customers will enjoy the added choice of Trimble's remaining portfolio of transportation solutions which will be available on the Virtual Vehicle platform, the partners said.
"We believe combining our global transportation telematics portfolio with Platform Science's will further advance fleet mobility and provide our customers with a broader portfolio of solutions to solve industry problems," Rob Painter, president and CEO of Trimble, said in a release. "Increased collaboration between the new Platform Science business and Trimble's remaining transportation businesses will enhance our ability to provide positive outcomes for our global customers of commercial mapping, transportation management, freight procurement, and visibility solutions. This deal will result in significant synergies along with tremendous opportunities for employees to continue to grow in a more-competitive business."
The acquisition comes just five months after Platform Science raised $125 million in growth capital from some of the biggest names in freight trucking, saying the money would help accelerate innovation in the commercial transportation sector.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
Economic activity in the logistics industry expanded in August, though growth slowed slightly from July, according to the most recent Logistics Manager’s Index report (LMI), released this week.
The August LMI registered 56.4, down from July’s reading of 56.6 but consistent with readings over the past four months. The August reading represents nine straight months of growth across the logistics industry.
The LMI is a monthly gauge of economic activity across warehousing, transportation, and logistics markets. An LMI above 50 indicates expansion, and a reading below 50 indicates contraction.
Inventory levels saw a marked change in August, increasing more than six points compared to July and breaking a three-month streak of contraction. The LMI researchers said this suggests that after running inventories down, companies are now building them back up in anticipation of fourth-quarter demand. It also represents a return to more typical growth patterns following the accelerated demand for logistics services during the Covid-19 pandemic and the lows of the recent freight recession.
“This suggests a return to traditional patterns of seasonality that we have not seen since pre-COVID,” the researchers wrote in the monthly LMI report, published Tuesday, adding that the buildup is somewhat tempered by increases in warehousing capacity and transportation capacity.
The LMI report is based on a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
That hiring surge marks a significant jump in relation to the company’s nearly 17,000 current employees across North America, adding 21% more workers.
That increase is necessary because U.S. holiday sales in 2023 increased 3.9% year-over-year as consumer spending grew even amidst uncertain economic times and trends like inflation and consumer price sensitivity. Looking at the coming peak, a similar pattern is projected for this year, with shoppers forecasted to drive a 4.8% increase in holiday retail sales for 2024, Geodis said, citing data from Emarketer.
To attract the extra workforce, Geodis says it will offer competitive wages, peak premium pay incentives, peak and referral bonuses, an expedited payment option, and flexible schedules. And it’s using an AI-powered chatbot named Sophie to serve as a virtual recruiting assistant.
“We acknowledge the immense responsibility we have to our customers to deliver exceptional service every day, and this is especially true during peak season,” Anthony Jordan, GEODIS in Americas Executive Vice President and Chief Operating Officer, said in a release. “Because peak season is the most business-critical sales period of the year for many of our retail clients, expanding our workforce is vital to ensure we have a flexible, dynamic team that can handle anticipated surges in demand.”