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Manning Sustainability at Sea
SDCE honors leading cargo freight shippers and global businesses in annual Green Supply Chain Awards
The Purchasing Power of Sustainability:
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.................... Supply & Demand Chain Executive honors those that enforce green practices as a core function of their operations in our annual “Green Supply Chain Awards. 18 EXTOL.......................17............... This month.... medical device and biotechnology companies must act now to prepare for the changing landscape of life sciences 26 Market Segments 29 Green Factors Unwrap the Savings in Retail Holiday season or not.... leading supply chain providers provide their best practices for optimum supply chain efficiency and end-user benefits............................... tighter profit margins and increased market competitiveness paint the picture of today.. numerous global companies continue to amp up their game on “green” to build more sustainable supply chains and mitigate the impact of their business processes on the environment.... everybody wants a piece of the retail action By Natalia Kosk Blazing the Trail of Sustainability Accept trade-offs in order to optimize supply chain strategies By Dr..24.Table of Contents December 2012 Volume 13 Issue 4 INSIDE 6 Executive Memo By Barry Hochfelder Tragedy Doesn’t Choose a Season Holiday supply chains must regroup after devastation of Super Storm Sandy 12 Sustainability Output 15 Global Focus COVER STORY The Energy of Green Purchasing Purchasing plays a pivotal role in leading the green revolution By Robert Menard All Eyes on India 8 Go “Green” Supply chain must deal with political issues like Foreign Direct Investment and a potential Goods & Services Tax By Barry Hochfelder Or Go Home 19 Industry Focus As limited environmental resources...... 25 .. Healthcare Reform: A Wakeup Call to Global Life Sciences Companies By Natalia Kosk Pharmaceutical............................ 23 Hy-Tek Material Handling Inc. Chet Chaffee 32 Industry Voice Supply Chain Final Thoughts Kate Vitasek updates SDCE on the “vested” way By Natalia Kosk This month.” (Above image and issue cover image courtesy Maersk Line)............ 22 Iasset.. 15 4 Supply & Demand Chain Executive December 2012 GT Nexus............
Former Editor. Wisconsin and additional entry offices. PO Box 25542. will leave those who do still have merchandise with limited prospects: send by expensive air freight.S. Anheuser-Busch Andrew K. pay a penalty to retailers for late shipments. Vice President of Audience Development Curt Pordes. President. of course. SUBSCRIPTION POLICY: Individual subscriptions are available without charge in the United States. London. Marketing Gerry Whitty Publisher Jolene Gulley Staff Editor Barry Hochfelder Associate Editor Natalia Kosk Art Director Barbara Pineiro Production Service Representative Suzette Schear Audience Development Manager Angela Kelty Corporate Sales Publisher Jolene Gulley. most complex times of the year for supply chain— things only got more tangled. PO Box 3257. another nasty.com Sales Account Manager Judy Welp. Cygnus Expositions www. how much was lost still is being totaled. direct line +44 (0)1442 288287 Editorial Advisory Board Tim Feemster. Fax: (847) 492-0085 E-mail: ejackson@meritdirect. A s we moved into the holiday season— one of the busiest. Please apply the lessons you learn. or face canceled orders. Author Robert Menard says. WI 53538. June. 1233 Janesville Avenue. ckonopacki@sdcexec. You’ll see it on our Website. Single copies available (prepaid only) $10 each.” As I noted at the top of this column— and you’re well aware—it’s holiday time. Greybeard Advisors Raj Sharma. com.com European Sales Representative. reported that several of his New York-area customers were declaring their warehouses totaled and that the merchandise will be have to be written off as an insurance loss. Chief Executive Officer Paul Bonaiuto. jgulley@sdcexec. The delays can cause losses that will flow through the entire season. John M. The closings and delays. he said. September and December by Cygnus Business Media. welcome to the December Green Awards issue. we do strive to provide a broad range of options that you can apply to your own pursuit of sustainability.com Sales Account Manager Carrie Konopacki. It begins on page eight. Publisher reserves right to reject nonqualified subscribers. Merit Direct LLC (847) 492-1350 Ext. Vice President of Production Operations Rob Brice. Sandy and her ilk just emphasize one fact: The question isn’t will something happen. The most tragic element of Superstorm Barry Hochfelder Editor Supply & Demand Chain Executive Sandy is. funds. Northbrook. of course. Speaking purely from a supply chain perspective.” New York’s port system—including New Jersey—handled $208 billion in cargo last year. North American Director of Supply Planning. drawn on U. Sales Manager benedict@itsluk. devastated the East Coast. ITSL Media Julian Maddocks-Born. read about it in our print issues and hear about it during our Web seminars. The information presented in this edition of Supply & Demand Chain Executive is believed to be a ccurate.com 6 Supply & Demand Chain Executive December 2012 . Senior Vice President. Human Resources Julie Nachtigal.com. Censeo Consulting Group Kate Vitasek. University of Tennessee Center for Executive Education Circulation & Subscriptions PO BOX 3257. In that same Times article. +44 (0)1442 230033 Benedict Hume. Printed in the U. Hill. POSTMASTER: Please send all change of address to Supply & Demand Chain Executive. Diversified Group Gloria Cosby Vice-President. Gregory Daco. Please enjoy the issue and have a safe.S.S.” On the other side is the purchasing reward of reduced costs and increased profits.com Web site: meritdirect. Fort Atkinson. Reese. Material Handing Industry of America Julie Murphree. Grubb & Ellis. “but part is lost forever.” he told the newspaper. Canada Post PM40612608.sdcexec@omeda. Canada and Mexico $49 and $71 for all other countries (payable in U. Hurricane Sandy. On page 26. On one side of the coin sustainability bears the imprint “reduce. IL 60065-3257. Chief Financial Officer Ed Wood. the human loss and devastation. told the New York Times that the region is responsible for about $3 trillion in output—approximately 20 percent of the country’s total gross domestic product.SDCExec. Sandy closed the ports. Fax: 800-543-5055 Email: circ. Return undeliverable Canadian addresses to: Supply & Demand Chain Executive. Board of Governors. Along those lines. ON N6C 6B2. Periodicals postage paid at Fort Atkinson. Cygnus Business Media John French. it’s when will it happen? Risk management is an issue we feel very strongly about at Supply & Demand Chain Executive. Founding Editor. “the very acts of cutting costs and saving money are intrinsic to and integrally inseparable from sustainability. Canada and Mexico to qualified individuals.com.A. Supply & Demand Chain Executive Bob Rudzki. Sales Director julian@ itsluk. ■ bhochfelder@sdcexec. we again cite companies implementing sustainability strategies within their own supply chains and providers of supply chain solutions and services who helped their customers achieve sustainability goals. bank).Executive Memo Tragedy Doesn’t Choose a Season Holiday supply chains must regroup after devastation of Superstorm Sandy By Barry Hochfelder December 2012 • Volume 13 • Issue 4 Executive Vice-President. conserve and preserve. chairman of the Hong Kong Association of Freight Forwarding and Logistics. She’ll explain how traditional supply chain practices must be altered to accommodate the consumer shift to online purchases. Northbrook. we get more specific on page 12 with a discussion of green purchasing and sustainability. Supply & Demand Chain Executive Shekar Natarajan. With this issue. Inc. but not-quite “super storm” piled on a week later. Associate Editor Natalia Kosk takes a look at how retailers are managing their sales as more consumers opt for online shopping vs. CEO. on-site retail shopping. Paul Tsui.com Supply & Demand Chain Executive (USPS #024-012 and ISSN 1548-3142 (print) and ISSN 1948-5654 (online)) is published 4 times a year: March. a senior economist with IHS Global Insight. While not all-encompassing. Senior VP. our fifth annual. IL 60065-3257 847-559-7598. 102 niademarco@wrightsmedia. The publisher cannot assume responsibility for the validity of claims or p erformances of items appearing in editorial presentations or advertisements in the publication. wonderful and green holiday season.com/cygnus Reprint Services Contact Nick Iademarco at Wright’s Media (877) 652-5295 ext. Oneyear subscription to nonqualified individuals: US $33. “Part of what was lost will be delayed. jwelp@sdcexec. 18. Now.com List Rental Elizabeth Jackson.
But perhaps most relevant for this year’s green awards are the sustainable practices that ocean freight companies enforce. who lead the charge to deploy energy-efficient ways in moving cargo long distances while sustaining environmental protection strategies—most significant being the marine atmosphere.-based facilities— this is the air-scrubbing equivalent of a 149-acre forest. Supply & Demand Chain Executive honors those that enforce green practices as a core function of their operations in our annual “Green Supply Chain Awards. Cascades Inc.000 tons over the 20-year lifecycle of energyefficient fixtures it upgraded into two Chattanooga.. And this month. This month. which in 2011 built its 500th forklift. photos.” Recognizing small. numerous global companies continue to amp up their game on “green” to build more sustainable supply chains and mitigate the impact of their business processes on the environment. tighter profit margins and increased market competitiveness paint the picture of today. Tenn. Horizon Lines and Maersk Line.S. initiated its own annual Sustainable Supplier Award to honor its most responsible suppliers. Crown Equipment Co. or removing 137 cars from the road. Not only have global companies increased their sustainability processes in the last few years but many drive green adoption into the supply chains of their key partners as well. mid-size and large enterprises that leveraged green practices and solutions to further drive sustainable improvements in their supply chain. the logistics provider works to reduce greenhouse gas emission by 14. 8 Supply & Demand Chain Executive December 2012 . according to the U.com Go ‘Green’ Or Go Home Service and solutions providers go big to target their environmental footprint and deploy green initiatives across their supply chains By Natalia Kosk and Barry Hochfelder A s limited environmental resources. and reduce carbon emissions and energy costs. improve operator efficiency. we take green to the seas as cargo freight companies bring their A-game to target marine sustainability. is operated by a fuel cell to reduce fossil fuels.This month. Environmental Protection Agency (EPA). this year's fifth annual awards warranted a different theme across the board than in the past. In Kenco’s case. Since 2009. we shine a spotlight on the green efforts of Evergreen Line.
