In the supply chain field, we have many challenges on the talent front. Most of what we are collectively doing is devoted to being more attractive to a limited talent pool than our competitors are. But the real key to success in the talent arena is to expand the talent pool itself.
To listen to some academics, nothing matters but the bright young people earning university degrees. Degreed professionals are important, but we also need many thousands more nondegreed workers. We have to recognize that 75 percent (give or take) of supply chain jobs do not require a four-year degree from a university—but that doesn't mean all of those jobs are limited to toiling in a dank, dark warehouse, either. Our problem is that we are failing to create an ongoing stream of qualified and motivated people to fill those nondegreed jobs: people who enter the field on purpose rather than by accident or as a last resort. Sadly, the many programs directed at training forklift drivers and order pickers present a limited, and borderline negative, view of the rich and intricate tapestry of opportunities the supply chain profession provides.
Here in Ohio, we are developing a program that is designed to inform and to attract high school audiences to consider supply chain careers—whether they are interested in Ohio State University, a community college, a vocational education program, or a little training/certification so that they can go to work—and to ensure there will be jobs for them to go to. Our vision is to acquaint young people with the possibilities offered by the profession and divert them into appropriate developmental channels, early enough that they can enter the field educated, trained, and ready to be productive.
We think this will deliver competitive advantage. It will also continue to fill the talent pipeline so that we are not constantly fighting the talent shortage battle. It will give more people decent jobs at decent wages, often in communities in which there are not many traditional opportunities.
Art van Bodegraven
Managing principal
Van Bodegraven Associates
Powell, Ohio, USA
Open students' eyes to SCM as a profession
Recently I taught a seminar for the Executive Master of Business Administration (MBA) program at California State University's Fresno-Craig School of Business. The purpose of this one-day workshop was to introduce the discipline of supply chain management to the MBA students in a way that integrates traditional business topics such as finance, accounting, management, and manufacturing into an enterprisewide, systemwide view. My curriculum was based on the eight SCPro building blocks (created by CSCMP) and the Guiding Principles of the Lean Fulfillment Stream (from LeanCor).
The feedback from the students was overwhelmingly positive, and it inspired me to write to you. We have been talking about the talent crisis in supply chain and logistics; meanwhile, the discipline is not taught at enough universities. In fact, some schools have even cut their logistics programs due to low student enrollments. Why? The natural conclusion would be that students and young professionals don't find the field interesting or promising as a career. After my experience teaching, I respectfully disagree and believe the problem to be the low level of marketing we do for supply chain and logistics. After I taught my students about the amazing diversity of our profession, the opportunities for supply chain professionals to be seen as "Most Valued Player" at their companies, and the success stories of Amazon, Walmart, Macy's, and others, I saw their eyes lighting up one by one. The students' feedback speaks for itself:
"I have learned most of what I now know about supply chain management through this brief, yet very informative course. Before this class, I thought of SCM as only having to do with transportation. I have learned that I have a lot to learn, and a good reason to learn it. Thank you for the enlightening class."
"Thank you for the awesome class last week, it was a really interesting topic that has not been covered enough in our MBA program or undergraduate courses. During this program I have become increasingly interested in operations and SCM. I would like to find direction in my career to take the necessary steps into the field."
So where are the future generations of supply chain professionals hiding, you ask? At every business school around the world! All we need to do is teach them the secrets of our profession with enthusiasm, and our talent crisis will be a tale of the past.
Susanna Sterling-Bodnar
Director, Supply Chain Solutions
LeanCor Supply Chain Group
Florence, Kentucky, USA
CSCMP's annual conference inspired new ideas
Last year, when a friend invited me to join CSCMP and attend the Annual Global Conference in Denver, I decided to go and experience more of what my friend promised was a great organization.
I can tell you that it was even better than promised. So full of passionate, great leaders and members! I could see the energy flowing out of the people gathered together to network and learn about the supply chain.
The learning was great, the networking could not have been better, and the general sessions opened my mind to an explosion of ideas. I came home full of energy and ideas, and charged with innovation and enthusiasm.
