Here's our roundup of events at the Council of Supply Chain Management Professionals' annual CSCMP EDGE 2019 conference held in September in Anaheim, California.
Rick Blasgen, CSCMP's president and chief executive officer, speaks during the opening session at EDGE on Monday, September 16 keynote. Photo courtesy of Tessa Schutz from Kranbox Video & Photography.
With its focus on cutting-edge technologies, leadership development, and industry disruptors, the Council of Supply Chain Management Professionals' annual conference lived up to its new name: CSCMP EDGE. Attendees at the event, held in Anaheim, California, USA, in September, represented 39 countries and all facets of the supply chain. They came both to gain a glimpse of the future of the discipline and to find solutions that they could implement today. For as CSCMP President and CEO Rick Blasgen (at right) said, "Being a supply chain professional means having half of your brain on the future and half on routing freight."
While there, attendees enjoyed three days of educational seminars, the annual Academic Research Symposium, site visits, networking receptions, and the Supply Chain Exchange exposition, which showcased supply chain technologies, equipment, and services.
Not able to attend the conference this year or unable to sample everything that was offered? This roundup will help you fill in some of the gaps. (More articles and videos from the conference can be found at www.supplychainquarterly.com.)
CSCMP presents 2019 awards for excellence
Every year at its annual conference CSCMP honors individuals and organizations that are helping to push the supply chain discipline to new heights. The following are some of the recognitions given out this year.
The 2019 Distinguished Service Award was presented to Kathy Wengel, executive vice president and chief global supply chain officer at healthcare company Johnson & Johnson.
The 2019 inductees into CSCMP's Supply Chain Hall of Fame were Wengel; James Casey, founder and former chairman of UPS; Elizabeth Dole, politician, author, and the first woman appointed U.S. Secretary of Transportation; Eliyahu Goldratt, author, philosopher, and business leader who developed a management paradigm called "the theory of constraints"; and George Raymond Sr., inventor of the wooden pallet and pallet jack.
Anahi Arzaof consumer goods company Unilever and Parker Holcomb of the freight brokerage company CoLanereceived the 2019 Emerging Leader Award for outstanding supply chain professionals age 35 and under.
Maximilian Merathof theUniversity of Mannheim, Germany,won the Doctoral Dissertation Award for his paper"Decision Making in Supply Risk and Supply Disruption Management."
The Bernard J. La Londe Best Paper Award was given to Matthew A. Schwieterman, Thomas J. Goldsby, and Keely L. Croxton for "Customer and Supplier Portfolios: Can Credit Risks be Managed Through Supply Chain Relationships?"
Alex Scott of Michigan State University, Andrew Balthrop of University of Arkansas, and Jason Miller of Michigan State Universityreceived the E. Grosvenor Plowman Award for their research paper, "Did the Electronic Logging Device Mandate Reduce Accidents?"
The 2019 Teaching Innovation Award was presented to Stephen Rutner of Texas Tech University, Rebecca Scott of the University of North Carolina-Wilmington, and JefferyHarper of Texas Tech University for their submission entitled: "Revisiting Promoting the Value of Supply Chain Management to Future Business Leader."
CSCMP session sampler
With three keynote presentations and over 100 educational sessions, CSCMP EDGE 2019 attendees had a wide variety of educational opportunities to choose from. Here are highlights of just a few that sparked interest at the conference.
Retrain your brain. The more successful you are, the harder it can be to innovate. The problem, according to innovation expert Jeremy Gutsche, is that "everyone wants to innovate, but most people don't want to break from the proven path." Gutsche, chief executive officer of Trend Hunter, used an arsenal of humorous stories and personal anecdotes during the opening keynote session to explore what holds companies back from innovating and what they can do to overcome these traps.
Part of the reason for the resistance to change is neurological, says Gutsche. That's because the more expertise and experience you have doing something, the more your brain becomes hardwired into thinking that's the only way to do it. It becomes harder to force yourself to break old habits and offer new products, services, or processes.
Large established companies are not, however, doomed to failure. "Innovation is not fluffy," Gutsche says. "It is a science. You can retrain your brain."
The importance of culture. They don't teach anthropology in supply chain programs, but maybe they should. When it comes to effectively operating a global supply chain with partners all of the world, the ability to understand and navigate different cultures can make or break you.
"Culture works hand in hand with trade," explained John Vogt, president of WWBC LLC, an independent consulting firm focused on strategy and global leadership. Vogt moderated a panel discussion where supply chain and operations executives provided tips and tricks for working with supply chain partners from different countries and navigating the inevitable cultural gaffe.
The biggest challenge, agreed the panelists, was effective communications. So much can be lost in translation through written communications and even in phone calls. Darrell Evans, senior vice president and chief supply chain officer for La-Z-Boy, recommends using video conferencing or physical visits for important issues so that body and facial language can be read.
