The dangers of focusing only on the supply chain's last mile
In a world where companies are under increasing pressure to tighten product time-to-market, improving efficiency at every stage of the supply chain is a must.
Sue Welch is the Founder and CEO of Bamboo Rose, a collaborative B2B platform that combines intelligent product life-cycle management, sourcing, and global trade management.
In just about any circumstance, it'd be foolish to invest all of one's resources in the
final steps of a process without building a strong foundation for that process up front. It's
impossible to complete a doctoral dissertation without investing in years of early education
to solidify the language skills required to write even the most basic of papers. It would be
inadvisable, even dangerous, to run a marathon without first focusing on the initial training
that makes those final strides across the finish line possible.
The impulse to focus on the final steps, rather than on maintaining balance and focus
throughout a process, seems absurd. So why do so many organizations invest the majority
of their resources in bolstering their performance in the "last mile"—the phase when
products move from warehouse to customer—of their supply chains?
New tools and technologies not only have expedited the activities carried out in the last
mile of the supply chain but also have made them more reliable, transparent, and cost-effective.
The time frame from product development to delivery has been condensed, which is of the utmost
importance in the new era of nearly on-demand retail. It's no surprise, then, that eliminating
latency and opacity in the part of the supply chain where most of the actual movement of goods
occurs has received the greatest attention from companies that are responding to the pressures
of modern retailing.
However, no matter how efficient shipping and delivery might be, the entire effort can
potentially be sabotaged by inefficient product development and other obstructions or
oversights that may occur in the mid-stages of the supply chain. Consider that the typical
product-development cycle is a largely linear process. Too often, critical input doesn't
arrive until late in the game, requiring a redo, or at least an adjustment to the process.
If, for instance, you're designing a new teak coffee table, you could take a trip to Indonesia,
evaluate samples from multiple suppliers, keep track of your thoughts with a combination of
Evernote files and JPG photos, and spec out the product for a physical sample—only to
find out that while you may have identified the best source for teak, the latest consumer
trend in coffee tables is actually marble, not wood. After all that time, expense, and
effort, you now have to go back to the beginning of the process. So although it may seem
intuitive to save input gathered from the last mile until the end of the process, it would
be much more efficient to get that feedback earlier on—not just in the beginning stages,
but also throughout the product life cycle.
New tools can help buyers avoid that conundrum by fostering collaboration from all levels
of the supply chain. With the support of technology, the product-development process truly
becomes collaborative instead of linear, and each party, from designer to sourcing executive
to retailer, can weigh in at all stages of product development. Meanwhile, you can ditch the
Evernote plus JPG filing system, because today's retail technology makes sharing visual and
social—more like what you're used to seeing in your personal life.
The power of having time on your side
Today the most effective companies focus not just on the last mile, but also on allocating
resources to achieve balance throughout the end-to-end process. But how can organizations
speed up product development and other early-stage processes that don't involve as much
physical movement of inventory?
Product-development teams spend significant time on what we think of as administrative
tasks during the sourcing, supplier-selection, and product-development phases, also known
as the "first mile." Most are still sharing cumbersome spreadsheets and haphazardly snipped
screenshots back and forth through cluttered e-mail chains. Such inefficiencies can put
teams at risk of missing internal deadlines and exceeding cost limits.
Using technology to collaborate and co-create through real-time sharing of ideas and
information streamlines the product-development process and gives teams more time to be
creative and stand out from the competition. Freeing time that traditionally has been
spent passing spreadsheets back and forth among e-mail chains with 40 participants, each
chiming in with minor revisions over the course of a week, is one of the most powerful
ways to drive efficiency in the first mile. As the American Psychological Association
states, "With increased time pressure, you take the simplest pathway, not one that's
elegant or creative. But if you're able to spend more time exploring the maze, you're
more likely to hit on exciting or new solutions."
Organizations would never dream of sacrificing speed, precision, and cost-effectiveness
in the last mile of the supply chain. Every cent saved per mile is viewed as a major win.
