A recurring theme in this column over the years has been the sometimes thankless nature of supply chain work. As we’ve noted time and again, the staggering amount of effort it takes to keep global commerce flowing goes largely unnoticed and unappreciated.
That’s not to say those of us who work in (and cover) this industry and profession do not recognize—and are not grateful for—all the work that goes into a well-oiled supply chain operation. We know there’s nothing simple about getting everything where it’s supposed to be, when it’s supposed to be there, damage free, and at the right price.
But this is not a career for people who need a lot of strokes. In supply chain, you don’t get many pats on the back, high fives, or accolades. The best indication that you’ve succeeded at your job on any given day is that your phone didn’t ring because all of your company’s stuff was where it was supposed to be when it was supposed to be there.
If supply chain is often taken for granted by the business community, it’s nearly invisible to the population at large. On the rare occasion when the public takes notice of supply chain, it’s usually because something has gone horribly awry: The hottest-selling toy of the holiday season is stuck on the docks in Long Beach, California. Or a fried-chicken chain is forced to shutter most of its outlets because of a poultry shortage.
To the general public, supply chain is almost like tap water. You turn on the faucet, the water comes out, you use what you need, and then you turn the faucet off. You don’t think about the plumbing in your house that routes the water to the faucet. You don’t think about the water lines running underground from the street to your home. You don’t think about the municipal water system that runs through your community. And you certainly don’t think about the wells that are fed by aquifers that are recharged by the hydraulic efforts of Mother Nature. No, you just think about filling your glass with water and turning off the tap.
And so it is with supply chain—a profession whose inner workings, and practitioners, might as well be invisible. That is, of course, until something goes wrong.
Well, something has indeed gone wrong, terribly wrong, in the world these past five months. At this writing, we remain in the grip of a pandemic that is wreaking havoc worldwide, threatening peoples’ lives and pushing the world to the brink of economic collapse. It is causing millions of people to isolate themselves from their fellow human beings.
And, of course, it is testing companies’ global supply chains in ways heretofore unimaginable.
This has put logistics and supply chain on the public’s collective radar. Suddenly, everyone is talking supply chain—whether it’s politicians, government officials, or the talking heads who populate mainstream news outlets.
But this time, it is different. Supply chain isn’t in the news because of a disruption that’s creating a shortage of iPads a week before Christmas. It’s not in the news because a labor strike is keeping ships from offloading at the nation’s busiest ports.
No, this time, supply chain is in the news because it is saving the day. At a time when the delivery of critical supplies has become a life or death matter, supply chain professionals are finally being recognized for the work they do. The good work. The critical work. The life-saving work.
It is not for a reason anyone would have wished for. Nonetheless, the novel coronavirus has shined a light on the importance of supply chain not only to business but also to the lives of every single human on this orbiting rock.
Confronted with the closed ports, most companies can either route their imports to standard East Coast destinations and wait for the strike to clear, or else re-route those containers to West Coast sites, incurring a three week delay for extra sailing time plus another week required to truck those goods back east, Ron said in an interview at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
However, Uber Freight says its latest platform updates offer a series of mitigation options, including alternative routings, pre-booked allocation and volume during peak season, and providing daily visibility reports on shipments impacted by routings via U.S. east and gulf coast ports. And Ron said the company can also leverage its pool of some 2.3 million truck drivers who have downloaded its smartphone app, targeting them with freight hauling opportunities in the affected regions by pricing those loads “appropriately” through its surge-pricing model.
“If this [strike] continues a month, we will see severe disruptions,” Ron said. “So we can offer them alternatives. We say, if one door is closed, we can open another door? But even with that, there are no magic solutions.”
Turning around a failing warehouse operation demands a similar methodology to how emergency room doctors triage troubled patients at the hospital, a speaker said today in a session at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.
There are many reasons that a warehouse might start to miss its targets, such as a sudden volume increase or a new IT system implementation gone wrong, said Adri McCaskill, general manager for iPlan’s Warehouse Management business unit. But whatever the cause, the basic rescue strategy is the same: “Just like medicine, you do triage,” she said. “The most life-threatening problem we try to solve first. And only then, once we’ve stopped the bleeding, we can move on.”
