Manufacturing Tracking Software

Eggs are a big hit at my house.  In fact, my wife has declared poached eggs to be her favorite food (while good, I can’t imagine passing up pizza for a poached egg, but that’s just me).  I assume that most families are similar to ours and eggs provide a quick, easy way to get some protein into any meal.  I think this is core to the reason why the current egg recall is hitting a sensitive spot for many Americans.

More than 500 million eggs have been recalled in recent weeks.  Nearly 2000 people report being sick from eggs thought to be carrying salmonella.  The eggs are traced back to a pair of Iowa farms with common ownership.  Like many food products the eggs were then marketed under multiple brand names and through various distribution networks. 

Some troubling information about this event is that despite the first signs of contaminated eggs occurring in May, the recall was not conducted until August.  The finger pointing between producers, government agencies, and consumers continues today.  Based on this recall, recent peanut recalls and growing concern by Americans over food safety, I would guess we will see more strict federal legislation governing food safety soon.  In fact, the timing would be perfect for the FDA Food Safety Modernization Act to pass the senate in September.

While many industries fight additional regulation, many major food brand owners have advocated for this type of legislation.  A CNN Money article highlights some of the financial impact on brand owners when a recall occurs.
•    Kellogg’s took a $34 million hit in their 2008 earnings as a result of the peanut recall.
•    Overall peanut butter sales volume declined by 22% at the beginning of 2009

As with most legislation, the Food Safety Modernization Act is descriptive in terms of authority, but vague in terms of how companies would implement practices to support improved safety in the food supply chain.  Here are a few pieces from the current legislation and my thoughts on how technology can be used to help enforce the process.

“require that each person (excluding farms and restaurants) who manufactures, processes, packs, distributes, receives, holds, or imports an article of food permit inspection of his or her records if the Secretary believes that there is a reasonable probability that the use of or exposure to such food will cause serious adverse health consequences or death”

This bill pertains to the majority of the food value chain.  Food chain participants must be able to create and store records related to the products they handle.  Clearly, technology can assist with the capture and storage of this information.

“Requires each owner, operator, or agent in charge of a food facility to: (1) evaluate the hazards that could affect food; (2) identify and implement preventive controls; (3) monitor the performance of those controls; and (4) maintain records of such monitoring.”

Again, technology will play a critical role implementing preventative controls and monitoring the performance of the controls.  Supply chain technology can help support best practices such as stock rotation (first-in-first-out, first-expired-first-out), lot/batch tracking, product labeling, and quality inspections.

Additional Resources:
Fisher Nuts improves traceability in manufacturing and warehousing operations with HighJump warehouse management (WMS)
Three Components of Product Traceability in the Food and Beverage Supply Chain
Mom’s Foods Case Study

I have to admit I am not an avid World Cup soccer fan...but I have enjoyed the coverage and subsequent drama unfold with a few of the higher profile upsets and controversial rulings on the field.  The ironic story regarding the English team's history with the "Ghost Goal" certainly caught my attention (England clinched its only World Cup victory in 1966 with a similar dispute goal line marker) as the one disallowed versus Germany, en route to a 4 - 1 German victory.

What I found particularly interesting was reading how Sepp Blatter (FIFA President) first maintained the "human aspect" of the game was key and could not be replaced, only to later change positions and seem open to technological advances to assist the officials.

http://www.guardian.co.uk/football/2010/jun/29/sepp-blatter-goalline-technology

How does this relate to direct store delivery (DSD) companies and their challenges?  It seems that Sepp did some soul searching and came around to the concept of at least considering, if not implementing, technological advances.  So what are some signs for DSD companies to recognize when it is time to move forward with a project that advances their use of technology?  Below I talk about five points that really should trigger at least an investigation into what alternatives exist.

1.  Hinderance or Help?
Your company bought that software (route accounting systems (RAS), mobile sales solutions, or maybe an inventory application) or possibly hardware with the intent of helping your employees get the job done faster and better than ever.  At first things were great and you saw immediate improvement in your daily process, but those days are gone.  Today you are more frequently forced to create work arounds or miss opportunities all together due to limitations in your technology suite rather than it helping you achieve improved results.

2.  Reliability Issues?
How often do you hear your route drivers complaining of having to "re-key" a route due to data loss?  Or perhaps a rushed purchase order has been placed due to an unrealized inventory issue from a batch posting failure?  A better question would be - how many times can you let this happen before you realize there is a problem?  Whether it is hardware or software that is letting you down, when these solutions start to impact your business due to failure it may be time to act.

3.  Falling behind competitors?
When the calibre of your lawn falls behind that of your neighbors there may be some good natured teasing involved, but not much more.  When your ability to deliver goods, invoice accurately or manage your supply chain falls behind your competitor you have a much more serious issue to deal with.  In today's economy DSD providers are having their margins tightened while dealing with increased costs, so this is no time to give your competition a head start!