As a Mexican national, hearing Felipe Calderón speak about the great future opportunities for Mexico was pretty relevant to me. (A big thanks to the team who took me backstage for a photo with him, that was awesome!) The story of Tesla Motors was so inspirational. I was already intrigued by their story and what I think is their potential to make history, but hearing about the struggles, challenges, and opportunities they have faced really put a human face on this great supply chain and innovation story.
The biggest impact for me came from Mike Rayburn's keynote presentation about innovation. The company I work for is big in innovation. I can tell you that all the innovation training, reading material, and videos I have seen over the last couple of years came to life when I heard Rayburn deliver his innovation message.
Coincidentally, during a networking lunch the Monday prior to Rayburn's talk, I was talking to a student about innovation. I remember saying, "I wish I was innovative, but I'm not." After hearing Rayburn, the innovation message really hit home. I could not sleep for a few nights after the conference because so many ideas kept coming into my head, and I had to get up and write them down.
I was wrong. I am innovative, we are all innovative—we simply need to give ourselves permission to be that way.
Today, I'm working on three innovation-related projects! I have presented one supply chain-related innovation idea to my company. Additionally, my friend who invited me to join CSCMP, some other supply chain professionals, and I together have created a roundtable for Peoria, Illinois, USA. All of these things happened because I gave myself permission to check out what CSCMP was all about. Needless to say, it was the best education investment I have made so far.
Keep up the great work, CSCMP team, and see you in San Antonio!
Javier R. Zarazua
Undercarriage Black Belt—Strategic Sourcing
Caterpillar Inc.
Peoria, Illinois, USA
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.
The practice consists of 5,000 professionals from Accenture and from Avanade—the consulting firm’s joint venture with Microsoft. They will be supported by Microsoft product specialists who will work closely with the Accenture Center for Advanced AI. Together, that group will collaborate on AI and Copilot agent templates, extensions, plugins, and connectors to help organizations leverage their data and gen AI to reduce costs, improve efficiencies and drive growth, they said on Thursday.
Accenture and Avanade say they have already developed some AI tools for these applications. For example, a supplier discovery and risk agent can deliver real-time market insights, agile supply chain responses, and better vendor selection, which could result in up to 15% cost savings. And a procure-to-pay agent could improve efficiency by up to 40% and enhance vendor relations and satisfaction by addressing urgent payment requirements and avoiding disruptions of key services
Likewise, they have also built solutions for clients using Microsoft 365 Copilot technology. For example, they have created Copilots for a variety of industries and functions including finance, manufacturing, supply chain, retail, and consumer goods and healthcare.
Another part of the new practice will be educating clients how to use the technology, using an “Azure Generative AI Engineer Nanodegree program” to teach users how to design, build, and operationalize AI-driven applications on Azure, Microsoft’s cloud computing platform. The online classes will teach learners how to use AI models to solve real-world problems through automation, data insights, and generative AI solutions, the firms said.
“We are pleased to deepen our collaboration with Accenture to help our mutual customers develop AI-first business processes responsibly and securely, while helping them drive market differentiation,” Judson Althoff, executive vice president and chief commercial officer at Microsoft, said in a release. “By bringing together Copilots and human ambition, paired with the autonomous capabilities of an agent, we can accelerate AI transformation for organizations across industries and help them realize successful business outcomes through pragmatic innovation.”
Census data showed that overall retail sales in October were up 0.4% seasonally adjusted month over month and up 2.8% unadjusted year over year. That compared with increases of 0.8% month over month and 2% year over year in September.
October’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were unchanged seasonally adjusted month over month but up 5.4% unadjusted year over year.
Core sales were up 3.5% year over year for the first 10 months of the year, in line with NRF’s forecast for 2024 retail sales to grow between 2.5% and 3.5% over 2023. NRF is forecasting that 2024 holiday sales during November and December will also increase between 2.5% and 3.5% over the same time last year.
“October’s pickup in retail sales shows a healthy pace of spending as many consumers got an early start on holiday shopping,” NRF Chief Economist Jack Kleinhenz said in a release. “October sales were a good early step forward into the holiday shopping season, which is now fully underway. Falling energy prices have likely provided extra dollars for household spending on retail merchandise.”