where accepted. the company saved almost 10. analyses of the shipper's individual carbon footprint and scorecards. Maersk Line (Copenhagen. Maersk Line provides ocean transportation services that are consistently eight to 10 percent more energy-efficient than the industry average. containership company Evergreen Line has had an environmental philosophy since day one. Denmark. Horizon Lines Inc.horizonlines. The first carbon neutral company in New Zealand.000 TEU are put into service with enhanced environmental excellence built in. Its S-type “greenships” container ships come built with environmental features that still remain beyond worldwide compliance. These also include vessel management controls. In addition to publishing its own individual vessel performance Maersk supports customers with environmental comparisons for routing options. Maersk’s new Triple E vessels will deliver 50 percent better performance than the vessels on today's already world-class Asia-Europe routes. less developed ports yet still deliver substantially more energy efficiency. the provider worked closely with major shippers and other carriers as part of the Clean Cargo Working Group (CCWG). Starting in 2013. The company’s efforts resulted in an estimated emissions reduction of 231. It also adopts the variable frequency control type motor on the main cooling sea water pump so that the motor speed is automatically controlled by the cooling sea water temperature and central cooling fresh water temperature to enhance the electrical power utilization and save energy.6 percent—with an overall goal to achieve a 25 percent reduction by 2020. The company monitors every aspect of vessel operations to ensure it is exceeding the guidelines required from the nearly 100 worldwide ports and communities into which its vessels sail.000 tons of CO2 over the past six years through its fuel conservation and emissions program.C. This year.com) Founded in 1968. Maersk Line reduced the carbon footprint of containers shipped by 15. implemented by Group Chairman Dr. Horizon Lines reduced overall fleet fuel consumption by 3. The Evergreen L-Type vessel can reduce about 15 percent of CO2 emission rate.com) works with customers to reduce carbon emissions produced by supply chains and to reuse/recycle packaging waste.evergreen-line.. which deploys standardized methods for calculating and reporting the carbon footprint of shipping and provides a protocol for third-party verification of the emissions factors.com) Horizon Lines’ approach emphasizes environmental excellence through conservation techniques.S. It also initiated a program limiting the discharge of any waste into the oceans. To protect the marine environment. Developing markets in Western Africa benefit from Maersk’s WAFMAX vessels. Agility (www. agilitylogistics. N. Agility’s carbon calculator tool allows customers to measure carbon emissions in their supply chains. designed to call on these smaller. YF Chang. December 2012 Supply & Demand Chain Executive 9 . The CO2 footprint per container shipped is 28 percent lower than the industry average for that region. www. Horizon Lines established several programs—including Emissions Horizon Lines and Sustainability Horizon Lines— in addition to the MARPOL and ISM codes created by the International Maritime Organization (IMO). instead sorting its waste to facilitate recycling shore-side. Through the EDGE process. and decreased fuel costs/consumption through implemented video conferencing. Its Goods-in-Transit Center (GIT-C) solution saves more than six percent on cargo weight and CO2 emissions and provides a reduced overall cost with zero impact on shipping schedules. Agility’s environmental awareness campaign educates teams on sustainable in-house best practices such as energy consumption reduction via less used electricity.000 tons of CO2 emissions in 2011 on shipments for a large sportswear company. low sulfur diesel fuel usage and marine terminal pollution mitigation plans. incorporated sustainable warehousing design features.Evergreen Line (www. system upgrades and voluntary compliance.5 percent over the past six years. nor international pollution prevention regulations require vessels to treat accumulated water in the cargo holds before pumping it into the sea. All of Evergreen's 70 new ships under construction are built with consistently upgraded green features. www. waste stream management.com) With a goal to be the environmental leader in shipping. Since 2007. In another case. Horizon Lines voluntarily modified some of its vessels systems to provide for the processing of this water through its oily water separator or an independently installed Oil Content Meter (OCM) prior to discharge into the sea. (Charlotte. Since 2002. Neither U. The L-type new vessels with more than 8.maerskline.
negotiate strategic contracts for customized pricing.H. mx) distribution centers. Pluvial water recovery is implemented in half of Frialsa Frigorificos’ (www. As a third party transportation and logistics provider. to aggregate freight volumes of all sizes to gain better access to capacity. In the case of Western Growers Association (WGA).com) works to improve energy efficiency.inmar. Cascades also rewards its most responsible suppliers with an annual Sustainable Supplier Award. Most recently. Its yard management system enables DSC. the company helped a client convert their fleet of gasoline to natural gas engines for reduced CO2 emissions. 100 percent electronic invoice processing for such package carriers as UPS and FedEx to reduce paper costs and eliminate mailings. and benefit from high volume surge capacity. reduce greenhouse gases and air pollutant emissions and improve energy security through greener freight practices. (www.frialsa. transportation initiatives. Robinson aligned to offer 10 Supply & Demand Chain Executive December 2012 WGA member shippers a unique transportation program to move fresh produce from growing areas to customers all over the country. In 2010.Through the Cascades Recovery division—which manages discarded recyclable materials and uses them to manufacture new products—clients of Cascades Inc.global-4pl. (www. maximize logistics opportunity and minimize carbon emissions. Through its MaxxForce-powered fleet to meet emissions EPA standards. Global 4PL’s (www. (www. (www. the company lowered the motor speed of its tractors by computer control for better fuel mileage. Eolic electricity generation will service 80 percent of Frialsa’s total company demand (22 distribution centers) by the end of 2012.dsclogistics. Robinson Worldwide Inc. Additionally. minimize exhaust emissions and improve air quality. C. Since 2009.com) provides technology solutions to reduce paper transactions for shipping documents. The One Touch Advantage returns program from Inmar (www. Cass Information Systems Inc. implemented at 100 percent of its centers. retailers and carriers to access real-time visibility of shipments across the supply chain for higher efficiency. As a result of sustainable activities so far.cassinfo. Newer facilities have water-absorption wells connected to the sub-soil and incorporate CO2/NH3 refrigeration systems for increased efficiency and less harmful impact on the environment. billing (freight invoices). com) reduces the carbon footprint for all pharmaceutical trading partners through the elimination of redundant touch points. The conversion of their fleet will save tons of CO2 and helps Global 4PL clients to initiate a green supply chain.com) automates the drayage tender and assignment by eliminating manual processes and fostering communications among all transport parties. IAS DispatchManager from International Asset Systems (IAS. In the area of transportation. DSC developed a solutions team to model and collaborate with customers on maximizing networks.com. it works with Cascade Sierra Solutions to help motor carriers reduce fuel consumption and carbon emissions.hermanntds. manufacturers. In addition. com) enhanced sustainability for its customers via network modeling. logistics center improvements and employee education. An overall calculation of recognized savings in 2010 by all participating manufacturers in the program equaled an Initiative Environmental Sustainability Annualized Savings Transportation Carbon Footprint of 136 metric tons of carbon dioxide.interasset. com) offers services that optimize business processes to efficiently use transportation and distribution network resources to ultimately drive costs out. Shipper Gills Onions utilized the program for its LTL capabilities. C.H. www. yard management efficiency. reduced detention and demurrage fees and less labor and fuel costs. the company’s total carbon dioxide equivalent per total square foot released across its nationwide network of logistics centers from January to March 2012 is down 15 percent compared to January to March 2011. The company works directly with growers and retail customers to most efficiently use natural resources and build efficient farm to shelf distribution models. Customers benefited from annual EDI freight invoice percentage averages over 65 percent.chrobinson. payment transactions and information delivery. DSC Logistics initiated corrugate recycling. DSC Logistics (www. Dispatch . Hermann Services Inc. com) green initiatives include reduced CO2 and cost reduction per mile. the company enforces a “no idling” policy for trucks that are parked for loading or unloading in a DSC-managed logistics center to reduce fuel consumption. com) can reduce their supply chain ecological footprint and encourage efforts to reduce the amount of waste sent to the landfill.cascades.
Since 2010.prorizon. www. increased fuel costs and potential driver shortages. At just one port. (the U. logiserve.000 gallons per day to 3. “SYSPRO data contributed to our plating operation’s water usage reduction— from 150.” said Salehi. The Collaborative Distribution supply chain solution from Kane Is Able Inc.com) works with a leading entertainment production company. an ROI of more than 500 percent. Continued on pg. SaaS provider Prorizon Corp. every one percent of import containers that are used for equipment reloads with DispatchManager save 1.productivity improves by 40 percent. Senior Vice President of Columbia Manufacturing praised SYSPRO (www. (www. two of the top 10 ITO's and three of the top 20 global ITO's to reduce electronic equipment waste through a planned end-of-life (EOL) strategy.000 gallons per day—also reducing chrome usage by 93 percent and nickel purchases by 75 percent.000 pounds. reduced annual fuel consumption by almost two million gallons.000 pounds.net) helped develop a diagnostic tool to assist companies to identify. running empty. 14 December 2012 Supply & Demand Chain Executive 11 . which have been instrumental to the establishment of Columbia’s green practices. T-Mobile USA Inc. with evident challenges of capacity. com) ERP software for its material resource planning and forecasting and purchasing. It delivers lower monthly operating costs. (www. Ali Salehi. reduced NOx emissions annually by almost 800.000 hours.t-mobile.kaneisable. LogiServe's involvement in the PSI program enabled 50 mid-to-modestsized companies to identify aggregate annual freight savings of more than $4 million.6 million pounds. reduced Particulate Matter emissions annually by almost 20. wireless operation of Deutsche Telekom AG.S. LogiServe Inc. As part of the Wisconsin Profitable Sustainability Initiative (PSI) team. quantify and prioritize their sustainability opportunities. annually reduced truck miles by 12 million. Industry research points to almost 28 percent of all truck traffic in the U. and reduced labor by 70. improved cost to serve and increased revenues. annual reduced CO2 emissions by 19. error reductions. (www.com) reduces customers supply chain costs by an average of 35 percent.100 tons of CO2.syspro.S.