4.  Increasing Cost of Ownership?
What did your IT staff look like when you first implemented your route accounting system?  How did you roll out sales process changes with your route salesmen?  What budget do you allocate to these activities now?  Upgrades, maintenance, support and enhancements are all costs that hit the bottom line.  If your IT spend continues to grow but your ability to handle new functionality (or possibly even maintain the status quo) hasn't progressed, isn't it time to start asking why?

5.  End of Life?
Perhaps one of the more feared phrases of the IT world, if the above listed points haven't triggered the proverbial "spidey senses" then this one surely will start your temperature to rise.  When Microsoft or IBM delivers the notice that product "X" is getting the End of Life treatment you may be able to stretch your utilization past the date, but if anything goes wrong the costs to support / correct / replace will be substantial.  Better to act quickly and start identifying alternative paths to support your business. 

The list of compelling events for your operations may be considerably different depending on the circumstances in which you exist.  But by reading this, I trust that you are actively monitoring where you stand in your technology's life cycle...and good luck making your decisions!

It’s the point of decision: the consumer is reaching through the convenience store cooler door to grab her chosen brand. What affected her decision? What if you see each DSD technology touch point involved in getting the product to the store, and understand how it affected the consumer’s decision?

HighJump’s new video makes it easy to understand how a modern DSD suite works together, including route accounting system (RAS), mobile presell and delivery, surveys and data collection, load optimization, GPS tracking and more.

 

Related posts: The Real Components of a Direct Store Delivery Software Solution

 

Walmart….I know it is almost universally recognized as a dirty word for the many challenges they create for their DSD suppliers.  However, today I would like to talk about the beneficial changes to operations that have resulted from their ASN initiative.

Let’s first look at how many “traditional” DSD vendors handled their order flow before ASN’s (I am going to state the implied assumption of pre-sold orders rather than peddle sales here, but really ASN is conceptually impossible without pre-sales).

1. Order is received by vendor “X” hours or days in advance of required delivery (the method of entry is for another discussion at a later date) into route accounting software.
2. Order goes through some level of processing to determine how it will be built.  Eg. Products are aggregated with common packages, or order is built specifically for customer (read my previous blog on whether to build by order or not).
3. Pallet(s) are built by the distribution warehouse staff with paper pick tickets / load sheets.  Possibly with, but more likely without checking of pallet content.
4. Driver shows up the following morning and verifies his load content and has to either manually pick additional product to replace short picks / miss-picks, or if they are lucky gets some help from the receiving staff.
5. Driver delivers goods to store where additional invoice/delivery adjustments may be required due to earlier verification issues.

This process obviously has some fairly inefficient steps here, but I think it is safe to say this was generally accepted, and even still is today with many small to medium sized distributors.

The Walmart ASN initiative continues to roll out across North America.  To be compliant DSD suppliers not only have to pick at a rate of near constant perfection, but they also have to submit this information well in advance of the driver showing up at the back door with product.  Meeting these requirements means manual picking processes have to go away and any pick discrepancies must be accounted for AND communicated in advance of delivery.   This means adding a step to update pick quantities and another step to update delivery handhelds have to above process.  It doesn’t take a rocket scientist (no offence to the rocket scientists), to figure out the changes required to complete these tasks cost $$.  But let’s look at how these operational changes provide benefit beyond being able to continue to supply Walmart with product.

1. Productivity Metrics:  by using either a handheld or mobile computer solution you should be able to track more data than just updated pick quantities.  Why not select a solution to track picking time to generate productivity numbers?  These metrics could be used for incentive picker compensation or alternative motivation plans.
2. Driver Check Out:  with loads already reflecting the changes to pick quantities driver checkout processes should take far less time, getting them out into the trade faster.
3. Delivery Time Reduction:  similar to point above, with accurate load/invoice information route drivers reduce time required to handle the administration side of mobile sales, and should be able to spend more time actually servicing stops.
4. Risk of Fraud:  unfortunately fraud happens…but with accurate order/invoice numbers the need for invoice adjustment will theoretically go to zero.  While I doubt the zero adjustment goal will be present 100% of time, far fewer invoice adjustments means those that happen need better explanation and can be investigated to confirm legitimacy.
5. Route Reconciliation:  here is yet another spot where accurate orders result in time savings.  The lack of invoice adjustments, and accurate inventory numbers save labor for route drivers and reconciliation clerks alike.
6. Inventory Accuracy:  actual pick quantities rather than relieving inventory based on expected numbers give your operation and sales teams real on hand data to know what needs to be ordered, and what is available to sell.

As you can see there are definite benefits to implementing a process solution where actual picked quantities are efficiently tracked.  To truly reap the benefits of this process though, operations should be applying this supply chain improvement not only to their Walmart ASN accounts but to all (or at least the majority) of their accounts!