In McCaskill’s comparison, just as a doctor might have to break some ribs through energetic CPR to get a patient’s heart beating again, a failing warehouse might need to recover by “breaking some ribs” in a business sense, such as making management changes or stock write-downs.
Once the business has made some stopgap solutions to “stop the bleeding,” it can proceed to a disciplined recovery, she said. And to reach their final goal, managers can use the classic tools of people, process, and technology to improve what she called the three most important key performance indicators (KPIs): on time in full (OTIF), inventory accuracy, and staff turnover.
CSCMP EDGE attendees gathered Tuesday afternoon for an update and outlook on the truckload (TL) market, which is on the upswing following the longest down cycle in recorded history. Kevin Adamik of RXO (formerly Coyote Logistics), offered an overview of truckload market cycles, highlighting major trends from the recent freight recession and providing an update on where the TL cycle is now.
EDGE 2024, sponsored by the Council of Supply Chain Management Professionals (CSCMP), is taking place this week in Nashville.
Citing data from the Coyote Curve index (which measures year-over-year changes in spot market rates) and other sources, Adamik outlined the dynamics of the TL market. He explained that the last cycle—which lasted from about 2019 to 2024—was longer than the typical three to four-year market cycle, marked by volatile conditions spurred by the Covid-19 pandemic. That cycle is behind us now, he said, adding that the market has reached equilibrium and is headed toward an inflationary environment.
Adamik also told attendees that he expects the new TL cycle to be marked by far less volatility, with a return to more typical conditions. And he offered a slate of supply and demand trends to note as the industry moves into the new cycle.
Supply trends include:
Carrier operating authorities are declining;
Employment in the trucking industry is declining;
Private fleets have expanded, but the expansion has stopped;
Truckload orders are falling.
Demand trends include:
Consumer spending is stable, but is still more service-centric and less goods-intensive;
After a steep decline, imports are on the rise;
Freight volumes have been sluggish but are showing signs of life.
CSCMP EDGE runs through Wednesday, October 2, at Nashville’s Gaylord Opryland Hotel & Resort.
The relationship between shippers and third-party logistics services providers (3PLs) is at the core of successful supply chain management—so getting that relationship right is vital. A panel of industry experts from both sides of the aisle weighed in on what it takes to create strong 3PL/shipper partnerships on day two of the CSCMP EDGE conference, being held this week in Nashville.
Trust, empathy, and transparency ranked high on the list of key elements required for success in all aspects of the partnership, but there are some specifics for each step of the journey. The panel recommended a handful of actions that should take place early on, including:
Establish relationships.
For 3PLs, understand and get to the heart of the shipper’s data.
Also for 3PLs: Understand the shipper’s reason for outsourcing to a 3PL, along with the shipper’s ultimate goals.
Understand company cultures and be sure they align.
Nurture long-term relationships with good communication.
For shippers, be transparent so that the 3PL fully understands your business.
And there are also some “non-negotiables” when it comes to managing the relationship:
3PLs must demonstrate their commitment to engaging with the shipper’s personnel.
3PLs must also demonstrate their commitment to process discipline, continuous improvement, and innovation.
Shippers should ensure that they understand the 3PL’s demonstrated implementation capabilities—ask to visit established clients.
Trust—which takes longer to establish than both sides may expect.
EDGE 2024 is sponsored by the Council of Supply Chain Management Professionals (CSCMP) and runs through Wednesday, October 2, at the Gaylord Opryland Resort & Convention Center in Nashville.
While the Council of Supply Chain Management Professionals' 2024 EDGE Conference & Exhibition is coming to a close on Wednesday, October 2, in Nashville, Tennessee, mark your calendars for next year's premier supply chain event.
The 2025 conference will take place in National Harbor, Maryland. To register for next year's event—and take advantage of an early-bird discount of $600**—visit https://www.cscmpedge.org/website/62261/edge-2025/.
**EDGE EARLY BIRD Terms & Conditions: Promotion is for the EDGE 2025 conference in National Harbor, Maryland. Offer valid for Premier and Basic Members only. Offer excludes Student, Young Professional, Educator, and Corporate registration types. Offer limited to one per customer. Offer is not retroactive and may not be combined with other offers. Offer is nontransferable and may not be resold. Valid through October 31, 2024.