For What It's Worth: My Take on Last Week's Supply Chain & Logistics News (May 21, 2018)

Every Friday on Talking Logistics, I share a list of supply chain and logistics news that caught my attention that week, along with some brief commentary and analysis. For what it’s worth, here’s my take on some of the news that made the headlines last week.

Target Redesigning Distribution Network for Speed

Earlier this year, the Wall Street Journal reported that P&G is undertaking “a multibillion-dollar effort to remake an antiquated and inefficient network of factories, warehouses and offices into a new model that gets goods to stores more quickly.”

At the Descartes Evolution 2018 conference in March, Mark Holifield, Home Depot’s Executive Vice President of Supply Chain and Product Development, discussed how the retailer is investing $1.2 billion over five years to redesign its distribution and delivery network to “create the fastest, most efficient delivery in home improvement.”

Target is the latest company to recognize that “the way we’ve always done it” is not going to work anymore. According to an article in the Wall Street Journal:

Target is testing a new distribution strategy aimed at speeding up its restocking and making the retailer more nimble at stores and online…The aim is to pare what Target calls its replenishment cycle from days to hours and reduce inventory at stores, especially at the retailer’s new small-format stores and locations in denser urban areas. The approach, now in pilot mode at a warehouse in Perth Amboy, N.J., also uses the same pool of inventory to replenish stores and fulfill online orders, a departure from Target’s existing supply chain.

Under the operation Target is testing at the New Jersey facility, called a “flow center,” the company sends shipments to stores more frequently and in smaller lots tailored more precisely to demand rather than shipping big cases of products…That could mean shipping “five bottles of shampoo, a case of ketchup, two polo shirts on hangers and a pallet of water, all prepared to move out directly to the sales floor,” [Preston Mosier, Target’s senior vice president of global supply chain and logistics field operations] said. “Or it could mean sending similar items prepared to move directly to a pack station to later go out to a guest in the neighborhood.”

The bottom line is that the supply chain and distribution networks of many retailers, manufacturers, and logistics service providers, which were originally designed to flow truckloads of products from large distribution centers to stores, are becoming outdated in this new market where speed of delivery and inventory reduction are paramount. While there’s a lot of buzz today about digital transformation, the reality is that there’s a lot of physical transformation that also needs to take place, and it will be a long and costly process, just ask P&G, Home Depot, and Target.

So Many Visibility Platforms, Yet So Much Blindness

I’ve been an industry analyst for almost twenty years. Over that time period, achieving end-to-end supply chain visibility has been a top priority for industry executives and countless “visibility” solutions have been introduced to the market — yet achieving end-to-end supply chain visibility still remains an elusive goal.

This week DHL introduced yet another supply chain visibility platform called MySupplyChain and the press release reads the same as so many others announcing similar solutions over the past two decades:

The secure and easy-to-use platform integrates data from DHL Supply Chain applications, providing customers with complete supply chain visibility, accessible online anytime, anywhere, through a single login.

Through one comprehensive and customizable platform, MySupplyChain allows customers to access track-and-trace data, inventory, operational performance and reporting, business analytics, customer service and more from any desktop or mobile device. MySupplyChain users gain end-to-end visibility of global supply chain operations – from shipments entering the warehouse to final delivery – all in near real time.

What’s different today? Well, today’s technology is obviously more powerful and user friendly than in the past, and we have more ways to collect data via GPS, cellular networks, mobile devices, APIs, and sensors. We’re also seeing logistics service providers take a leadership role in developing and deploying these visibility solutions. For another example, see C.H. Robinson (a Talking Logistics sponsor) and its Navisphere Vision announcement last September.

What hasn’t changed? Supply chains are still mired in crappy data and companies still don’t invest enough in data quality management, which is why despite all of the advancements on the technology side, having timely, accurate, and complete supply chain visibility remains an unfulfilled objective for most companies.

For related commentary, see The Big (Crappy) Data Problem in Supply Chain Management and Made in “I Really Don’t Know”

Free, Easy, Fast: New Adjectives for Transportation Management Systems

Last week, Kuebix (a Talking Logistics sponsor) announced that more than 10,000 companies are using its transportation management system (TMS), driven in large part by its free TMS offering launched last October.

AscendTMS has also been providing a free TMS to the market, billing it as an easier and cheaper solution than competitive offerings.

Now we have Cloud Logistics, which a couple of years ago launched a Same-Day TMS campaign and this week announced the launch of its new brand “TMS Made Easy.” Here are some excerpts from the press release:

Multiple companies have deployed the software in a single day. Moderately complex projects can be completed in a matter of weeks.

Whereas most TMS require days or weeks of classroom training, the Cloud Logistics’ system is highlighted by an intuitive, clean user interface and workflow. Most end users require no more than two hours of web-based training to become proficient and productive.

These are all examples of a trend I wrote about two years ago in The Transportation Management System Barbell:

We’re seeing the TMS market move in two opposite directions. Some solutions are becoming broader, more integrated, and feature-rich (multi-mode, multi-geography, complex optimization), while others are offering more limited capabilities, but with a stronger focus on ease of use, faster deployment, and affordable and transparent pricing.

The addressable market for TMS remains large and there’s a piece of the pie for everyone; the challenge for vendors is differentiating themselves in the market, and “easy, fast, and free” is the new path some are taking.

For the rest of last week’s news and to sign up for our newsletter, please visit Talking Logistics.