Traditional perceived challenges to dealing with Walmart aside, I think this is one area where the supplier integration changes they have created in the DSD supply chain best practices are actually forcing operations to become more efficient!  I hope that you consider some of the points above and how they could help your direct store delivery operations as well.
 

I spent last week at the BevOps show in Tampa, Fla. During this show there were lots of great conversations about methods to reduce operational costs and conserve resources. One topic I heard several case study speakers discuss was route optimization. Route optimization is not new. Whether it is done by software with cool algorithms that connect stops with lines and dots, sales managers with spreadsheets & maps or even to a degree by drivers, it has been going on for a long time for direct store delivery (DSD) players. However, when fuel prices dramatically jumped in cost I think most DSD customers immediately started reconsidering how frequently they were looking at their routes, and optimization software became an instant hot button for many.

The ability to reduce the number of wheels &/or miles on the road is certainly appealing to fleet managers as they attempt to control cost of goods sold. My question is not whether or not you should optimize routes and potentially consolidate routes…my question is, how do you evaluate the cost savings versus customer service levels?

If we were dealing with another industry where your delivery driver just dropped goods off at the back door and then went on their merry way, this would be easy. Find an optimization package that works for you and run with it. However, DSD does not work that way. Route drivers have many different roles to fulfill. Those roles change drastically from one DSD organization to the next, and even within an organization they change from route to route. These drivers interact with customers on many different levels. Perhaps your route driver is responsible for product placement on shelves / merchandising? They may be responsible for taking pre-orders from customers as well for the next day’s delivery. Or they may be even more involved and actively assist the customer with the management of their inventory levels. The bottom line is a DSD route driver is far more than a delivery driver. These route drivers are far more likely to be a key part of customer relationship management, than just a part to be interchanged at random to save a few bucks in fuel.

I am not saying route optimization doesn’t have benefits…it absolutely it does. What I would like to hear from people considering implementing an optimization solution is that they actively considering how to best manage that customer-driver relationship as well. Perhaps this means having dedicated pre-sales teams? Or identifying those customers where the tolerance for change is far greater versus those that require active management of that key relationship and flagging those for a static route/driver assignment.   

DSD distributors make cost versus customer service decisions all the time (as do all companies). This is merely another one of those key points that need to be addressed. Quoting cost saving statistics with graphs and ROI projections may look sexy in boardroom presentations, but without considering customer service levels and the impact to sales you may be selling this decision short. Looking at the other side of route optimization should really be part of this project evaluation.

Related Resources
HighJump RouteTrack Datasheet

Why am I happy that people don’t consider last Monday night’s college basketball game the greatest final ever?  Luckily for me Gordon Hayward’s shot glanced off the rim and backboard allowing Duke to capture our fourth national title.  Hats off to a great Butler team and a phenomenal tournament.

 

Now onto the topic of inventory. If you ask most CFOs, they would point to the balance sheet and tell you the dollar amount of inventory on the books.  It seems like it should be an asset; it is something your company spent time and money to create.  Heck, we make a living selling millions of dollars of software and services so companies can better manage and track their inventory with warehouse inventory management systems. 

 

So why is inventory not an asset?  Why does Dell dictate their suppliers locate their warehouses literally across the street from their facilities?  Why has the concept of consigned inventory become popular in the retail world?  Why do many companies such as Amazon and Target not ever inventory the item but allow the manufacturer/distributor to drop ship directly to the end customer?  All of the above practices allow the company with power in the supply chain to delay or completely remove the necessity to take actual ownership of the physical product.  Inventory has become the proverbial hot potato.  No one wants to take ownership of the inventory and if they are forced to, they want to own it for as little time as possible.  If inventory is an asset, then why does no one want to own it?

 

In almost every industry, the day the brand new product comes off the manufacturing line is when it is most valuable.  Every week, day, minute afterwards the inventory is at risk of losing value:whether it is actual expiration dates/best before dates for food products, technology obsolescence as everyone is pushing for the next generation product, or the latest edition update to a college text book.  This is why FIFO (first in first out) is such a popular pick algorithm as it rids the business of the asset that is declining the fastest and keeps the product with the longest runway on the shelf.

 

Another reason inventory is not an asset is the working capital it ties up.  Every piece of inventory your company has in its possession is money that could potentially be used elsewhere in the business.  The company loses the “optionality” to find the best return those dollars could generate.  While it is quite possible putting that money into inventory of a hot product is absolutely the right decision, once the decision is made you cannot get that dollar back and put it into R&D or hiring a new person.  This makes it absolutely essential that your company watch closely your investment in inventory.

 

It is surprising that many companies have not reduced the amount of inventory they keep in their supply chains.  In a recent post by Dan Gilmore at Supply Chain Digest, he details by industry how many companies have not appreciably reduced their inventory since 2004.  In a day and age when investment of every dollar matters, maybe people need to take a closer look on how to optimize their inventory levels throughout their extended supply chain. Supply chain management software solutions can help. Au revoir, Go Duke!

