Logistics and supply chain management have come a long way from the old green eyeshade days. In this excerpt from Episode 8 of the "Supply Chain Pioneers" video series, Kenneth Ackerman, Donald "Dee" Biggs, John Bowersox, Mark Richards, and Thomas Speh discuss what the profession looks like today.
To get an idea of the evolution the logistics and supply chain profession has undergone over the 50 years since the Council of Supply Chain Management Professionals was founded, all you have to do is look at how the group's name has changed through the decades. What we now call CSCMP began in 1963 as the National Council of Physical Distribution Management (NCPDM) and became the Council of Logistics Management (CLM) in 1985, before adopting its current moniker in 1995. Each of those names reflected the changing nature of the profession and its practitioners' responsibilities.
Where does the profession stand today? In this excerpt from the video series "Supply Chain Pioneers," five leading logistics professionals at different stages of their careers address that topic based on their experience.
Kenneth Ackerman, president of the consulting firm K.B. Ackerman Company, is a past president of CSCMP and the 1977 recipient of the group's Distinguished Service Award. He attended his first NCPDM annual conference in 1969.
Donald "Dee" Biggs is director of customer logistics at Welch Foods and has been a member of CSCMP since 1975. He served as chairman of the 2010 Annual Global Conference and on CSCMP's board of directors.
John Bowersox is responsible for business-to-business customer service for the Kohler Company. He currently sits on CSCMP's board of directors as its Young Professionals Committee chair. His father, the late Dr. Donald Bowersox, was a founder of NCPDM and the recipient of the very first Distinguished Service Award, in 1966.
Mark Richards is vice president of Associated Warehouses, Inc. He has been actively involved with CSCMP since he began his career some 34 years ago, and served as chair of the board of directors from 2006 to 2007.
Thomas Speh is director of e-Learning at the Farmer School of Business at Miami University. He previously was a professor of distribution and senior director of MBA programs at the school. A member of CSCMP since 1973, he has served as board chair and president, and received the Distinguished Service Award in 2007.
The following is an excerpt of that conversation, which was led by CSCMP President and CEO Rick Blasgen.
Who were the founding members of CSCMP?
The following individuals got together in January of 1963 in St. Louis, Missouri, to form the National Council of Physical Distribution Management (NCPDM), the forerunner of CSCMP:
William T. Beckman, traffic manager, Monsanto (NCPDM's first president)
F. Harry Bergtholdt, vice president of distribution, Del Monte
Warren Blanding, editor, Transportation & Distribution Management magazine
Donald J. Bowersox, vice president and general manager, E. F. MacDonald Stamp Company
Will Gribble, director of customer service, The Pillsbury Company
H. George Miller, director of distribution, Diamond Crystal Salt Company
E. Grosvenor Plowman, vice president, traffic, U.S. Steel
Andrew C. Price, director of distribution, Xerox
Bruce J. Riggs, general traffic manager, Behr Manning Division of the Norton Company
Charles C. Smith, traffic manager, Nabisco
George C. Smith, director of transportation, DuPont Fabrics & Finishes Division
Edward W. Smykay, professor of physical distribution management, Michigan State University
Wendell M. Stewart, vice president, A. T. Kearney Consulting
John F. Varley, vice president of distribution, Johnson & Johnson
John, you are one of the younger generation. How do you view the state of the profession at Kohler, and then fast-forward 10 years. If we are successful in doing what we set out to do, what will the state of the profession look like then? Bowersox: I think the profession right now is alive and well. We have seen a big transformation over the last 10 years around the acknowledgement of supply chain as a profession, and I believe that has presented us with a great opportunity but also with a number of challenges around how we interact with businesses in a global community.
In terms of the next 10 years, I think that the fundamentals and the framework of our industry will stay the same, but the speed at which things change—the speed at which we have to make decisions for our businesses and the pace of change—will continue to grow and be a challenge for us.
Dee, you have had a long, fruitful career in the food industry with Welch's, but you also participated in industry initiatives over the years. What is your perception of the current state of the supply chain world? Biggs: Well, I think supply chain is probably doing better than it ever has. I think all you have to do is watch TV; now we have songs about logistics! Big Brown [UPS] has got "I love logistics" all over the place. The fact that we've got people around the world talking about logistics, talking about supply chain, it's never been better. At the same time, I think the challenges are still as great as they were 50 years ago. I mean, we are still really at the beginning point of doing lots of things.