suppliers are graded with green. Take Wal-Mart. A synonym for these words is savings. L Sustainability facts and myths Distinguishing between fact and myth is critical to creating any bona fide sustainability plan. many practitioners in supply chain disciplines are somewhat suspicious and may not fully appreciate purchasing’s pivotal role in sustainability. The cost savings and gains in sustainability are limited only by our creativity and willingness. But retailers cannot achieve their goals on their own without incorporating the active participation of suppliers. The very acts of cutting costs and saving money are intrinsic to and integrally inseparable from sustainability. it began to manage the inbound freight of its principal suppliers. gasoline and propane all are more efficient than Green purchasing and sustainability: two sides of the same coin At its core. the province of the purchasing profession. In many cases. 12 Supply & Demand Chain Executive December 2012 . for example. On the one side. About 14 times more efficient is coal. Wal-Mart trumpeted its reductions in thousands of tons of GHG reduced worldwide by this action and proclaimed the customer advantage as the reduction in costs that were directly transferred to the customer in the form of lower prices. Recycle (3Rs) ■■ Construction and facilities ■■ Chemical/environmental ■■ Corporate Social Responsibility (CSR) ■■ The green purchasing and sustainability plan Of the principal areas of sustainability. sustainability bears the imprint of reduce. Ironically. wood. To address this. In its public pronouncements. As is the case with the general population. In fact. yellow and red for GHG reduction goals and can be terminated for failure. sustainability is conservation and preservation. it is the savings harvested by purchasing that fund the advertising and public relations campaigns touting an organization’s sustainability gains. A sustainability plan cannot be properly created or implemented without the active participation and leadership of purchasing professionals in these principal areas of sustainability: ■■ Energy and fuels ■■ Reduce.The Energy of Green Purchasing Purchasing plays a pivotal role in leading the green revolution By Robert Menard et’s face it—to be “green” is no longer just an option. On the flip side is the purchasing reward of reduced costs and increased profits. we must be schooled in the sciences and technologies ingrained in the decision-making process. The green revolution is best led by well-educated and trained purchasing professionals who are grounded in good business and economic practices. Oil. But purchasing not only has a principal role to play but a duty to lead in the green revolution. conserve and preserve. confusion and lack of education and training in sustainability leaves many purchasing professionals unable to distinguish between fact and myth. But not enough businesses test and demonstrate processes to see the output of true sustainability before giving up on the whole “green” idea—increasing its cost consumption instead of lessening it to save capital in other growth opportunities. purchasing arguably has the least direct impact on the most publicly visible area of sustainability: CSR. Electricity is the most inefficient of the common nine sources. Although the retail giant had long managed its own inbound and outbound freight. Reuse. Industry giants continue to make sustainability the mandate today that quality was a generation ago. This is particularly true in the Business to Consumer (B2C) industry sectors such as retail. natural gas.
reduce costs and preserve the resources for the quality of life needed for future generations.” December 2012 Supply & Demand Chain Executive 13 . sustainability is an opportunity to lead. What’s worse. the reality is that the all-electric vehicle. these batteries are expensive to replace and often made in countries with deplorable environmental records. The best news in the case of sustainability is that the right thing to do also saves money. Scientific analysis aside. Heat loss (and voltage drop) in transmissions lines and waste heat in transformers are powerful depletion factors in electricity. Recharging stations all use the least efficient fuel source and the vehicle itself weighs more. despite more than a century of development. He is the author of “You're the Buyer—You Negotiate It” and “Green Purchasing and Sustainability. reduce costs and preserve the resources for the quality of life needed for future generations.For the supply chain pro. Additionally. But the science makes for a much worse case for the electric car. ■ Robert Menard is a Dallasbased Certified Purchasing Professional (CPP) and Certified Professional Purchasing Consultant (CPPC) providing training and consulting in purchasing and negotiation for public and private clients globally. For the supply chain pro. Thus. Since we are speaking about automobiles. because of its heavy electric motor and batteries. even confining the comparison to traditional motor fuels. Electricity measured at the point of manufacture is lost in various forms before it reaches its point of usage. sustainability is an opportunity to lead. the sustainability of the electric car is far more of a myth than a fact. electricity is twice as inefficient as any of those. the all-electric car has limited highway mileage ranges and speeds. electricity. has not progressed beyond the super market scooter or golf cart.
novationco. www.com) For more “green” coverage.crown.elemica. T-Mobile has diverted nearly one million cell phones from landfills.cadec.nationalretailsystems.com) AFN LLC (www. T-Mobile installed recycling bins in most of its corporate retail stores in the U.paylode.dclcorp.com) ModusLink Global Solutions Inc.com) Performance Team (www. (www.com) Combe Inc.S.loadafn. (www. (www.com) Paylode Cargo Protection Systems (www.shipxpress.arrowstream.com) Ocean Spray (www.oceanspray.genesissolutions.com) Celestica Inc.com) New York City Housing Authority (NYCHA. (www. (www.procurian.com) DHL Express (of Deutsche Post DHL. (GenesisSolutions.com) Crown Equipment Corp.com) CaseStack Inc. (www.com) Layer Saver LLC (www.celestica. model or carrier). Tyco reduced greenhouse gas emissions by five percent and reduced water consumption by 20 percent. (www. for customers to drop off—free of charge —cell phones (any make. www.kencogroup. (www.com) Vital World environmental program sets and tracks environmental goals using explicit metrics for water consumption.com) Elemica (www.com) DCL (www.com) ArrowStream (www.sourceoneinc.layersaver. turn to page 29 14 Supply & Demand Chain Executive December 2012 .moduslink.com) National Retail Systems Inc.ebuilder.net) Procurian (www.spinnakermgmt. ■ More Green Supply Chain Award Recipients Accellos Inc.forte-industries.com) enVista (www. Tyco Retail Solutions’ (www. accessories and netbooks. (www.com) The McGraw-Hill Companies (www. (www.com) INSIGHT Inc. (NRS.invoicewareint.com) InnerWorkings Inc. www.accellos.vodafone. cell phone batteries.ihs.ryder.tycoretailsolutions.envistacorp.combe.com) Genesis Technology Solutions Inc.com) eBuilder (www.casestack.com) Vodafone (www.com) Quest Resource Management Group (www.inwk.com) IHS (www. (www.dhl-usa.com) Spinnaker Management Group (www.com) Skyworks Solutions Inc.scslogistics. (www.com) Invoiceware International (www.skyworksinc. (www.com) has been bringing customers together to take positive action and help the environment with its handset and accessory recycling program.basware. www.com) Source One Management Services LLC (www. (www. www.com) Saddle Creek Logistics Services (www.com) Ryder System Inc.nyc.com) Container and Pooling Solutions Inc.com) Novation (www.com) Basware Inc.com) Kenco (www.mcgraw-hill.ptgt. By incorporating recycling into its supply chain. waste generation and emissions of all six greenhouse gases covered under the Kyoto Protocol.questrmg. (CAPS. Since the program launched in 2009.gov/nycha) Next Generation Logistics Inc.usecaps.com) FORTE (www.com) ShipXpress Inc.nextgeneration.com) Cadec Global Inc.insightoutsmart.
“There was a lot of uncertainty about FDI.S. Vice President. which could conceivably lead to quality control and supply issues. explained David Frentzel. it can be even more vital. element of business is politics. then in January of 2011. which said the move would destroy small retailers and local shops. And. vehicle December 2012 Supply & Demand Chain Executive 15 photos. The government also says that multi-brand FDI. a GST.) and half of the investment has to be in infrastructure. but a week later it was reversed and there was a lot of uncertainty.” he said. A taxing issue India has a very complex taxing structure. Global Contract Logistics at APL Logistics. but the previous rules did not allow them to sell to walk-in customers. multi-brand [i. Proponents of GST say it will simplify the tax structure while increasing gross domestic product.e. And now: Maybe 2013. which was originally presented in 2009 and scheduled to take effect in April 2010. One long-debated solution is the Goods and Services Tax. Carrefour (France) and Metro (Germany) have stores in India. India certainly has its share. The minimum limit has been set at $100 million (U. also will provide consumers with the best O possible pricing. Some multi-national retailers like Wal-Mart. The most recent advance has been a government flip-flop on FDI. The United Nations Conference on Trade and Developments World Investment Report 2012 expects foreign investments in India to increase by more than 20 percent by the end of 2013. They only could sell to smaller retailers around the country. Ikea and Tesco] retailers can do 51 percent and people can invest in India. The government figured out that they can have an impact on what happens in the world. once by the central government (Central Sales Tax) and then by the respective state governments. Kelkar said. In a recent presentation to the Indian business confederation. Bloomberg quoted Indian economist Vijay Kelkar on the inefficiency of a tax system that required “a truck traveling between Delhi and Chennai to cross five state borders and 10 checkposts. then in April of this year. especially Foreign Direct Investment (FDI) and the continuously proposed-and-stalled Goods & Services Tax (GST). “In December a year ago it was opened to retail brands.” In addition. Wal-Mart. it was decided that the local shops would remain viable because of their personalized services that the huge stores can’t match.” When the government originally set the 51 percent FDI for multibrand retailers a year ago. while bringing money into the country. it had to roll back the regulation almost immediately after protests by opposing parties. such as warehouses and cold-storage chains. In reinstating the issue. Products are typically taxed twice. would eliminate “stamp duty. but sometimes not thoroughly considered. And when it comes to global issues. Now.com . at least 30 percent of the goods to be sold will have to be sourced from local producers.Global Focus All Eyes on India Watching the slowly changing political scene and being ready to act is key to doing global business in the country By Barry Hochfelder ne important. FDI in multi-brand won’t be easy.