10 steps to automate your warehouse. The path from a nonautomated warehouse to an automated one is not easy, fast, or cheap, says Wes Whalberg, director of supply chain engineering at Best Buy. Companies should consider the benefits, however, when asking the question "Why automate?" These can include labor savings, creating room for potential growth, and space and networking savings, he said. Whalberg detailed the 10-step program his company followed and the lessons learned from automating its distribution network. For companies considering the investment into their supply chain capabilities, consider following these steps:
Define "the burning platform"—What is the problem you are going to solve for the company?
Build a coalition—Recruit a broad set of executives who all share the same problem and are willing to help with the transformation.
Get outside help—Acquire funding for a consultant.
Look for a solution—The consultant will send out a request for proposal (RFP) to integrators. Select an integrator;
Acquire funding—Make sure to include facility readiness costs (such as power and physical changes to the building), IT investments, additional consulting support, and contingency plans into your funding request.
Document initial design and specifications—Make any needed changes to the original RFP and create the initial design.
Make final engineering changes—Lock down the layout of your system and submit building permit plans.
Begin construction—Make sure to consider how the general contractor and systems integrator will work together.
Go live—Expect to find unforeseen issues and software defects in your first initial runs.
Review how things are running—Give your company about a year to identify and take advantage of second-order benefits and mitigate second-order impacts.
New CSCMP board members begin their terms
CSCMP EDGE also marked the start of the 2019-2020 term for the association's board of directors. The following members officially took office at CSCMP's annual meeting, which was held during the conference:
Board of Directors Chair: Michelle Meyer, SCPro client executive of supply chain, at Gartner
Immediate Past Chair: Mark S. Baxa, president and chief executive officer, at FerniaCreek LLC
Board Chair-Elect: Brian Gibson, Wilson Family Professor of Supply Chain Management, Auburn University
Board Vice Chair: Lee Beard, senior director of global transportation, Nike
Secretary/Treasurer: Paul R. Brown, IBP business process owner, Americas, at Akzo Nobel N.V.
The CSCMP Board of Directors is responsible for voting on the mission, vision, and goals of CSCMP on an annual basis and helping the organization understand the needs and wants of its members.
Just 29% of supply chain organizations have the competitive characteristics they’ll need for future readiness, according to a Gartner survey released Tuesday. The survey focused on how organizations are preparing for future challenges and to keep their supply chains competitive.
Gartner surveyed 579 supply chain practitioners to determine the capabilities needed to manage the “future drivers of influence” on supply chains, which include artificial intelligence (AI) achievement and the ability to navigate new trade policies. According to the survey, the five competitive characteristics are: agility, resilience, regionalization, integrated ecosystems, and integrated enterprise strategy.
The survey analysis identified “leaders” among the respondents as supply chain organizations that have already developed at least three of the five competitive characteristics necessary to address the top five drivers of supply chain’s future.
Less than a third have met that threshold.
“Leaders shared a commitment to preparation through long-term, deliberate strategies, while non-leaders were more often focused on short-term priorities,” Pierfrancesco Manenti, vice president analyst in Gartner’s Supply Chain practice, said in a statement announcing the survey results.
“Most leaders have yet to invest in the most advanced technologies (e.g. real-time visibility, digital supply chain twin), but plan to do so in the next three-to-five years,” Manenti also said in the statement. “Leaders see technology as an enabler to their overall business strategies, while non-leaders more often invest in technology first, without having fully established their foundational capabilities.”
As part of the survey, respondents were asked to identify the future drivers of influence on supply chain performance over the next three to five years. The top five drivers are: achievement capability of AI (74%); the amount of new ESG regulations and trade policies being released (67%); geopolitical fight/transition for power (65%); control over data (62%); and talent scarcity (59%).
The analysis also identified four unique profiles of supply chain organizations, based on what their leaders deem as the most crucial capabilities for empowering their organizations over the next three to five years.
First, 54% of retailers are looking for ways to increase their financial recovery from returns. That’s because the cost to return a purchase averages 27% of the purchase price, which erases as much as 50% of the sales margin. But consumers have their own interests in mind: 76% of shoppers admit they’ve embellished or exaggerated the return reason to avoid a fee, a 39% increase from 2023 to 204.
Second, return experiences matter to consumers. A whopping 80% of shoppers stopped shopping at a retailer because of changes to the return policy—a 34% increase YoY.
Third, returns fraud and abuse is top-of-mind-for retailers, with wardrobing rising 38% in 2024. In fact, over two thirds (69%) of shoppers admit to wardrobing, which is the practice of buying an item for a specific reason or event and returning it after use. Shoppers also practice bracketing, or purchasing an item in a variety of colors or sizes and then returning all the unwanted options.
Fourth, returns come with a steep cost in terms of sustainability, with returns amounting to 8.4 billion pounds of landfill waste in 2023 alone.