Tom, you have spent a career in academia and have mentored students who became leaders in this field. What is your view, from an academic perspective, of the profession? Speh: Well, it is exciting, because what we are seeing now is students who are so passionate about this area. I look at the crop of students that we have, the quality of these students, and the fact that half of our students in supply chain are double majors in engineering and other areas. So we are getting a terrific group of students who are coming through the pipeline. They are energized. They are qualified, and they bring, I think, a wider array of skills to the profession than we have probably seen in the past.
John, you are recruiting all the time, looking for folks to bring into Kohler. Do you see that as well? Bowersox: Yes, I would agree. I think that we are seeing a shift in our work force in terms of the need to bring in new students who have that supply chain background and understanding and can come to the table immediately, hit the ground running, and be able to make business decisions with that baseline.
You know, Mark, back in 1994 I was on a panel where part of the discussion was about how in the year 2000, we would no longer need warehouses because everything will be information-driven and we'll be able to create a product right in front of you. That didn't happen, and warehouses still perform an important function today. Richards: I am happy to say that the space continues to grow. There is going to continue to be a need for warehousing. And fortunately, 3PLs (third-party logistics service providers) have learned to be very creative in the things that they do within those four walls.
The chief logistics officer or the chief supply chain officer has to be a great salesperson inside the company. Tom, do you think we could do a better job of explaining the value that we bring to those we serve? Speh: I think we are going to see naturally some improvement in that. Almost every business school has a required course in supply chain management, so now we are getting people who may get a finance degree or a marketing degree. They come out of a business program with at least one, if not two, courses in supply chain management, which has taught them about the value that is being delivered, and about the need for integration and collaboration.
John, you have some transformational issues going on at Kohler right now in the area of supply chain. Did someone just wake up one morning and say, "Hey, I get it now?" How did that come about? Bowersox: I think it has happened in a number of different ways. For Kohler, to be candid, part of it has been the global recession of the past couple of years. It has put a greater focus on the need for our supply chain and for us as a company to be agile and flexible. As we get the opportunity to come to the table on these discussions, it is our job to present solutions and ideas—not to just present the framework and help [management] to understand the trade-offs, but to come with a value-added proposition around how the supply chain can be used to better leverage a sales initiative or marketing campaign, or whatever it may be.
Dee, how do we get those who don't understand logistics and supply chain to understand what we do and the value that we bring? Biggs: When I came to Welch's in the early '80s and started to put together a supply chain [organization], you would go out and start talking about the value to finance and the value to marketing. They would kind of look at you like, what [in the world] are you talking about? Over time we kept talking. It is an evolutionary process. I think more companies have a chief logistics officer or a chief supply chain officer than ever before. Fifteen or 20 years ago in the grocery industry it was pretty rare. Now it is very common.
Any closing comments on the current state of the profession and your thoughts about what we might do to accelerate its prominence? Speh: Well, I think unquestionably it is a great time to be in the profession. ... I really think we owe it to the profession to try to get out there and spread the word to younger children before they ever get to college.
Ackerman: I am amazed at the enthusiasm of my grandchildren's generation. Some of our oldest friends have a granddaughter who went to school at Miami University. They called me up and said their granddaughter wants to get into supply chain. This kid is working for a trucking company in Chicago. I have never met this youngster, but I gather she is intense, she is enthusiastic, and it is fun to see kids in their twenties with that enthusiasm.
Richards: I believe also that it is a great time to be in the business and the profession. Historically we have been a very humble profession. We have sat in the back and we have saved money. I think we need to step it up. If we go to the high schools and we talk about the fact that if you are in this profession, there is a good chance that you are going to get a job, especially these days, that is going to get some people to perk up and take notice.
Bowersox: I will say again that I truly believe the supply chain is a fabulous place to be right now, and it will continue to be for some time. The challenge is, how do we continue specifically with a younger generation? How do we truly help them understand what the supply chain is? People know what a doctor does. They don't necessarily know what a role in logistics or warehouse operations might be. So I think as an organization and as a community we've got to continue to help educate the general public on what it means.
“ExxonMobil is uniquely placed to understand the biggest opportunities in improving energy supply chains, from more accurate sales and operations planning, increased agility in field operations, effective management of enormous transportation networks and adapting quickly to complex regulatory environments,” John Sicard, Kinaxis CEO, said in a release.
Specifically, Kinaxis and ExxonMobil said they will focus on a supply and demand planning solution for the complicated fuel commodities market which has no industry-wide standard and which relies heavily on spreadsheets and other manual methods. The solution will enable integrated refinery-to-customer planning with timely data for the most accurate supply/demand planning, balancing and signaling.