” What’s Frentzel’s advice? “Be extremely nimble and flexible.” prior) will pay dividends. warehouses in India are small. Estimates are that India will gain $15 billion a year by implementing the GST because it would promote exports. It can often take several months to get the required permits to open a warehouse. luxury tax. “They’re going up. Opponents of the GST are concerned over control of the system and whether the Central government has the right to enter the state’s right to levy sales tax. Typically. entertainment tax. there also is slow growth as Indian companies move from in-house operations to 3PLs that establish Warehouse Management Systems (WMS). long a problem in India. “It’s based on logistics rather than tax factors and creates a uniform common market across India. but some states are holding back. entry tax. taxes and duties on electricity. purchase tax and all state surcharges and cesses [import or sales tax on a commodity].” APL’s Frentzel explained. they want the states to administer the program. “but execution hasn’t followed as quickly.” Frentzel said.000 square feet. with its requirement of 50 percent of investment in infrastructure (as noted 16 Supply & Demand Chain Executive December 2012 . When it comes to warehouses. often as small as 5.” All of those taxes would be subsumed into the Central GST. all modes— ground to rail to intermodal.” said Frentzel. Finally. “Development of Grade A warehouses still is limited. saying that also is a state right. They want to know who will decide the tax rates and exemptions. There is investment. “The prospect of GST going into effect can be positive. but there is a lot of work to be done. Understand the trade lanes and continue to develop and improve infrastructure. a jack of all trades. is slowly progressing.Global Focus tax. but not all are ‘A’ quality.” ■ A quick look at infrastructure Infrastructure. as well as dividing the tax burden equitably between manufacturing and services.” That’s where adoption of the new FDI. betting and gambling. It’s mostly private investment. Work different transportation options. “The grand plans are there. with both the states and central government receiving equal shares of revenue. taxes on goods and passengers. taxes on lotteries. raise employment and boost growth.
These were massive.Software Update Turn Your Supply Chain to the Cloud As companies continue to shift to the cloud. paid for installation and paid to keep it running. These would only be successful when a large community of users all contributed a low monthly rate and in turn. At one point and time.’ Still. On the one hand. this kind of noise also creates a staggering level of confusion—which explains the barrage of questions I encountered at the event. it was painful that many of those asking—the supply chain professionals who were generally interested in what cloud technology can bring to their company’s operation—still lacked a basic understanding of what cloud computing is. we get access to an electric grid that costs billions to build and maintain. despite quite a bit of very high-profile activity in the market. expensive and complex machines that were the domain of a select few in the early days of electric power. ‘What’s this cloud stuff all about?’ As a technology practitioner who’s been beating the cloud drum for many years. But after a very basic discussion about cloud and what it can mean to the supply chain. Cloud is like an electric utility This is a commonly-used analogy that can support almost any kind of cloud solution. The customer bought the hardware. Not too long ago. fielding this question was both frustrating and rewarding. especially when compared to traditional software. electrical utilities and the notion of shared infrastructure emerged. I found myself repeatedly answering the question.’ That felt like a win.com . Today. Such projects typically December 2012 Supply & Demand Chain Executive 17 photos. reliable source of power. W With technology vendors across the planet collectively touting cloud as the next greatest thing. the only way for a company to get technology was to buy an enterprise software license and then go through a massive implementation process and expense. would have access to a robust. Over time. users must watch for its community access components to unlock its true potential hile in Atlanta for CSCMP’s annual global conference in early October. factories and cities each had their own power plants to generate electricity. it’s safe to say that the average person understands the basic equation of ‘cloud = good. In an effort to clarify what cloud means for the supply chain. The ‘wow’ factor around cloud supply chain is often boosted by industry insiders tapping into familiar ideas and parallels to tell the story. here are a few of those correlations to identify what they mean for you. the prevailing response was an emphatic ‘wow. for a few hundred dollars a month.
Thus. There are many other analogies that help shed light on why cloud is a big deal in the supply chain space. imagine going back to standard definition TV for things like movies and sports. But cloud platforms fill them by sitting above the physical supply chain to create a virtual informational replica of what’s actually happening on the ground. when the status of a shipment changes. around the globe.Software Update ran millions of dollars over budget. This requires that entire trading communities all see and act on the exact same piece of information—a single version of truth. not Outlook. few actually have a technology that takes each small ‘pixel’ of information and creates a true. With cloud. a cloud-based collaboration platform provider. costs and events—all of which are in a state of constant change. but you can’t see the ball or the end zones. The HD picture Visibility is a top priority for most companies. This requires an information model that looks like LinkedIn. . That information is rationalized and linked to related objects. In supply chain. With LinkedIn. we simply go to our profile page to change the information and our entire network gets the news instantly—everybody in the network is on the same page. Silos of information are common. took years to complete and rarely worked as advertised—issues that are still relevant today in some scenarios. They must also look for the community aspect—not just hosted software—that is key to unlocking the primary benefit of cloud. You have TV. Today. but is that really TV? Those ‘black hole’ information gaps are common in the global supply chain. this goes beyond information about organizations and includes dynamic business objects like orders. This is a completely different informationsharing model that’s predicated on a centralized cloud platform. we all had our contact lists in an Outlook address book. inventory. About 15 years ago. This is a domain that is ideally suited for cloud. 18 Supply & Demand Chain Executive December 2012 or functionality. For example. which develops into a utility of sorts. gtnexus. shipments. The cloud platform captures ‘pixels’ from all players and systems across the network. a collaborative HD picture is not. An HD picture is assembled of the supply chain and made available to all stakeholders. supported by virtualized information layer in the cloud. visit www. Typically. take that a step further and imagine big black holes of missing information. The technology is maintained by the vendor. But while many claim to have it. A utility-centric platform brings entire trading communities onto a single. Now. Probably the most important shift in mindset is that many of the benefits are not about software applications LinkedIn versus Outlook In supply chain. Now. The future cloud supply chain Major companies across business sectors continue to make the shift to cloud—especially in the CRM and HR technology spaces—and cloud users must brace themselves for a new era of global commerce efficiency through the emerging cloud supply chain. Evident of this are the major corporations going public with their stories—such as at CSCMP where attendees witnessed Pfizer talking about supply chain segmentation. the traditional software systems were always designed for the single company. the customer gets access to a highly reliable system that is shared with other companies. shared network. Now. If we changed our phone number or email address. it can be nearly impossible to read a sign in the background or make out a number on a uniform. documents. the customer buys a subscription. Maybe you see the football helmet. So as the picture changes. we had to send an email to everyone and hope they each changed the information in their own address book. supply chain technology must be capable of working fluidly and quickly between companies as networks. a few cleats and the stadium. Greg Kefer is Vice President of Corporate Marketing for GT Nexus. While screen shots and slick demos have been seducing buyers for years. think about the pixels that make up your beautiful 1080p screen on the HD TV standing in your living room or hanging on your wall at home. parties and processes. companies interested in moving to the cloud should not only listen to what the early movers are doing and saying. As established big software providers continue to hammer their cloud offerings. one of the biggest challenges is keeping an entire value chain of partners connected and informed about what’s actually happening. rents access to the technology and pays for what they use as they go. In those cases.com. New information models that move data to the center of a network support the creation of virtual replicas of the physical supply chain to give entire networks an HD picture of what’s really happening—at any point in the supply chain with any partner. high definition (HD) picture of what’s happening in their supply chain. the model is inverted. everyone in the network sees that same picture and acts accordingly. For more information. everybody who needs to know gets the news instantly.
In fact.” Besides regulatory pressure. As a result. above 50 percent) of general business concerns of the healthcare industry. also relevant are the current supply chain changes in healthcare that are causing a need for new distribution channels and models. The executive level teams in hospitals— which are usually the clinicians and not always business people—don’t always understand these things and don’t work well in being able to get the ROI. Supply Chain and Contracting. Approximately 33 billion this year alone in patent-protected pharmaceuticals are transitioning to generic with an estimated 26 billion to follow suit next year. according to Scott Szwast.Industry Focus Healthcare Reform: A Wakeup Call to Global Life Sciences Companies Pharmaceutical. service and technology providers in the pharmaceutical. a potential consumer shift in increased healthcare service adoption—in addition to the changing landscape of requested consumer care—would put added pressure on all supply chain elements of the life sciences space. according to the report. under the Patient Protection and Affordable Care Act (PPACA)—signed into law in 2010 with an aim to reduce overall healthcare cost—come 2014 citizens without healthcare coverage will have to pay a penalty (certain provisions. So it’s a challenge to prove to a hospital why you need to use such tools. reform and legislation continue to reign at the top of the list (typically. such changes will only continue as a number of factors— including increased patient safety. UPS. Issues including increased competition. exemptions and clauses pending). Changes are happening now Regulatory compliance (65 percent). In fact.com By Natalia Kosk n many industries. “Some hospitals don’t like to spend money on capital—only on machinery or equipment they need. Director of Marketing. medical device and biotechnology companies must act now to prepare for the changing landscape of life sciences photos. For the life sciences space. which “creates a lot of impetus now for these companies December 2012 Supply & Demand Chain Executive 19 . To prepare.” explained Margie Rivera. in both 2011 and 2012. Florida Hospital Orlando. medical device and biotechnology I space must adapt to new business models and strategy adoption to combat with the changing scale of healthcare. Manager. improved product accountability and changing federal mandates— govern healthcare. increasing regulations beat cost management as the top supply chain issue. consolidation and access to funding such as for technological investments—while equally important—made up a lower percentage of concerns. according to a 2012 “Pain in the (Supply) Chain Survey” report from UPS. “Many hospitals have a capital budget that is already pre-set. They outweigh investing in RFID technology or having an ultrasound machine. transformation overhaul designed to restructure processes for improved longterm benefits and market gain is not uncommon. Healthcare. Cardiovascular Institute.