Related Posts:
Where is Your Inventory? Even Today Some Companies Still Don’t Know

All of the Inventory I Want to Ship Is Sitting In My Yard!

When Metrics Turn Evil

 

What’s so difficult? If you’re a third-party logistics provider (3PL)/logistics services provider (LSP), all you need to do is provide efficient warehouse management, exceptional inventory visibility, seamless freight management and timely and accurate 3PL billing. Oh, and you need to do it all more cheaply – and just plain better – than your customers can do it themselves. Bit of a tall order, especially when you’re trying to post your own profit too! 

I imagine trying to stand out among other 3PLs is similar to any other more commoditized service. You’ve got to: (1) Find a way to attract new customers and (2) Keep the customers you already have so happy that they’ll gladly tell their peers about how fantastic your services are.

One of the advantages of being in the fast-growing logistics services space is that technology providers have their development teams working overtime to create tools to make things easier for you. With modern supply chain management software, you have the means to achieve those two huge tasks. Here are a few examples.  

·         Facilitated on-boarding new customers – the quicker you can do it, the sooner you can get paid, right?

·         Getting the billing right – new automated 3PL billing technology is making it simpler make sure you are getting paid for each service you provide, and that you can easily account for those charges. You can also preset billing rules at a very granular level – a detail which might help your sales team seal a few deals?

·         Tracking inventory attributes – it’s the nature of your business – every customer wants to track different attributes, even if the items are exactly the same as another customer. Now you can set up detailed – and different – rules for each customer.

·         Offering more value-added services – the best way to set your business apart from 3PLs that just provide shelf space. These value-added services can be anything from repackaging to relabeling, kitting and light manufacturing. Adaptable supply chain technology can support the adding of new services that your customers are waiting for.

Guess it’s just perspective…it’s a challenging, cost-conscious industry, but you’ve got access to the technology to let you go grab your share of new business.

Related resources
Special Report: Four Ways 3PLs Can Harness Technology to Attract Customers and Drive Profitability

Hello Everyone. I’m excited today to take the helm as HighJump’s new CEO. I am grabbing the wheel from Tim Campbell, who’s done a terrific job leading the team, serving customers and delivering world-class products. The entire HighJump team is energized about the direction and growth ahead for the company, and know that together with our customers, we’ll continue to make great strides in the supply chain market.

There’s more detail on my background in today’s press release announcing this news, and in my bio. I look forward to meeting many of you in-person, and hope to use this forum from time-to-time to communicate with you about the strategy and direction for the company. 

Many new phrases have become part of our everyday lingo as a result of the recession. One of my favorites is "Shovel Ready" It’s not nearly as cryptic or technical as "TARP" aka, Toxic Asset Relief Program, but it’s catchy! It’s a term that was used by President Obama in a Dec 7^th airing of Meet the Press when he talked about the kinds of projects that the stimulus bill would help most. It wasn’t long after that when we began to hear every local politician use the term on the nightly news! Congress made the term quasi official when it incorporated the spirit of the phrase in legislation that provided stimulus money to construction projects that could be started within 90 days of receiving the funds. Meaning only those projects that had already completed the necessary preparatory tasks  before the project could actually begin.  Being an system implementation project manager, I’ve developed affection for the term! 

Not all projects require a ‘shovel’ in the toolbox of things needed to get the job done, but all projects do indeed require a period of preparation before executing them.  So, I ask… is your WMS - Warehouse Management System implementation project "shovel ready"? Perhaps you’ve just purchased a new WMS system to replace a technologically outdated one or to replace a paper based system.  Either way, there are many things you can/should do to prepare for this life changing event!  One of the more fruitful yet least desirable tasks in preparing a warehouse for a new system is general housekeeping! 

• Got inventory that is aged or obsolete still gathering dust on your shelves? Write it off, toss it, donate it, recycle it, return it to the vendor, but by all means get rid of it! Got the same item located in seven different locations around the warehouse? Consolidate it to as few locations as practical.  
• How about inventory sitting at the ends of the aisles, or on the  office supply racks, or sitting on the floor of someone’s office? (really, I’ve seen this). Move it to where it should be - even if that means out the back door! 
• How about old torn and faded shelf/bin labels that are now unused residue of a re-slotting project? Get the goof-off out and remove them, as it’s likely you’ll be doing some bin re-labeling as part of your WMS Management System implementation.  
• Got any racking, shelving, material handling equipment like wobbly carts in need of repair? Do yourself a favor and include repairs as part of your ‘shovel ready’ preparations - it’ll be a visible demonstration of management’s commitment to change.
• Then there’s the data scrubbing task.  Everybody has ‘junk’ in their item files – discontinued or obsolete items, duplicate items, and even non-existent items! Have your IT folks clean the data ‘house’ before you convert. 

I could go on, but you get the idea. A ‘shovel ready’ WMS implementation will go a long way in smoothing the often bumpy road to a successful transition.