The benefits of that approach could include automated data visibility, improved inventory management and terminal replenishment, and enhanced supply scenario planning that are expected to enable arbitrage opportunities and decrease supply costs.
And in the chemicals and lubricants space, the companies are developing an advanced planning solution that provides manufacturing and logistics constraints management coupled with scenario modeling and evaluation.
“Last year, we brought together all ExxonMobil supply chain activities and expertise into one centralized organization, creating one of the largest supply chain operations in the world, and through this identified critical solution gaps to enable our businesses to capture additional value,” said Staale Gjervik, supply chain president, ExxonMobil Global Services Company. “Collaborating with Kinaxis, a leading supply chain technology provider, is instrumental in providing solutions for a large and complex business like ours.”
For example, millions of residents and workers in the Tampa region have now left their homes and jobs, heeding increasingly dire evacuation warnings from state officials. They’re fleeing the estimated 10 to 20 feet of storm surge that is forecast to swamp the area, due to Hurricane Milton’s status as the strongest hurricane in the Gulf since Rita in 2005, the fifth-strongest Atlantic hurricane based on pressure, and the sixth-strongest Atlantic hurricane based on its peak winds, according to market data provider Industrial Info Resources.
Between that mass migration and the storm’s effect on buildings and infrastructure, supply chain impacts could hit the energy logistics and agriculture sectors particularly hard, according to a report from Everstream Analytics.
The Tampa Bay metro area is the most vulnerable area, with the potential for storm surge to halt port operations, roads, rails, air travel, and business operations – possibly for an extended period of time. In contrast to those “severe to potentially catastrophic” effects, key supply chain hubs outside of the core zone of impact—including the Miami metro area along with Jacksonville, FL and Savannah, GA—could also be impacted but to a more moderate level, such as slowdowns in port operations and air cargo, Everstream Analytics’ Chief Meteorologist Jon Davis said in a report.
Although it was recently downgraded from a Category 5 to Category 4 storm, Milton is anticipated to have major disruptions for transportation, in large part because it will strike an “already fragile supply chain environment” that is still reeling from the fury of Hurricane Helene less than two weeks ago and the ILA port strike that ended just five days ago and crippled ports along the East and Gulf Coasts, a report from Project44 said.
The storm will also affect supply chain operations at sea, since approximately 74 container vessels are located near the storm and may experience delays as they await safe entry into major ports. Vessels already at the ports may face delays departing as they wait for storm conditions to clear, Project44 said.
On land, Florida will likely also face impacts in the Last Mile delivery industry as roads become difficult to navigate and workers evacuate for safety.
Likewise, freight rail networks are also shifting engines, cars, and shipments out of the path of the storm as the industry continues “adapting to a world shaped by climate change,” the Association of American Railroads (AAR) said. Before floods arrive, railroads may relocate locomotives, elevate track infrastructure, and remove sensitive electronic equipment such as sensors, signals and switches. However, forceful water can move a bridge from its support beams or destabilize it by unearthing the supporting soil, so in certain conditions, railroads may park rail cars full of heavy materials — like rocks and ballast — on a bridge before a flood to weigh it down, AAR said.
The North American robotics market saw a decline in both units ordered (down 7.9% to 15,705 units) and revenue (down 6.8% to $982.83 million) during the first half of 2024 compared to the same period in 2023, as North American manufacturers faced ongoing economic headwinds, according to a report from the Association for Advancing Automation (A3).
“Rising inflation and borrowing costs have dampened spending on robotics, with many companies opting to delay major investments,” said Jeff Burnstein, president, A3. “Despite these challenges, the push for operational efficiency and workforce augmentation continues to drive demand for robotics in industries such as food and consumer goods and life sciences, among others. As companies navigate labor shortages and increased production costs, the role of automation is becoming ever more critical in maintaining global competitiveness.”
The downward trend was led by weakness in automotive manufacturing, which traditionally leads the charge in buying robots. In the first half of 2024, automotive OEMs ordered 4,159 units (up 14.4%) but generated revenue of $259.96 million (down 12.0%). The Automotive Components sector was even worse, orders 3,574 units (down 38.8%) for $191.93 million in revenue (down 27.3%). Declines also happened in the Semiconductor & Electronics/Photonics sector and the Plastics & Rubber sector.