Supply Chain for TAKE Solutions. By 2020. which houses the Florida Hospital Cardiovascular Institute that conducts nearly 15.” explained Matt Walker. which includes a pediatric hybrid operating room (OR). “Up until fairly recently. interventional cardiology and electrophysiology. “The link that we provide between hospitals and their suppliers is the .Industry Focus to suddenly improve and focus on the supply chain. echoed similar sentiments.S. that’s going to be 40 percent.” Szwast confirmed. “In some ways we don’t really sell an RFID product. will affect healthcare supply chains and the outsourced production model.. “We’ve used technology to help link our customers up with their supply base. Right now. global technology solutions and service providers in the life sciences space also help service providers address such issues as 20 Supply & Demand Chain Executive December 2012 dealing with their commercialized product and moving that around efficiently.” said Endicott.” he explained. the changing shift in healthcare service care consequently creates this added need for traceability and inventory tracking. this issue of serialization requires our customers to be very complete and thorough in the tracking of their product all the way through to consumption of that serialized product by the end user.000 advanced cardiac procedures annually. The increased adoption for more healthcare services on a larger base by consumers also goes hand in hand with improved product security and product protection (prevention of product damage or spoilage)—two areas that have become significantly important most currently than in previous years of the UPS “Pain in the (Supply) Chain Survey. there was not a lot of impetus for supply chain improvement because there was a lot of cash moving in the supply chain because of the cost of the pharmaceuticals.-based WaveMark Inc. which leverages RFID via its smart cabinets and Point of Service (POS) readers. To do so. RFID is an enabler but what we really sell is savings and piece of mind. helping to optimize inventory levels and effectively track product expirations and recalls. Mass. Princeton. N. Executive Vice President. product traceability and streamlined inventory management.” Carola Endicott.” The globalization of the middle class is another factor impacting healthcare.” In the field As mentioned. the majority of U.J. When it comes to healthcare providers. Senior Vice President of Operations and Services for Littleton. The link between While resources such as the Health Information and Publications Network (HIPNet) are available to healthcare and garnering more industry discussion. in 2008 it implemented WaveMark’s clinical inventory management solution (CIMS) to track more than 5. We use RFID to drive the efficiencies and automation. if it continues. Our focus on building the supply chain capabilities of the software and enabling it to be incredibly flexible and able to obtain those cost goals of our customers— that is what is different about WaveMark’s technology. Since then. “We try to be as full service as possible to companies— whether they are conducting clinical activity or are in the process of supply chain intelligence. WaveMark also expanded into the Cardiovascular Operating Room (CVOR). The expansion to the pediatrics OR marks the hospital’s most recent. specialty drugs that are very tailored for specific and very narrowly-defined patient universe make up about 17 percent of the total drug market. as it was completed WaveMark’s smart RFID cabinets deployed in the Florida Hospital Cardiovascular Institute enable efficient inventory management optimization.000 high-value items in the catheterization (Cath) lab and electrophysiology (EP) lab. Such a population shift. Photo courtesy WaveMark Inc. WaveMark’s technology. also was deployed in the Ginsburg Tower. And while most companies surveyed in the report confirmed that they are “cautiously optimistic” (38 percent) on the state of the healthcare industry today. companies (83 percent of those surveyed in the UPS report) plan to invest—over the next three to five years—in global market opportunities with technology adoption as the top strategy. Florida Hospital is one such healthcare facility and service provider that understands the pains of tracking inventory to improve product management and improve its supply chain efficiency.
” Rivera continued. “We have 12 cath labs operating at the same time. increase potential savings capture due to expertise in commodity areas as well as improve supplier relationships and mitigate supplier risk. and monitored. And that’s not feasible—it doesn’t always happen that way. the system reads the inventory in real time to provide a positive read of that inventory on a continuous basis. visit www. Experience With a team of professionals. “A patient can have 10 different vessels with different sizes.com December 2012 Supply & Demand Chain Executive 21 . Inc. Inc. JVKellyGroup has led engagements across a diverse range of industry verticals and worked with virtually every category of indirect spend. industry experience. (such as. VPs of Procurement and Sourcing. ■ For the complete story.jvkg. averaging more than 15 years of hands-on.? Clients benefit from the expertise of years of experience our consultants have in actual sourcing roles including former CPOs. we have to reorder. recall items or management of “just-in-time” items.” said Endicott. So every technician would be responsible for every item that was used on every patient and giving this information to our staff so they can reorder efficiently. the life sciences space will have to adapt and adopt new ways to deliver necessary innovation and proficient patient service to continue driving this industry forward. our projects provide practical solutions and quantifiable benefits. It becomes very difficult to manage. items that healthcare service providers may stock up on in fear of running out based on past experiences). 12. you have to have more than one size. the RFID cabinets provide real-time visibility into items about to expire.” To alleviate this.” said Rivera. which goes live Dec. Industries JVKellyGroup has worked with some of world’s largest organizations across multiple industries including: » Financial Services » Pharmaceuticals » Manufacturing » Automotive » Business Information » Government/Public Sector » Retail CONTACT US TODAY! phone: 631-427-2888 email: info@jvkg. we take the manual process out of inventory and we automate it with these smart cabinets.Industry Focus earlier this year.com web: www. we would have to have two or three more employees and would probably not reorder efficiently.sdcexec. having inventory to cover the extensive scope of the human anatomy also is crucial and adds to the demand of inventory management tracked by personnel. The WaveMark CIMS also enables the user to view all of the data in real time via Web-based reporting. As massive changes continue to occur over the next five to 10 years. to stricter regimes and practices in healthcare settings requiring new strategies to global expansion—there’s no doubt that major upheavals in the life sciences space will continue. JVKellyGroup helps ensure that a company’s spend is effectively analyzed. “Without WaveMark. Why JVKellyGroup. provides cost reduction and risk mitigation solutions for some of the world’s largest organizations.com.” Even more significant for cardiology. Results Through Applied Intelligence® JVKellyGroup. And as we use one. sourced. managed. “What WaveMark does is. sourcing services and technology. “So for every type of item. Our services will help decrease sourcing cycle time.” Initiate best practices before it is too late From changes in drug and medical device manufacturing. Analysts and Sourcing Technology Developers.and out-series of transactions. Buyers. By offering an integrated set of analytics. Add the need for patient safety and improved product accountability to the mix and the result is an industry that continues to grow in excess of six percent per year. “So instead of calculating inventory based on an in.
if a mom-and-pop operation had trouble communicating. Bicknell and his team selected EXTOL’s Business Integrator (EBI) to better manage the company’s transaction load and ensure more efficient. “EXTOL offered the ideal combination of utility and price that caught our attention right away. “We were extremely pleased to work with EXTOL’s professional services group and they made our hard deadline possible. EXTOL takes the wheel In late 2010. we expect to receive all the functionalities the larger providers offer but at a far lower cost. and we will continue to lean on them as we refine and update our software down the road.” said Bicknell.” Accelerating the transition Once EBI was selected in January 2011. The company’s team of three electronic data interchange (EDI) coordinators relies on a transportation management system (TMS) to manage customer data and provide customers with advance shipping notices. automated business processes and integration services supported by EBI.com .” After evaluating several providers. secure communications across its trading partner network. one thing has remained a constant at USA Truck—intelligent collaboration. USA Truck and EXTOL jointly developed a plan to convert all of its 300 EDI trading partners to the new EXTOL software and dispatch system by July 2011. “We are grateful to have worked closely with such a capable expert team.” said Les 22 Supply & Demand Chain Executive December 2012 Bicknell. it could drastically affect or altogether stop transmissions for larger core customers. USA Truck’s IT team sought greater reporting capabilities and visibility into its transaction data. Its team could also connect its various applications and partners through configurable. Its EDI translation software was unable to handle USA Truck’s growth and testing highlighted potential difficulties processing transactions for its network—now at 300 EDI trading partners.” www. As a leading North American dry van truckload carrier and general commodities transporter. Our decision to go with EXTOL was an easy one. EBI’s multi-threading capability enabled USA Truck to communicate with multiple trading partners concurrently and to start processing transactions the moment the transmission completed. USA Truck faced growing customer demand for more sophisticated electronic data interchange (EDI). delivery status updates and invoices.Advertorial USA Truck Drives Enhanced Partner Collaboration Leverages integration tools to process and monitor 300 EDI trading partner transactions D espite the changing nature of both the transportation industry and its corporate structure during the last three decades. accurately and securely.” said Bicknell. In addition. “With our prior software. Manager of Applications Support for USA Truck. USA Truck’s infrastructure could extract transaction data from the TMS and transmit it to customers via EBI throughout the lifecycle of the order. “We understood that any future provider would need to support multithreaded transactions to guarantee customer continuity. USA Truck implements EXTOL’s Business Integrator (EBI) to better manage company’s transactions and 300 EDI trading partners.extol. “With EXTOL. including in-depth reporting and transaction history logs for complete system visibility. USA Truck relies on electronic communication to interchange data with its vast partner network and to process transactions quickly. One EBI was configured EBI with the carrier’s TMS.