I recently received a direct mail marketing piece from a HighJump Software competitor. The mailer included a press release announcing that this company had “enhanced direct store delivery integration” and a one page datasheet which described a direct store delivery value chain as manufacturing + regional warehouse + mobile resources + retail shelf.

 

HighJump Software is the North American market leader for direct store delivery software solutions. If our primary competitor in the warehouse management systems market had encroached on our market position I needed to know. Perhaps they had acquired a route accounting solutions provider or acquired a provider of mobility solutions for mobile selling and delivery at the retail location. I consulted a trusted industry analyst who confirmed my suspicions… this was marketing hype and this company’s approach to direct store delivery still had significant “holes.”

 

Anyone familiar with the value chain of direct store delivery companies knows there are some specific complexities that must be addressed in order to have “comprehensive coverage across the extended supply chain.” Here are some things companies should consider when search for direct store delivery software solutions:

 

Certified Route Accounting Systems

Route Account Systems are unique software systems to manage the complexities of route-based sales and delivery. They typically manage the entire order-to-cash cycle and are geared toward the world where sales, inventory, and business metrics are all tied to a “route.” Although traditional ERP systems can be used for route accounting systems, they typically require customization to deal with complex pricing/promotion, cash settlement, truck inventory, and supplier e-commerce integration. To further understand the complexities in the beverage value chain read It is Hard for Anheuser-Busch to be Procter and Gamble.

 

Mobile Sales and Delivery Applications

Success or failure in a direct store delivery business is determined at the store shelf. Direct store delivery companies have large workforces of mobile sales and delivery professionals who need to be equipped with mobility technology for them to effectively accomplish their objectives. HighJump Software provides a comprehensive suite of mobility products which support industry best practices for order capture, goal-based selling, delivery tracking and cash settlement. For more details on these solutions read about our latest mobility suite product release HighJump Software Enhances Mobility Solutions With New Release of Mobile Route Sales and Delivery Software Suite.

 

Load Optimization

Optimized loading of side bay beverage trucks can be complex. While there are numerous packages for creating optimized load plans of traditional van trailers or flatbed trailers, optimizing for side bay beverage trucks is another animal. Additionally, this business problem becomes even more complex when you have a “peddle” environment (driver selling off truck without pre-sold orders) and driver preferences must be taken into account at the load and pallet level.

 

I think the moral of the story is “don’t believe the hype.” Direct store delivery software solutions are specialized for the unique needs of this industry. Direct store delivery software solutions deal with complexities of supplier integration, cash settlement and truck inventory. A WMS, TMS and retail workforce solution will not meet the needs of most food and beverage distributors in their direct store delivery operations.

There is an interesting term I have heard over the years about people who do the actual direct store delivery job. It goes something like, “If you are smart enough to do the job you may be too smart to take it.” The implication is that to do a really good job you need to have a kind of personal discipline and commitment to success as well as skill with people and sales that are not often found in industries where there is such a physical component. I have had the pleasure of working with and meeting many superstars in this industry; they are truly one of a kind individuals and are very talented. There is a true disconnect between the incentives put in place for many of these talents and a kind of regimented distrust that is prevalent in the DSD industry.

 

This brings us to the topic du jour. Much of the incentive in the industry is sometimes based around a relative distrust of the workforce. This can be demotivating in many cases. One of the most interesting strategies I have seen is by taking the normal performance metrics and including the route people in a kind of daily planning. The route supervisor meets each route man at the end of every day with a pile of reports: sales, returns, missed stops, time reports etc. and having a daily meeting. You change this meeting from being a performance meeting to being a planning meeting to go over what went right and what went wrong. Out of that, you develop strategies to improve tomorrow. Then you pay the route people on performance improvements.

 

Posting any great ideas or trends on a weekly board creates a kind of buzz around improving the sales. The people on the road are often quite bright and often underutilized. This experience can be used for the good of the company as long as you just ask. Of course there are exceptions. By and large, the biggest improvements in your very particular world are sitting at your fingertips for the asking. Often the man on the street simply feels no one would listen if they suggested something. What great opportunities lie out there. Our mobile delivery customers that have done this are getting spectacular results. Just a thought: turn the punitive controls into positive affirmation and change the culture.

Almost every company spends time and energy on customer focused marketing campaigns and strategies. We go to trade shows, buy advertising and put up great websites. Strangely, we spend almost no time or effort on marketing to our own people so that they carry that message forward to the customer as an enthusiastic advocate for the company. The people who deal with the customers are the best carriers of the corporate banner; a few bad apples spoil the entire basket.

 

As we deploy mobile sales, service and delivery systems for our direct store delivery and route accounting systems customers, it occurred to me that we are putting a device in the hand of everyone who directly serves our customers. We actively tell people about the great multi-media features that are available in these mobile delivery devices. You can show slides or commercials and look at spreadsheets. Why isn’t this device being used to market the value of the company to carrier rather than just the end customer? We track quotas and targets, maybe we could use it to improve and mold the impression our people have of the companies they work for.