Despite that positive trend, market watchers cautioned that retailers still need to offer competitive value propositions and customer experience in order to succeed in the holiday season. “The American consumer has been more resilient than anyone could have expected. But that isn’t a free pass for retailers to under invest in their stores,” Nikki Baird, VP of strategy & product at Aptos, a solutions provider of unified retail technology based out of Alpharetta, Georgia, said in a statement. “They need to make investments in labor, customer experience tech, and digital transformation. It has been too easy to kick the can down the road until you suddenly realize there’s no road left.”
A similar message came from Chip West, a retail and consumer behavior expert at the marketing, packaging, print and supply chain solutions provider RRD. “October’s increase proved to be slightly better than projections and was likely boosted by lower fuel prices. As inflation slowed for a number of months, prices in several categories have stabilized, with some even showing declines, offering further relief to consumers,” West said. “The data also looks to be a positive sign as we kick off the holiday shopping season. Promotions and discounts will play a prominent role in holiday shopping behavior as they are key influencers in consumer’s purchasing decisions.”
Third-party logistics (3PL) providers’ share of large real estate leases across the U.S. rose significantly through the third quarter of 2024 compared to the same time last year, as more retailers and wholesalers have been outsourcing their warehouse and distribution operations to 3PLs, according to a report from real estate firm CBRE.
Specifically, 3PLs’ share of bulk industrial leasing activity—covering leases of 100,000 square feet or more—rose to 34.1% through Q3 of this year from 30.6% through Q3 last year. By raw numbers, 3PLs have accounted for 498 bulk leases so far this year, up by 9% from the 457 at this time last year.
By category, 3PLs’ share of 34.1% ranked above other occupier types such as: general retail and wholesale (26.6), food and beverage (9.0), automobiles, tires, and parts (7.9), manufacturing (6.2), building materials and construction (5.6), e-commerce only (5.6), medical (2.7), and undisclosed (2.3).
On a quarterly basis, bulk leasing by 3PLs has steadily increased this year, reversing the steadily decreasing trend of 2023. CBRE pointed to three main reasons for that resurgence:
Import Flexibility. Labor disruptions, extreme weather patterns, and geopolitical uncertainty have led many companies to diversify their import locations. Using 3PLs allows for more inventory flexibility, a key component to retailer success in times of uncertainty.
Capital Allocation/Preservation. Warehousing and distribution of goods is expensive, draining capital resources for transportation costs, rent, or labor. But outsourcing to 3PLs provides companies with more flexibility to increase or decrease their inventories without any risk of signing their own lease commitments. And using a 3PL also allows companies to switch supply chain costs from capital to operational expenses.
Focus on Core Competency. Outsourcing their logistics operations to 3PLs allows companies to focus on core business competencies that drive revenue, such as product development, sales, and customer service.
Looking into the future, these same trends will continue to drive 3PL warehouse demand, CBRE said. Economic, geopolitical and supply chain uncertainty will remain prevalent in the coming quarters but will not diminish the need to effectively manage inventory levels.
That result came from the company’s “GEP Global Supply Chain Volatility Index,” an indicator tracking demand conditions, shortages, transportation costs, inventories, and backlogs based on a monthly survey of 27,000 businesses. The October index number was -0.39, which was up only slightly from its level of -0.43 in September.
Researchers found a steep rise in slack across North American supply chains due to declining factory activity in the U.S. In fact, purchasing managers at U.S. manufacturers made their strongest cutbacks to buying volumes in nearly a year and a half, indicating that factories in the world's largest economy are preparing for lower production volumes, GEP said.
Elsewhere, suppliers feeding Asia also reported spare capacity in October, albeit to a lesser degree than seen in Western markets. Europe's industrial plight remained a key feature of the data in October, as vendor capacity was significantly underutilized, reflecting a continuation of subdued demand in key manufacturing hubs across the continent.
"We're in a buyers' market. October is the fourth straight month that suppliers worldwide reported spare capacity, with notable contractions in factory demand across North America and Europe, underscoring the challenging outlook for Western manufacturers," Todd Bremer, vice president, GEP, said in a release. "President-elect Trump inherits U.S. manufacturers with plenty of spare capacity while in contrast, China's modest rebound and strong expansion in India demonstrate greater resilience in Asia."