com. Founder and Chief Executive Officer of Distribution Central.com solution for more effective supply chain business management. Distribution Central provides IT channel distribution and support services via a complete outsourced services hub and in-depth distribution business model for manufacturers. call (408) 918-3077 or email info@iasset. But new solutions on the market today enable distributors—such as Australia-based Distribution Central Pty Ltd. manual processes that take time away from profit-generating opportunities. By integrating with existing front-office systems. In addition. Unsatisfied with available tools at the time. which created the need to hire more personnel.com.com also helped the company manage its people—to onboard new staff and train sales teams on products.—to become more efficient in ensuring data integrity. Managing Director of Distribution Central. About iasset.Advertorial Iasset Revamps the Distribution Model Distribution Central’s renewal rates jump from 37 to 90 percent with cloud-based partner relationship management solution E roding margins.com Built by the channel for the channel.com. It tracks certifications and compliance automatically and customizes marketing campaigns for resellers quickly. This makes us and our resellers more profitable. renewal process and administrative functions in-house. developed the iasset. Established in 2004.com lets us drill into the database and make our marketing campaigns and messaging more relevant instead of generic.and upsell opportunities and automatically validate and augment your data for accurate BI data with iasset.com is a cloud-based Partner Relationship Management application that helps organizations automate up to 90 percent of their transactional processes.com December 2012 Supply & Demand Chain Executive 23 . resellers and customers. Distribution Central’s renewal business transformed from just another business process into a go-tomarket program. Distribution Central overcame its challenges. This allows companies to regain control of their data and improve data integrity while helping them to scale and proactively manage the product lifecycle for increased profitability. track certification and compliance. which officially launched in 2009 after two years of research & development (R&D). how to increase and maintain renewals and manage assets vital to business growth—distributors worldwide are often faced with these challenges as are their fellow channel organizations. enabling sales staff to make proactive calls based upon strong data integrity. “iasset. it provides access for resellers to manage and grow their own businesses.com freed Distribution Central’s staff from manually managing assets.com was implemented.iasset. To learn more.com provides true asset management for the entire product lifecycle—it’s no longer simply a time-sensitive issue but how you make the most of this information. tracking certifications and compliance while at the same time controlling and reducing transaction costs. Upon deployment of iasset. “iasset. incentives and marketing messages for across-the-board consistency.” said Nick Verykios. www. The iasset. iasset. Increase sales pipelines. iasset. Scott Frew.” he concluded. After iasset. The deployment propelled the company’s renewals rate from 37 percent to 90 percent (holding at 90 percent yearly) and also increased the market share for all of the hub’s manufacturers.com solution provides easy information access —constantly validating and updating data throughout the channel for accurate pipeline forecasting—while increasing customer service and satisfaction. was able to do more with less and experienced company growth as a result. while also keeping its database. iasset.” said Verykios. train sales teams. boost renewals. enhance cross. “We can customize every opportunity. sharing business intelligence with manufacturers and resellers.
the company turned to its trusted partner Columbus.. Ky. installing and testing all material handling equipment. It also worked with TSC to ensure that the retailer’s newest and largest DC came equipped with modern conveyor and sorter technology. “No matter what degree of automation you need. real estate department and general contractor. Ohio-based Hy-Tek Material Handling Inc.Tractor Supply Company Entrusts Hy-Tek with Supply Chain Expansion Hy-Tek provides one-stop-shop partnership to Tractor Supply Company to support its store growth and customer service to locating and purchasing the right equipment at the most desirable prices. procurement. and processes adapted to TSC’s challenging product mix.” To that end. Added material handling features include voice technology to allow for hands-free picking and labeling— a fast. installation.000-square-foot distribution center (DC) in Franklin. In turn. people and technology to produce the best solution for your business. Working shoulder-to-shoulder with TSC’s logistics department. equipment. Mindful of TSC’s e-commerce strategy and the need to individually box and ship consumers’ online orders.000-square-foot space. Currently handled by an outside vendor. Integrated Systems Division. e-commerce is expected to be in-house and operational by early 2013. TSC undertook the Franklin Distribution Center project with an important goal in mind—to house the company’s e-commerce fulfillment capabilities. and accurate approach Tractor Supply Company’s Franklin Distribution Center meets all of its material handling requirements within its 830. TSC tasked Hy-Tek to assist in the design and installation of a new $55 million. safe. the DC would efficiently and effectively store. “Hy-Tek provides distribution and manufacturing facilities with integrated systems that deliver both efficiency and profitability. as well as TSC’s needs and goals. dense storage systems.” said Donnie Johnson. In addition . enabling TSC to handle direct shipments to individual consumers nationwide—controlling service quality and costs in the process. select and ship merchandise to existing and new retail stores in a multi-state region. hen Tractor Supply Company (TSC)—the largest retail farm and ranch store chain in the U. TSC brings e-commerce fulfillment in-house Committed to meeting growing consumer demand. Hy-Tek sourced and managed proven-reliable suppliers to ensure that conveyors. Hy-Tek. Hy-Tek selected and installed pick-and-pack equipment to help get the job done. 830. we employ the optimum balance of processes. and implementation services for all of TSC’s material handling requirements.S. rack and other material handling equipment fit the building structure. Hy-Tek served as systems integrator for the Franklin Distribution 24 Supply & Demand Chain Executive December 2012 W Center to provide custom design. Vice President of Sales.— sought to expand its supply chain. the premier single-source provider of material handling solutions. Hy-Tek also assumed responsibility for delivering.
000 lineal-foot conveyor system Provides 25. however.Advertorial Franklin DC System Snapshot ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ Provides 830. one-stop shop.200 stores now open. Adding approximately 90 to 100 new stores per year. and supports the company’s steady growth. 430 feet long Houses a 700-foot-long sortation system with 35 diverts Houses a 19. today TSC is a leading edge retailer with revenues exceeding $4 billion. Ohio is the premier single-source provider of material handling solutions for an extensive range of industries including manufacturing. and Storage & Handling—deliver cost-effective.000 square feet under one roof Expands TSC’s network capacity by about 30 percent Houses 250 full-time team members Features over 25.000 pallet positions Features 3. shared responsibility for results and a commitment to excellence in design and execution. eliminating the need for supplemental vendors.100 feet of carton flow rail Provides 18. on-time and on-budget. That’s what makes Hy-Tek such a valued partner to Tractor Supply Company.-based Tractor Supply Company is the largest retail farm and ranch store chain in the U. unsurpassed service and fair pricing to its customers. net or (800) 818-6242. As a result. the Franklin Distribution Center acts as a supply point for TSC stores within a 300-to-400-mile radius. “Trust is the primary reason we selected Hy-Tek. Tractor Supply Company.S. Lighting Solutions. experienced.000 vendors represented and up to 12. TSC projects a total of 2. distribution. trust is Formula for success The partnership between TSC and Hy-Tek is a win-win.400 feet of pallet flow rail Provides 560. selected and installed by Hy-Tek). Mobile Equipment. Hy-Tek is a full-service. Hy-Tek will begin installing and implementing a material handling system similar to the Franklin DC in January 2013.. food & beverage (F&B). “In Tractor Supply Company’s experience. Founded in 1938 as a mail order catalog business offering tractor parts to America’s family farmers.hy-tek. Tenn. With nearly 1.S. depth and support capabilities that TSC needs. helps balance the workload among TSC distribution centers in six other states. and safeguard customers’ loyalty and business. Contact www. the success of a project like our Franklin DC depends heavily on implementation. electronics and automotive.” With more than 1.” On deck for TSC & Hy-Tek is a new distribution center in Macon.” said Tom Guschke. “In a project of this magnitude. The retail chain attributes the success of its partnership with HyTek to mutual trust and respect. thanks to Hy-Tek’s proven record of successful integration and implementation.000 items in stock.150 retail stores in 45 states and employs more than 17. retail. control costs.500-square-foot induction/sortation platform Houses a 20.000 team members. It is critical to use an integrator with the experience. Hy-Tek always delivers as promised.” said Guschke. TSC is focused on efficiently expanding its supply chain capacity to support retail store growth. pharmaceutical. Thanks to a particularly quiet conveyor system. Slated to be operational by summer 2013. Its four divisions— Integrated Systems. skills and capabilities necessary to deliver Hy-Tek Material Handling Inc.. based in Columbus. Logistics Engineering. The company operates over 1. to order fulfillment. Hy-Tek does it all. Georgia. The end result TSC’s Franklin Distribution Center—just one of several projects that TSC entrusted to Hy-Tek since 2008—now provides warehouse space and distribution capacity for up to 300 stores. Brentwood. Director.300 bin shelving locations Two four-level picking modules. maintain appropriate stock levels. the Franklin DC is set up to service its stores quickly and effectively. sorter noise is greatly reduced.000 Easy Slotter location dividers all-important. efficient solutions for every material handling application. similar to its other crosscountry DC’s. December 2012 Supply & Demand Chain Executive 25 . the Macon DC will further enhance Tractor Supply Company’s ability to deliver quality merchandise. Hy-Tek has the breadth. (sourced. “There are a lot of integration companies in the U. Team members can actually converse while standing under the sorter—impossible at older distribution centers.100 stores will be operational within the next 10 years.