 

Nothing sells better than enthusiasm and a belief in what they do. My thinking here is that with so much of our lives being interacted with through web-based and hand-held based technology, we could take a page out the internet book and ensure our own people are surrounded by the messaging they should be bringing to the customers. Everyone is on Twitter and Facebook; we are all used to seeing banner ads and messages all day long. What if we used that type of idea to reinforce the ideas we want carried forward about our own company or products. Many of these adds are contextual; think about how that might work when you sales person is dealing with a specific customer face to face.

 

This might be one of those cases where we are so used to working on one end of a problem that we didn’t know the other end existed. Just a random thought ...

When you hear a news story about a supply chain issue at your favorite retailer, you might think that it is not your problem, but you might want to reconsider.  According to the recent 2009 Global Retail Theft Barometer Report from the Center for Retail Research, United States retailers lost an astounding $42.2 billion last year due to retail crimes such as shoplifting, employee theft and supply chain fraud/errors.  The $42.2 billion breaks out into the following main categories:

 

• $18.7 billion for employee theft
• $15 billion for shoplifting
• $6.8 billion for supply chain errors or fraud

That $6.8 billion a year translates to over $70/year of additional cost the average family pays because your retailers do not have the appropriate technologies and processes to reduce these errors and catch instances of fraud.  All of the costs above translate into higher prices for consumers since the retailer needs to cover the costs to stay in business.  The report estimated that the cost of store crimes to consumers is over $435 for the past year.  These are meaningful amounts for most families and might warrant the question: what are you (retailer) doing to make your supply chain more secure from source to consumption at the retail shelf?

 

While I am sure many retailers are painfully aware of the statistics, these numbers should be a wake-up call for many retailers about the need for additional investment in track and trace technologies and supply chain logistics software. An important fact this study highlights is that not only is shoplifting a major issue but having your own employees steal from the company is a problem that needs a better solution than many retailers have today. With improved supply chain visibility and a movement toward real-time inventory availability on the store shelves, retailers will have better information to start uncovering areas that merit additional investigation.  At these levels of loss many companies will have a compelling ROI case.

 

Next time you speak to a friend who works at one of your favorite retailers, you might want to ask if they are investing enough in supply chain technology and visibility from store shelf to purchase. It could end-up saving you some money.

HighJump’s new VP of Sales, Jim Bork, was in my office the other day and asked me, “Why don’t more people implement our Yard Management solution?” After hearing a customer case study at Innovation 2009, HighJump’s annual user conference, where the customer claimed benefits from yard management in excess of $1 million, Jim wondered why all of our customers wouldn’t leverage this technology. As I started thinking about this question, I realized that maybe companies are looking at the wrong business case for yard management.

 

What is Yard Management?

Yard management is a kind of supply chain logistics software solution that tracks trailers and containers in a yard outside of a manufacturing facility, warehouse or distribution center. Using workflows, the software can support the following activities:

·         Driver check-in or check-out including collecting all relevant data from the driver and tying the arrival to a specific dock appointment

·         Optimized storage of trailers or container within the yard. Trailers with “hot” product can be moved directly to dock door locations. Other trailers can be dropped in the yard for unloading in the future.

·         Visibility to trailer aging is provided so companies do not incur demurrage charges for holding a trailer in the yard for excessive time periods. (Trailers and containers are typically owned by a 3^rd party and holding them for too long can trigger a charge called demurrage).

·         Optimized work instruction is provided to yard drivers for moving trailers to and from dock door locations.

 

 

Work Optimization – The Old Thinking

Yard management provides benefits on multiple levels, however, most supply chain management professionals first think of the work optimization as the primary benefit. Work can be optimized creating labor savings and more efficient flow of inventory. However, if you “run the numbers” on a typical yard, labor savings alone will not drive a strong ROI on a labor management system.

 

The Safe Thinking

Safety and security has become a primary concern for many businesses in light of focus on national security in many countries.  A yard management solution will also provide benefits in the area of safety and security. Yard management systems help facilitate a single point of entry and exit from the yard. Additionally, a yard management system will systematically collect information about specific loads that could be used to comply with internal or homeland security requirements. While safety and security are important it is difficult to build a hard business case around these factors.

 

Inventory Optimization – The New Thinking

Companies with the most successful yard management initiatives find ways to optimize inventory across the yard, manufacturing facility, and distribution center. As companies in the US and Western Europe are transitioning from manufacturing-centric to distribution-centric, inventory in the yard has become a serious issue. Import-centric supply chains leverage low cost of materials and product, but suffer from long lead times and product obsolescence. Often this results in large amount of inventory being held in containers in the yard.

 

The best way to build a business case for a yard management system is treat your yard like an inventory buffer. An inventory buffer in the yard will allow many companies to carry additional inventory without facility expansion in their distribution center.
An additional inventory buffer provides significant benefits in terms of supply demand matching and perfect order performance.