“As returns have become an integral part of the shopper experience, retailers must balance meeting sky-high expectations with rising costs, environmental impact, and fraudulent behaviors,” Amena Ali, CEO of Optoro, said in the firm’s “2024 Returns Unwrapped” report. “By understanding shoppers’ behaviors and preferences around returns, retailers can create returns experiences that embrace their needs while driving deeper loyalty and protecting their bottom line.”
Facing an evolving supply chain landscape in 2025, companies are being forced to rethink their distribution strategies to cope with challenges like rising cost pressures, persistent labor shortages, and the complexities of managing SKU proliferation.
1. Optimize labor productivity and costs. Forward-thinking businesses are leveraging technology to get more done with fewer resources through approaches like slotting optimization, automation and robotics, and inventory visibility.
2. Maximize capacity with smart solutions. With e-commerce volumes rising, facilities need to handle more SKUs and orders without expanding their physical footprint. That can be achieved through high-density storage and dynamic throughput.
3. Streamline returns management. Returns are a growing challenge, thanks to the continued growth of e-commerce and the consumer practice of bracketing. Businesses can handle that with smarter reverse logistics processes like automated returns processing and reverse logistics visibility.
4. Accelerate order fulfillment with robotics. Robotic solutions are transforming the way orders are fulfilled, helping businesses meet customer expectations faster and more accurately than ever before by using autonomous mobile robots (AMRs and robotic picking.
5. Enhance end-of-line packaging. The final step in the supply chain is often the most visible to customers. So optimizing packaging processes can reduce costs, improve efficiency, and support sustainability goals through automated packaging systems and sustainability initiatives.
That clash has come as retailers have been hustling to adjust to pandemic swings like a renewed focus on e-commerce, then swiftly reimagining store experiences as foot traffic returned. But even as the dust settles from those changes, retailers are now facing renewed questions about how best to define their omnichannel strategy in a world where customers have increasing power and information.
The answer may come from a five-part strategy using integrated components to fortify omnichannel retail, EY said. The approach can unlock value and customer trust through great experiences, but only when implemented cohesively, not individually, EY warns.
The steps include:
1. Functional integration: Is your operating model and data infrastructure siloed between e-commerce and physical stores, or have you developed a cohesive unit centered around delivering seamless customer experience?
2. Customer insights: With consumer centricity at the heart of operations, are you analyzing all touch points to build a holistic view of preferences, behaviors, and buying patterns?
3. Next-generation inventory: Given the right customer insights, how are you utilizing advanced analytics to ensure inventory is optimized to meet demand precisely where and when it’s needed?
4. Distribution partnerships: Having ensured your customers find what they want where they want it, how are your distribution strategies adapting to deliver these choices to them swiftly and efficiently?
5. Real estate strategy: How is your real estate strategy interconnected with insights, inventory and distribution to enhance experience and maximize your footprint?
When approached cohesively, these efforts all build toward one overarching differentiator for retailers: a better customer experience that reaches from brand engagement and order placement through delivery and return, the EY study said. Amid continued volatility and an economy driven by complex customer demands, the retailers best set up to win are those that are striving to gain real-time visibility into stock levels, offer flexible fulfillment options and modernize merchandising through personalized and dynamic customer experiences.
Geopolitical rivalries, alliances, and aspirations are rewiring the global economy—and the imposition of new tariffs on foreign imports by the U.S. will accelerate that process, according to an analysis by Boston Consulting Group (BCG).
Without a broad increase in tariffs, world trade in goods will keep growing at an average of 2.9% annually for the next eight years, the firm forecasts in its report, “Great Powers, Geopolitics, and the Future of Trade.” But the routes goods travel will change markedly as North America reduces its dependence on China and China builds up its links with the Global South, which is cementing its power in the global trade map.
“Global trade is set to top $29 trillion by 2033, but the routes these goods will travel is changing at a remarkable pace,” Aparna Bharadwaj, managing director and partner at BCG, said in a release. “Trade lanes were already shifting from historical patterns and looming US tariffs will accelerate this. Navigating these new dynamics will be critical for any global business.”
To understand those changes, BCG modeled the direct impact of the 60/25/20 scenario (60% tariff on Chinese goods, a 25% on goods from Canada and Mexico, and a 20% on imports from all other countries). The results show that the tariffs would add $640 billion to the cost of importing goods from the top ten U.S. import nations, based on 2023 levels, unless alternative sources or suppliers are found.
In terms of product categories imported by the U.S., the greatest impact would be on imported auto parts and automotive vehicles, which would primarily affect trade with Mexico, the EU, and Japan. Consumer electronics, electrical machinery, and fashion goods would be most affected by higher tariffs on Chinese goods. Specifically, the report forecasts that a 60% tariff rate would add $61 billion to cost of importing consumer electronics products from China into the U.S.