The driving force of ecommerce continues to revamp the retail space. an exclusive online retailer or a combination of the two. Tompkins International. As a result. we can’t eliminate the last minute shoppers who get to enjoy bumping into fellow consumers at the checkout line days before Christmas. what consumers need to be prepared for in the coming years.Market Segments Unwrap the Savings in Retail Holiday season or not. is they’ve gone out after several large companies that service the aftermarket parts—things like air conditioners. James A. on Black Friday with the other brave souls outside of Best Buy. and meeting consumer demand on both products and services. About 48 percent of consumers use their mobile device to do a price comparison on an item from inside a store.” said Dr. “And that is very dangerous because many of the companies make the majority of their money on the aftermarket service—not on selling the original unit. retail comes down to two things: profit for global businesses. and how businesses and supply chain service providers must compete in order to stay in the game. at the end of the day. or added items into your virtual shopping cart over a cup of Joe on Cyber Monday. hot water heaters and furnaces. you probably will have completed your holiday shopping— whether you stood in line at 4 a. Such developments come as no surprise when 82 percent of consumers across the country agree that mobile shopping is the way to go—whether via tablets. Amazon. according to the API platform provider. 40 percent also using a mobile device to find a retail store. is the increasing number of online retailers who do bring different service to market.com Inc. Most recently. We felt the impact when such retail giants as Borders and certain Best Buy and Staples locations closed their doors 26 Supply & Demand Chain Executive December 2012 across the country in recent years. Today’s digitally-empowered consumer continues to drive retail business models from traditional brick-and-mortar stores to an omnichannel marketplace. which now enables visitors to “follow” brands. according to Apigee Corp.m. product type and any items sold via eBay. Tompkins. mobile apps or computer. made its move into the B2B marketplace with the debut of AmazonSupply. Founder and Chief Executive Officer. this month we’re giving you the exclusive on the conditions and trends that are changing the retail industry. instead of traditional online retail photos. The B2B sector has to be aware that this is a huge potential impact on them and on distributors. “What AmazonSupply has done. And how retailers address such factors continues to change due to a generation of new consumers. Then again. Earlier this year. Additionally. Whatever the case. But perhaps even more indicative of the mobile demand putting pressures on retailers. Raleigh. sellers compete to bid for the customer. N.C. everybody wants a piece of the retail action By Natalia Kosk B y the time you read this. From your local store to the Web Whether you’re a brick-and-mortar store. eBay delivered a major platform redesign to provide consumers added features for online shopping— the biggest of which impacted its homepage. traditional brick-and-mortar retailers and additional key supply chain providers must bring to market new strategies and services to remain in the game.” In the case of Yumani.com . And as the new Website is designed to provide customers with competitive prices on a wide selection of products in business and industrial categories— from drill bits to polyimide tubing— it also has a major impact on distributors.
780 Miles • 50.28 • Oxides of Nitrogen by 20. in store and at omnichannel. Manufacturing will go up.965 gallons of Diesel Fuel Gary A.’ That is the key.900 metric tonnes of CO2 • 305. Office: 414.net LogiServe Inc. Yumani will increase business.780 • Diesel Fuel Consumption by 50.S.000 Deciding factors In preparation for pre. the move to omnichannel was largely compounded by the fact that certain consumers preferred different channels—many of which had different preferences for shopping and different preferences for buying. “My idea was to provide them both with a win-win situation.4 million in Savings • $9. But while the increase in e-retail spending makes up a large part of the increasing shift in retail. E-Mail: firstname.lastname@example.org lbs.” said Tompkins. diesel fuel and man-hours. Founder of Yumani.000 items available in the Yumani database. Mobile: 414.7 tons of Particulate Matter • 0. Including LogiServe to address logistics paid significant dividends. WI 53226 December 2012 Supply & Demand Chain Executive 27 . “The platform is not only for the consumer but also for the seller. As a result.0 million in increased or retained Sales • $10. consumers can post an item they want to buy and then recruit others interested in the same item to buy with you—adding to its value. In fact.Market Segments platforms.777. up 45 percent from $226 billion this year and 62 percent from $202 billion in 2011. Brick and mortars have to figure out ‘how do I make my brick and mortar an asset with my multi-channels to allow me to gain market share.4 million in in Total Economic Impact to the State of Wisconsin Key Annual Environmental Reductions: • 8. But they have to be great at all three aspects— online. “And 76 percent of those actually request an item.” explained Michael O’Hara. And this is only the beginning. the platform differentiates in the marketplace because it does allow sellers to compete to match for a consumer’s purchase. “The mistake companies make is they think that the objective is to be really good at omnichannel. sellers work to deliver the lowest price on an item to provide the closest match that a consumer can pay. That is another extraordinarily high conversion metric. Focus on Energy (smaller energy projects). Logistics Annual Financial Contributions: • Aggregate Investment = $295. affecting their supply chains. according to Forrester Research Inc.” supply chain enablers and key partners as well.200 lbs. 10. they want sameday shipment and generally free shipping—the latter of which often times proves beneficial to retailers as shoppers spend an average of 30 percent more when free shipping is Logistics Role in the State of Wisconsin’s: Profitable Sustainability Initiative In 2010. The team was led by WMEP (Wisconsin Manufacturing Extension Partnership) addressing the manufacturing aspects and consisted of SCS BT Squared (environment and larger energy).965 gallons • CO2 Emissions by 11. • Particulate Matter by 510 lbs. Glisch The Profitable Sustainability Initiative is expected to render a 25 to 1 ROI to the State of Wisconsin.385 lbs. 2360 N. Milwaukee. Jobs will go up.” Designed to benefit both consumers and sellers. The team developed a process to conduct the analysis for each company in 3-steps: • Diagnostic – Identify & prioritize the opportunities • Assessment – Complete detailed analysis to determine cost / benefit • Implementation – Implement the appropriate projects Annual Financial Benefits (from 67 participating firms): • $6.and post-holiday season.” Tompkins continued. We worry about the customer getting the right price and we worry about the seller who should not have to spend so much money and pay fees they shouldn’t have to.Suite 203.5742. Chief Executive Officer. 124th Street .” said Henry Zilberman. Oxides of Nitrogen and Particulate Matter. the price of an item actually goes down. businesses must understand that a one-size-fitsall approach to bring goods to market does not work. Adding more to the allencompassing omnichannel are the requirements consumers place on their retailers.3 million kilowatt hours • 16.8 percent of all unique traffic registered. the company already met its January 2013 goal. such findings serve as an important wake-up call not just to retailers across the company. of Solid Waste • 4. along with meaningful reductions in miles. Via a Yunite group. a major contributor to reducing CO2.985 • Average ROI = 3 to 1 • Average Payback Years = . Customers no longer solely rely on five-business-day shipping standards. With nearly 400. will spend $327 billion in 2016. Yumani.418. Logistics accounted for almost 20% of the savings.935 • Aggregated Savings = $983. Baker-Tilly (financial and assisted with the calculations) and LogiServe (logistics). Now. • Man-Hours by 4. “We can’t just view online retail versus in store. but their Logistics Annual Environmental Reductions: • Truck Miles by 305. the State of Wisconsin commissioned a group of companies to study profitable sustainability in 67-modest size companies.6316 Continuous Logistics Improvement Program. Online shoppers in the U. Launched this past October. “Of all of our visitors to the Website.4 million therms of Natural Gas • 4.
shipments under five pounds—the sweet spot of the postal service—and the growth part of the business. “Retailers looking at the omnichannel customer recognize that they have to control their delivery channels. . In return. And that is why you see some of the larger companies growing their volume with the postal service. “ShipStation has taken our technology and integrated it into their great user experience. ShipStation has five different levels of plans—all of which come with a free DYMO Endicia account to provide a value-add for current and up-and-coming online business owners. ■ For the complete story. So in the last year. And Web-based shipping service provider ShipStation helps such business owners realize the better options that are available to handle small or batch shipping orders for 28 Supply & Demand Chain Executive December 2012 Actions speak out In order to control the factors that affect the changing landscape of retail.sdcexec. “As ecommerce goes up 45 percent in the next four years. Invata Intralogistics.or five-year plan no longer works as customers continue to drive changes in the commerce space.Market Segments available. customers want their purchased items sooner rather than later. “It’s very smart marketing and we’re starting to see that from some of the big boys out there like Amazon. which offers postage and shipping solutions for online sellers and warehouse shippers.” confirmed Curtis Mitchell. DYMO Endicia.400 online retail stores. visit www. consumer demand will continue to drive the changing landscape of retail. becomes the United States Postal Service (USPS) expert for ShipStation. And the average small-to medium-sized business owner who is trying to sell products on the Internet—they are feeling the pressure from the free shipping and are feeling like they need to do something to compete as well. the postal service shipping business actually gained market share points against the private carriers. but they pass that rate to the shippers. The startup—just over one year old—services over 2. Wal-Mart and Sears. Added services Consequently. In addition. Chief Marketing Officer. processes an average of $1 million shipping labels per month and cuts online customers’ shipping time anywhere from one half to one third. which goes live Dec. General Manager and Co-founder. the competitiveness in the retail space is putting pressures on those retailers to provide efficient shipping services as. “The e-commerce part of the business and the e-shipping—that is the growing part of the postal service business.” confirmed Khechfe. the retailer must have clear visibility within their supply and demand chain. the retail industry must bring to market new strategies and services and act now to survive. Holiday season or not. taking care of the logistics so ShipStation can focus on their core product and customer base. In addition.” said Mitchell. And because of that. it will take more than automation for all retailer and supply chain players to understand and prepare for the changing multi-channel commerce landscape.com.” said Amine Khechfe. And not only that. again. “We make it easy to work with the postal service and integrate that technology into what you do and they make it easy to integrate into all of these order management systems. Today’s always-connected consumer wants their information yesterday. the postal service is putting a lot of money and effort around improved tracking and shipping which is really where the Endicia growth story is: focused on B2C.” a price that won’t necessarily cause huge financial strain on the company.” said Rick Hernandez. the postal service will take a big chunk of that.” Despite nationwide reports of eliminated USPS jobs and many businesses questioning the existence of the service provider five years from now.” said Reader. they want the innovation of the future. ShipStation. The postal service is less expensive than all the other carriers because they already deliver to each household. DYMO Endicia. Instead. the growth of ecommerce validates the postal service company’s position in the market. Director of Business Development. a retailer’s three. The opportunity is pretty significant. It’s getting to the point where some of these small-tomedium-size business owners are trying to increase the price to offer the best rate that they can so they can offer the free shipping without it having too much of an impact on their product price. “Free shipping is where it is headed. all of these online shopping carts— they basically allow you to connect the postal service to the ecommerce solution that an online professional seller needs. To do that. “They are building and operating new distribution channels themselves in order to make sure that the customer experience—from research and info on the Web to order entry to delivery and receipt of a package by the customer— is consistent across both brick-andmortar and ecommerce and that they have control of that channel. 12. Senior Manager of Business Development for DYMO Endicia. according to Kevin Reader. As a result.