 

HighJump has one yard management customer who drops orders to the warehouse for fulfillment even when the expected inventory only exists in the yard. This means they must coordinate a trailer move of inventory to the dock door, cross dock the needed product, and marry it with the other product required for the customer’s order. Clearly, this logistics capability is something to build a business case around!

 

So before taking your yard management system business case to the corner office, ensure you have considered all aspects of intelligent inventory positioning and supply chain management best practices that can be gained from a yard management system.

This year’s conference features nine customer case study presentations, giving customers an opportunity to share the cool things they’re doing with their HighJump solutions.  John B. Sanfilippo and Sons (JBSS), the makers of Fisher Nuts, presented this afternoon on how they use the HighJump WMS warehouse management system to manage its manufacturing operations and allergen and contamination prevention.

Keeping the nuts from comingling is serious business, and the HighJump WMS enables JBSS to enforce a strict allergen control program, including put away logic by nut type.  For example, the system doesn’t allow a worker to put away any nut that isn’t an almond on top of an almond.  These specific rules prevent contamination of allergens.

The system also enables work order processing and picking in the company’s manufacturing operations.  The system tracks the nuts all the way from the supplier through the manufacturing and distribution process.

Thomas Kirkham, Director of Systems Implementations, John B. Sanfilippo & Sons, Inc, highlighted the following benefits from implementing HighJump Warehouse Advantage.

·         Reduced physical inventories from quarterly to annually

·         Inventory accuracy over 99% - up from 80%

·         Service levels up from 90% to 99.5%

·         Picking efficiency increased 50% and rising

·         Inventory levels at record lows

·         Audit scores have increased

·         Food safety has become a selling point

 

 Watch this video to see the HighJump WMS in action at JBSS.

The human race is kind of crazy in that we seem to organize everything into neat little buckets.  If you were to drop in from space these would seem to make absolutely no sense. Being in sales, the difference between closing a deal this Wednesday (September 30) and next Wednesday is paramount even though it would make no difference to the company in the long term. The difference in that small snapshot is critical.  In most Direct Store Delivery businesses this arbitrary cutoff can be divided into much more manageable and achievable goals. In high transaction, low dollar businesses, you can’t leave it to the last minute.  Every day is quarter end to some extent in this type of business.

 

If you tell someone how they are measured, in general they can tell you how they will behave. Following that logic, if you don’t measure it, don’t expect it to happen. Very often, this key step is missed and we are left at the end of a period wondering why all of our hopes and dreams didn’t come true. In route sales, by publishing and tracking daily, weekly and quarterly goals, you can keep the field team motivated to sell that extra box, do one more stop or prospect for one more customer.  Growth comes from a lot of “one mores” put together in a line.  It very rarely comes from some monumental single event. More importantly, it is critical to communicate that these goals/targets are being watched. No one will care about the goal if you don’t demonstrate that you care about it. One of our most successful customers literally meets each and every routeman when they come in the door at the end of the day to review the day’s activities, results and to plan for the next day.  Active management in a team environment where everyone is committed to the same goals and results creates a pretty amazing selling environment.  They may not make their numbers every quarter, but they make it or lose it together and they know where they stand every day.

 

Sometimes we tend to look at the end goal and don’t give any thought to how we will fill the void between where we are and where we go.  I think my daughter said it best when she said “just one more daddy.”  Kids have this figured out when they are 4; it seems to take us adults a lot longer. Everyone is saying that times are tough. As a collective team, if we all just do “one more” (whatever that might be) then we harness a lot of productive power into our businesses.

A company that is a manufacturer and distributor of baked goods recently put out an RFP for WMS Warehouse Management System.  During the process HighJump Software and a few other best of breed WMS providers were considered.  What became apparent during the sales process was the company needed more than just a WMS system.  Expiration date and batch tracking are critical with bakery products and having their manufacturing process inter-linked with the distribution processes was vital to prevent inventory waste.

 

Many other systems would optimize the processes and inventory within the warehouse but this could result in an overall sub-optimal result by not taking into account raw material inventory and finished goods at the manufacturing sites.  They needed a solution that could optimize their manufacturing processes while providing inventory visibility from raw materials to finished goods.  HighJump Software is one of the few software providers that can provide a Manufacturing Execution System Software and WMS Management built on the same platform.  This allows companies to have inventory visibility throughout their supply chain.

 

In the end, I am happy to say the company saw the value of an integrated solution and selected HighJump Software.

Image via Flickr user loop_oh

CobornsDelivers is an online grocery delivery company that services the Minneapolis - St. Paul metropolitan area.  Back by a strong commitment to customer service, the company utilizes the latest technology to ensure easy ordering, fresh products and on-time, accurate delivery.