On the positive side, Food & Consumer Goods companies ordered 1,173 units (up 85.6%) for $62.84 million in revenue (up 56.2%). This growth reflects the increasing reliance on robotics for efficiency in food processing and packaging as companies seek to address labor shortages and rising costs, A3 said. And the Life Sciences industry ordered 1,007 units (up 47.9%) for revenue of $47.29 million (up 86.7%) as it continued its reliance on robotics for efficiency and precision.
The warm waters of the Gulf of Mexico are brewing up another massive storm this week that is on track to smash into the western coast of Florida by Wednesday morning, bringing a consecutive round of storm surge and damaging winds to the storm-weary state.
Before reaching the U.S., Hurricane Milton will rake the northern coast of Mexico’s Yucatan Peninsula with dangerous weather. But hurricane watches are already in effect for parts of Florida, which could see heavy rainfall, flash and urban flooding, and moderate to major river floods, according to forecasts from the National Oceanic and Atmospheric Administration (NOAA).
As it revs its massive engines with fuel from the historically warm Gulf of Mexico, Hurricane Milton could possibly hit Tampa as a Category 5 storm, according to the FEWSION Project at Northern Arizona University, which tracks supply chains throughout the country.
With that much power, Milton could shut down the port and seriously disrupt the fuel supply into western and central Florida, which could then hinder recovery efforts. That’s because fuel supplies for much of Florida, especially central Florida, arrive from Texas and Louisiana through the Port of Tampa. That means that anyone who depends on generators or fuel for critical functions should plan for an extended period without access to fuel. And recovery crews and logisticians should consider bringing their own fuel when responding to the storm, FEWSION said.
One of those disaster recovery efforts will be led by nonprofit group the American Logistics Aid Network (ALAN), which is already mobilizing its forces for Hurricane Milton, even as it devotes other energy to the Hurricane Helene response. “In an ideal world we’d have plenty of time to focus all of our efforts on Hurricane Helene clean-up and recovery,” Kathy Fulton, ALAN’s Executive Director, said in a release. “But in the real world, major hurricanes don’t always wait for their turn. As a result, we are officially activating for Hurricane Milton.”
In the meantime, many weary residents of the region are thinking of moving to another part of the country instead of getting hit by vicious storms several times a year. Nearly one-third (32%) of U.S. residents aged 18-34 say they’re reconsidering where they want to move in the future after seeing or hearing about the damage caused by Hurricane Helene, according to a survey commissioned by real estate brokerage Redfin.
“Scores of Americans flocked to the Sun Belt during the pandemic because remote work allowed them to take advantage of the region’s relatively low cost of living. Some thought Appalachia was insulated from hurricane risk, not realizing that the area is prone to flooding and that hurricanes can sometimes cause flash flooding far away from the ocean,” Redfin Chief Economist Daryl Fairweather said in a release. “Americans are beginning to realize that nowhere is truly immune to the impacts of climate change, and we’re starting to see that impact where people want to live—even people who haven’t experienced a catastrophic weather event firsthand.”
The report is based on a commissioned survey conducted by Ipsos on Oct. 2-3, fielded to 1,005 U.S. adults. After making landfall in Florida in late September, Hurricane Helene wreaked havoc across Appalachia, becoming the deadliest storm to hit mainland America in almost two decades. In North Carolina, the death toll has surpassed 100 and the city of Asheville has been devastated.
Shippers and carriers at ports along the East and Gulf coasts today are working through a backlog of stranded containers stuck on ships at sea, now that dockworkers and port operators have agreed to a tentative deal that ends the dockworkers strike.
In the meantime, U.S. importers and exporters face a mountain of shipping boxes that are now several days behind schedule. By the latest estimate from Everstream Analytics, the number of cargo boxes on ships floating outside affected ports has slightly decreased by 20,000 twenty foot equivalent units (TEUs), dropping to 386,000 from its highpoint of 406,000 yesterday.
To chip away at the problem, some facilities like the Port of Charleston have announced extended daily gate hours to give shippers and carriers more time each day to shuffle through the backlog. And Georgia Ports Authority likewise announced plans to stay open on Saturday and Sunday, saying, “We will be offering weekend gates to help restore your supply chain fluidity.”
But they face a lot of work; the number of container ships waiting outside of U.S. Gulf and East Coast ports on Friday morning had decreased overnight to 54, down from a Thursday peak of 59. Overall, with each day of strike roughly needing about one week to clear the backlog, the 3-day all-out strike will likely take minimum three weeks to return to normal operations at U.S. ports, Everstream said.