Those metrics need to be examined more closely as well. The metrics used to determine the environmental impacts of supply chains include water use. In doing so. Companies need to look holistically at the supply chain to balance any trade-offs that will have to be made. Because of these factors. executives must be able to analyze the entire value chain of a product or service in terms of cost and environmental impact. companies need to be aware of various reporting requirements. no green initiative will succeed unless it has a proven value such as better economics for the December 2012 Supply & Demand Chain Executive 29 Sustainable actions Identifying. energy use. What’s important is to evaluate the metrics. Successful companies often find incremental solutions that gradually improve environmental performance while minimizing burden in other areas. government and industry are strongly urging the issue. it may adversely impact another. lower carbon footprints can improve corporate brands. Ultimately. they can make certain that various components in that chain interact in ways that benefit the whole system. Monitoring and reducing carbon footprints also makes good business sense. In addition. To fully understand the trade-offs inherent in their choices. evaluate and optimize their supply chain operations in order to reduce their carbon footprint. optimized supply chains with smaller carbon footprints are more efficient. photos. waste that is produced and emissions. electricity and water consumption and then correcting those inefficiencies to help eliminate waste and reduce costs. not the exception when it comes to supply chain operations optimization—throughout a supply chain is critical to ensuring overall success. There’s no question that companies must assess. In addition. and companies can gain an advantage over competitors by providing comprehensive emissions information. with the primary goal of detecting inefficiencies in fuel. it also can help companies choose more efficient business partners and better mitigate risks caused by sudden changes in energy and fuel prices. it’s important for executives to be mindful that when improving one benchmark. For example. And there’s no denying that today’s customers like green business. Not only does it help eliminate waste and reduce costs internally. During supply chain optimization efforts. Chet Chaffee nderstanding the environmental impacts across your organization’s supply chain is imperative. tracking and managing supply chain emissions is essential to optimization efforts. careful analysis of all trade-offs—which U . Additionally. determine ideal baselines and then optimize those areas that align best with goals and requirements while holding all the others as close to the baselines as possible.Blazing the Trail of Sustainability Accept trade-offs in order to optimize supply chain strategies often are the norm. less costly and less likely to experience sudden changes in energy and fuel prices.com By Dr. identify opportunities for improvement and reducing costs. ‘is any of the energy used renewable? Are the emissions toxic? Is waste recyclable or is it hazardous?’ It isn’t likely that companies will be able to create a list of all the metrics and then check them all off. In fact.
Irvine. environmental and social sustainability. allows the FTC to take “enforcement action” against deceptive claims. environmental and social developments. network design. and is a key platform for communicating positive and negative sustainability impacts—including trade-offs.S. Life Cycle Assessment at FirstCarbon Solutions. the future of public reporting will have an even greater focus on transparency. companies can strike the right balance as they optimize supply chain operations and reduce their supply chain’s environmental footprint. Ultimately. The Dow Jones Sustainability Index defines CSR as a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic. determine the best supply chain measures that meet their specific requirements and strategic goals and then analyze and compare those measures to understand if—and where—any tradeoffs might occur. Companies often can rely on internal management controls to assess and document their supply chain optimization efforts and better understand the trade-offs they make. optimization and planning systems— which incorporate environmental footprint considerations—executives can both incorporate environmental practices within their supply chain. The Federal Trade Commission (FTC) in October released its revised “Green Guides. ■ Dr.” a set of guidelines meant to help and remind marketers and advertisers who make claims that are “truthful and non-deceptive. House of Representatives. For example. and a marketing advantage for the products and services. the U. Chet Chaffee is Vice President. Through lifecycle assessments that leverage what-if scenarios and modeling and risk/opportunity matrices. social and governance performance and organization’s ability to maintain that performance.S. External controls—such as the reporting requirements from government entities and industry— do not often require companies to delineate the trade-offs made as they work to reduce their environmental footprints. Calif. they describe the types of environmental claims the FTC may or may not find deceptive under Section 5 of the FTC Act. Industry initiatives also provide companies with a platform on which to devise and build their greenhouse gas emissions reporting initiatives. The continued push for corporate social responsibility (CSR) reporting is one such indicator. If a company then violates these orders. which can lead to Commission orders prohibiting deceptive advertising. the Global Reporting Initiative (GRI) provides companies and organizations with a comprehensive sustainabilityreporting framework aimed at promoting economic.” While the guides aren’t technically regulations. measure performance and manage change. Green initiatives that work In its continuing effort to keep the marketers of “green” products honest. helps organizations set goals.company. By adopting cutting-edge tools and services to help better understand a companies’ environmental challenges and opportunities. Environmental Protection Agency and the Federal Trade Commission. sustainable practices into supply chain operations? How can we assess the trade-offs between sustainability and cost control? And how do we value long-term sustainability in the same equations as growth and profitability? And it has created marketing opportunities to communicate objectives and accomplishments for the company as well as products and services. Additionally. no green initiative will succeed unless it has a proven value. while at the same time provide people with a transparent view of their entire supply chain. By utilizing the latest in lifecycle assessment services. The Act 30 Supply & Demand Chain Executive December 2012 Deploy the steps today What’s critical is that companies . With over 50 technical papers to his credit. It has raised questions that many executives now are trying to answer: How will we incorporate green. improved benefits to the customer. environmental. it would be subject to fines. The GRI’s sustainability reporting framework looks more broadly at an organization’s economic. Establishing a sustainability reporting process. executives can indeed adapt to the inevitable trade-offs while still achieving environmental and financial success together. Companies today can and should be a force for good—blazing the trail on how to care for the environment. As former executive vice president at Scientific Certification Systems. Home Depot and Unilever. he directed over 200 lifecycle and sustainability initiatives for General Motors. The heightened public awareness of the relationship between business and the environment in recent years has a direct impact on supply chain management and creates opportunities for companies. Chaffee provided expert testimony before the U. according to the GRI.
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Every arrangement brings its own unique culture and needs to the table. I am most excited about taking the concept from research into practice by helping companies establish their own Vested agreements. A company that is simply buying a pure commodity where there is not potential to create value should use a transaction-based business model. Right now. the light bulb goes on in the room—they come to an uncomfortable realization that ‘yeah we are guilty of several of those things. in the press and in company board rooms. courseware (both in-class and online).” which will be published next year. University of Tennessee. UT’s programs. “Vested Outsourcing: Five Rules That Will Transform Outsourcing. It’s not a ‘snap-your-finger and voila!’ process. Adopting a Vested mindset in a serious way requires time and a top-down commitment to changing old mindsets. While I love the writing. they will leave a first meeting with an understanding that collaborating to share and create value works—no matter the size of the enterprise. too little or ignoring the results of the fancy (and expensive) metrics put in play. The University of Tennessee’s Center for Executive Education has a comprehensive set of publications. McDonald's and Microsoft are Redefining Winning in Business Relationships” describes the actual processes each of these companies went through in applying the vested outsourcing concept and the details of their success as a result of that. At some point. resources and tools that educate. Every relationship is different. Deciding to shift to a Vested relationship depends greatly on two factors: ‘Is there a need and potential to create value and drive innovation?’ The other factor is the level of dependency that is required in the relationship (for example. what is the key takeaway they walk away with at the end of the day? KV: Simply put. Vested is more than a methodology—it is really a growing business movement that is gaining adoption in many industries. industry conferences. enlighten and provide insight into the Vested process. visit http://bit. programs. A company hears about Vested and wonders whether it’s right for them. The concepts of win-win. Center for Executive Education. Faculty. And we are deep into a fifth book project—Getting to We—which also will be published in 2013. ■ . I often say the Vested business model— which in a nutshell buys outcomes rather than paying for transactions— is not necessarily suited for every outsourcing arrangement. but worth it. (For more details on the Kate Vitasek. In working with them. And major corporations continue to utilize the Vested model. SDCE: Once a company(s) decides that they want to apply the ‘Vested’ model to how they operate their business. getting to we and transforming the way businesses work with each other are at the heart of what’s next—and the Vested business model is transforming how companies and their providers work together. we are revising and updating the second edition of the first Vested book.’ Understanding the problems in the relationship is the first step to resolving them—they begin to see the value of working together to get to the win-win. “Vested: How P&G.ly/ VRscjy. I love developing and nurturing Vested and spreading the Vested mindset. Actually it’s hard work. To me. the high cost of switching suppliers). what’s the next step? KV: There’s no set time period or dollar amount that creates a Vested partnership.professional development Final Thoughts By Natalia Kosk SDCE: When a company first comes to you—or to the University of Tennessee’s Center for Education—to learn more about vested outsourcing.) SDCE: Your most recent book is the fourth in your ‘Vested’ series. workshops. I usually start by describing the 10 ailments that can plague outsourcing relationships and even destroy a promising partnership before it has a chance to develop. both in UT classrooms. SDCE: Your latest publication. These ailments run the gamut from micromanaging the relationship to measuring too much. did the question of ‘will the vested concept apply to all the services and processes I outsource’ ever come up? And if so. how was that company able to overcome such questions and other challenges with this business model? 32 Supply & Demand Chain Executive December 2012 Kate Vitasek gives SDCE the “vested” update KV: That’s a great question and one that occurs with some frequency. What’s next? KV: We are constantly busy refining our research in areas that support the Vested approach and its principles.
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