Neglecting the opportunity to similarly increase efficiency throughout the supply chain,
including the earlier stages, is "penny-wise and pound-foolish." As the margin for
error continues to narrow, companies can't afford to overhaul just one aspect of their
supply chains and ignore less visible areas like product development.
The surge of “nearshoring” supply chains from China to Mexico offers obvious benefits in cost, geography, and shipping time, as long as U.S. companies are realistic about smoothing out the challenges of the burgeoning trend, according to a panel today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
Those challenges span a list including: developing infrastructure, weak security, manual processes, and shifting regulations, speakers said in a session titled “Nearshoring: Transforming Surface Transportation in the U.S.”
For example, a recent Mexican government rail expansion added lines to tourist destinations in Cancun instead of freight capacity in the Southwest, said panelist Edward Habe, Vice President of Mexico Sales, for Averitt. Truckload cargo inspections may rely on a single person looking at paper filings on the border, instead of a 24/7 online system, said Bob McCloskey, Director for Logistics and Distribution at Clarios, LLC. And business partners inside Mexico often have undisclosed tier-two, tier-three, and tier-four relationships that are difficult to track from the U.S., said Beth Kussatz, Manager of Northern American Network Design & Implementation, Deere & Co.
Still, dedicated companies can work with Mexican authorities, regulators, and providers to overcome those bottlenecks with clever solutions, the panelists agreed. “Don’t be afraid,” Habe said. “It just makes sense in today’s world, the local regionalization of manufacturing. It’s in our interest that this works.”
A quick reaction in the first 24 hours is critical for keeping your business running after a cyberattack, according to Estes Express Lines, the less than truckload (LTL) carrier whose computer systems were struck by hackers in October, 2023.
Immediately after discovering the breach, the company cut off their internet, called in a third-party information technology (IT) support team, and then used their only remaining tools—employees’ personal email and phone contacts—to start reaching out to their shipper clients. The message on Day One: even though the company was reduced to running the business with paper and pencil instead of computers, they were still picking up loads on time with trucks.
“Customers never want to hear bad news, but they really don’t want to hear bad news from someone other than you,” the company’s president and COO, Webb Estes, said in a session today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
After five or six painful days, Estes transitioned from paper back to computers. But they continued sending clients daily video updates from their president, and putting their chief information officer on conference calls to answer specific questions.
Although lawyers had advised them not to be so open, the strategy worked. It took 19 days to get all computer systems running again, but at the end of the first month they had returned to 85% of their original client list, and now have 99% back, Estes said in the session called “Hackers are Always Probing: Cybersecurity Recovery and Prevention Lessons Learned.”
As the final hours tick away before a potential longshoreman’s strike begins at midnight on the U.S. East and Gulf coasts, experts say the ripples of that move could roll across the entire U.S. supply chains for weeks.
While some of the nation’s largest retailers were able to pull their imports forward in recent weeks to soften the blow, “the average supply chain is ill-prepared for this,” Tom Nightingale, the former CEO of AFS Logistics, said in a panel discussion today at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
Despite that grim prognosis, a strike seems virtually unavoidable, CSCMP President & CEO Mark Baxa said from the stage. At latest report, the White House had declined to force the feuding parties back into arbitration through its executive power, and a voluntary last-minute session had failed to unite the International Longshoremen’s Association (ILA)’s 45,000 union members with the United States Maritime Alliance that manages the 36 ports covered under their expiring contract.
The ultimate impact of a resulting strike will depend largely on how long it lasts, the panelists said. With a massive flow of 140,000 twenty foot equivalent units (TEUs) of shipping containers moving through the two coasts each week, each day of a strike will require 7 to 10 days of recovery for most types of goods, Nightingale said.
Shippers are desperately seeking coping mechanisms, but at this point the damage will add up fast, whether a strike lasts for an optimistic “option A” of just 48 to 72 hours, a pessimistic “Option B” of 7 to 10 days, or even longer, agreed Jon Monroe, president of Jon Monroe Consulting.