Its previous WMS warehouse management system had stability issues and downtime was becoming a significant concern. The outdated WMS was hindering the company’s ability to manage growth because it could not accommodate changes and upgrades cost-effectively.  To solve these challenges, the company implemented HighJump Warehouse Advantage based on the system’s depth of functionality, ease of changing processes, and reliability in handling inventory track and trace functions such as expiration date tracking and rotation.

Learn more about how CobornsDelivers and how it implemented supply chain management best practices by reading the success story: Innovative Online Grocer CobornsDelivers Achieves Success With Customer-Centric Distribution. 
 

About 24 months ago at our midyear sales meeting I unveiled HighJump’s strategy to more aggressively target logistics service providers with our supply chain management software solutions.  The reaction from the sales team was mixed.  Logistics service providers are notoriously highly variable sales processes because the system purchase is typically tied to the acquisition of a new client for the logistics service provider.  The market data supported our strategy.  Use of logistics service providers is increasing worldwide as more companies outsource all or a portion of their logistics capabilities.

Times have changed.  The sales team now loves this strategy as logistics service providers are turning to HighJump Software for their supply chain logistics software.  The most recent logistics service provider to select HighJump is Cresent, a leading logistics outsourcing partner for a number of consumer goods companies.  Read the HighJump news release regarding Cresent.

HighJump WMS Warehouse Management System will automate many of Crescent’s previously manual warehouse processes and optimize the movement of goods throughout Crescent’s distribution centers, boosting productivity and inventory accuracy. The system will also enable the company to meet customer traceability requirements for batch and lot code tracking. Crescent will also be able to interface to customer ERP systems, a requirement that often previously hindered new business wins. The company will utilize HighJump’s Manufacturing Execution System Software in its co-packing operations, where it assembles product multipacks and builds product displays.

Why are so many logistics service providers turning to HighJump Software for their supply chain logistics software?  Here are few of the contributing factors.

Billing Management
HighJump Billing Management helps ensure maximum revenue and minimal billing cycle time by enabling activity-based billing of each client according to their distinct attributes. Appropriate charges are automatically generated for storage of goods and any other services you perform as a logistics services provider.
HighJump Billing Management’s capabilities extend far beyond billing and reporting. This comprehensive solution can also help make your business more attractive to current and potential clients by enabling you to offer more value-added services, superior inventory control and overall cost reduction—making you stand out in a commoditized logistics marketplace.

Dynamic Inventory Attribute Tracking
Logistics Service Providers have complexities of handling a variety of products with complex tracking requirements.  The same facility may manage perishable products that require best before date tracking, apparel that requires style color size tracking, and electronic products that require serial tracking.  With HighJump WMS Solutions all these attributes can be tracked in the same inventory model.  In fact, as the logistics service provider encounters uncommon data tracking requirements they can configure the solution to track these inventory item attributes.  Additionally any of these attributes can be shared with end clients through inventory visibility portals.

Integrated Transportation Management
Many logistics service providers in traditional public warehousing or in contract warehousing are branching into managed transportation services.  HighJump Software provides a transportation management solution used by many logistics service providers and is fully integrated with WMS warehouse management system.  The TMS support management of buy-side and sell-side contract rates allowing a logistics service provider to manage rates for contract carriers and separate rates for the price they sell the transportation service to their end client.

Flexibility to Meet the Changing Needs of Clients
The most important business differentiator for a logistics service provider is flexibility.  Existing clients frequently have new requirements and winning new business often requires changes to the operations and supporting systems.  HighJump has developed an out-of-the-box rules based architecture to allow logistics service providers to create unique rules that influence how a process works in the warehouse.  The rules can then be assigned to a client, an item, a vendor, or any attribute within the WMS warehouse management system.  Additionally if a standard rule cannot meet the specified requirement, a new rule may be created using Advantage Architect, HighJump’s workflow management adaptability tool.

Image via Flickr user tomsaint11

I always tell my daughter, “You are going to get an ouchie if you jump on the bed."  The general response I get is continued jumping with a look of glee because it is so fun…… until she bounces a little to one side and hits her head with tears freely flowing. 

Below are a few thoughts about potential pain points if you decide to jump on the 3PL bed:
• Inefficient management by 3PLs was voted as the top reason an outsourcing strategy can fail .  A common mistake companies make is to sign-up a 3PL and not manage them.  Even though you have outsourced some of your supply chain functions, you will still need in-house management capacity to track the performance of the 3PL and hold them accountable for deliverables.
• According to a recent study by Cap Gemini and Georgia Tech, only 36% of companies are satisfied with their 3PL’s technology capabilities.  A 3PL needs to have state-of-the-art technology to easily onboard new clients.  Without this, there could be significant time delays or unexpected work required by your I.T. organization to make the partnership work.  This should be a key area of your due diligence when evaluating 3PLs.

While there are other pain points that should be considered, this provides you a few of the important ones and how to address them.  Hopefully that will help you avoid an “ouchie” or two.