The first full day of CSCMP’s EDGE 2024 conference ended with the telling of a great American story.
Author and entrepreneur Fawn Weaver explained how she stumbled across the little-known story of Nathan “Nearest” Green and, in deciding to tell that story, launched the fastest-growing and most award-winning whiskey brand of the past five years—and how she also became the first African American woman to lead a major spirits company.
Weaver is CEO of Uncle Nearest Premium Whiskey, a company she founded in 2016 and that is part of her larger private investment business, Grant Sidney, Inc. Weaver told the story of Uncle Nearest—as Nathan Green was known in his hometown of Lynchburg, Tenn.—to Agile Business Media & Events Chairman Mitch MacDonald, in a keynote interview Monday afternoon.
As it turns out, Green—who was born into slavery and freed after the Civil War—was the first master distiller for the Jack Daniel’s Whiskey brand. His story was well-known among the local descendants of both Daniel and Green, but a mystery in the larger world of bourbon and a missing piece of American history and culture. Through extensive research and interviews with descendants of the Daniel and Green families, Weaver discovered what she describes as a positive American story.
“I believed it was a story of love, honor, and respect,” she told MacDonald during the interview. “I believed it was a great American story.”
Weaver told the story in her best-selling book, Love & Whiskey: The Remarkable True Story of Jack Daniel, His Master Distiller Nearest Green, and the Improbable Rise of Uncle Nearest, and has channeled it into an even larger story with the founding of the brand. Today, Uncle Nearest Premium Whiskey is made at a 323-acre distillery in Shelbyville, Tenn.—the first distillery in U.S. history to commemorate an African American and the only major distillery in the world owned and operated by a Black person.
Weaver and MacDonald's wide-ranging discussion covered the barriers Weaver encountered in bringing the brand to life, her vision for where it’s headed, and her take on the supply chain—which she said she views as both a necessary cost of doing business and an opportunity.
“[It’s] an opportunity if you can move quickly,” she said, emphasizing a recent project to fast-track a new Uncle Nearest product in which collaborating with the company’s supply chain partners was vital.
Uncle Nearest Premium Whiskey has earned more than 600 awards, including “World’s Best” by Whisky Magazine two years in a row, the “Double Gold” by San Francisco World Spirits Competition, and Wine Enthusiast’s “Spirit Brand of the Year.”
CSCMP’s EDGE 2024 runs through Wednesday, October 2, at the Gaylord Opryland Hotel & Convention Center in Nashville.
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Miquel Serracanta of EAE Business School, Mark Baxa of CSCMP, and Sebastian Jarzebowski of Kozminski University sign an agreement making Kozminski University the newest CSCMP Academic Enterprise Member.
The Council of Supply Chain Management Professionals (CSCMP) and Kozminski University, a business school based in Warsaw, Poland, inked a deal on Sunday night, making Kozminski CSCMP’s newest Academic Enterprise Member.
This three-year collaborative membership will involve Kozminski using CSCMP educational content in its undergraduate supply chain program. As a result, Kozminski’s graduates will leave the program not only with a bachelor’s degree from the school but also certified through CSCMP’s SCPro certification program.
“This partnership emphasizes the global reach of CSCMP’s certification program and its applicability worldwide,” said Mark Baxa, CSCMP’s president and CEO.
Kozminski University’s Academic Director of Logistics and Supply Chain Management Sebastian Jarzebowki was on hand to sign the agreement at the CSCMP EDGE Conference in Nashville, Tennessee. Jarzebowski said that his students will benefit not only from receiving a globally recognized certification but also from joining a network of supply chain professionals.
Kozminski University joins the EAE Business School in Barcelona and the Rome Business School in the CSCMP Academic Enterprise Program. Baxa sees the membership program as a growth platform for the industry association not only in Europe but also worldwide.