James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP?s Supply Chain Quarterly and a staff writer for DC Velocity.
If you've ever wished you could make a few minor adjustments to the software you use, you'll appreciate Stuart Koehler's position. Koehler is the operations manager for First Supply LLC, a Madison,Wis.-based plumbing, heating, and kitchen supply wholesaler that uses Infor's warehouse management system in its distribution operations. Though the software does what it's designed to do, Koehler nonetheless wanted to have a modification made.What he hoped to address was a limitation in the software's label-printing capability—the system was unable to include as much product information as First Supply wanted on the labels it generated.
In the overall scheme of things, that was a minor concern. Still, it was something Koehler wanted to pursue. Although he could have gone directly to the vendor to have the modification made, Koehler chose a different route: He took the matter up with his software user group.
If that strikes you as a roundabout way to solve a software problem, you're probably not a member of a software user group. User groups—organizations made up of customers of a particular software supplier—have come a long way from their origins as forums for sharing war stories and swapping tips. These days, they're also an important communication channel between the users and the vendor. And in many cases, the groups have a great deal of influence on product development.
In fact, Koehler says that recommending upgrades and enhancements is one of his user group's main functions. "We come up with a 'top five' list of things we'd like to see improved," he explains. The group then presents its list to Infor, which oftentimes follows through and makes those changes.
That's exactly what happened in Koehler's case. The group recommended that the vendor modify the software's label-printing function. And sure enough, when Infor designed the next version of its warehousing system, it expanded the label's product information field.
Feedback from the front lines
Though they saw their heyday in the '80s, software user groups are still going strong today. They've undergone some changes in the intervening years, however. Nowadays, for example, user groups draw their members from all areas of the organization, not just from information technology (IT). Members may include warehouse managers, logistics managers, and operations managers like Koehler, as well as IT specialists, chief information officers, and even CEOs.
In the supply chain arena, user groups come in two types: "independent" groups that are run by members and have a loose affiliation with the vendor, and "dependent" groups that are formed by a software vendor that also provides financial support for the group.
Members of independent user groups tend to be customers of the big enterprise resource planning (ERP) software vendors, whose worldwide customer bases are large enough to support and sustain these groups. One such group is the Americas' SAP Users Group (ASUG). Formed in 1990, ASUG currently has 1,700 member companies and 50,000 individual members. It has 46 subgroups, called "influence councils," that focus on specific applications like warehouse management systems, advance planning and optimization systems, and supply chain execution systems.
ASUG uses its "collective voice" to make recommendations on ways in which SAP can change its products and services to meet customer requirements, explains ASUG President Rod Masney. He notes that the group's influence with the vendor has expanded over the years. "What's interesting is that 10 years ago, influence was at the operational level," Masney says. "Today, the user group influences the strategic level [of SAP]."
Another big independent group is the Oracle Applications User Group (OAUG), which counts about 2,000 companies among its members. This global organization has more than 100 subgroups, some of which deal strictly with supply chain applications. "OAUG is the voice of users that Oracle listens to," says Basheer Khan, president of systems integrator Innowave Technology and a member of OAUG's board of directors.
Members of dependent user groups, by contrast, are usually customers of best-of-breed software makers, which serve as the groups' sponsors. Supply chain planning and execution software specialist Manhattan Associates, for example, actively solicits members for its user groups from its customer base. Manhattan says that about 1,000 of its customers participate in 15 "product councils," which are organized around specific applications. "The councils get together at least once a year for a face-to-face meeting, and they do regular teleconferencing," says Manhattan's Eddie Capel, senior vice president of product management and customer relations. "We ask for participation in the design phase for the next release of a product. They get to vote on the features and functionality of the product."
HK Systems also invites user groups to suggest software modifications. Most of these groups meet on an ad hoc basis and hold frequent telephone conference calls. "A lot of our functionality is based on customer direction," says Dave Adams, vice president of product development. For instance, when the company upgraded its warehouse management system three years ago, it worked with a user group to improve the advance shipment notice (ASN) functionality in that release.
Other vendors organize conferences for their customers. For instance, AL Systems holds seminars several times a year that feature user presentations and small-group discussions. HighJump Software has been holding annual user conferences since 1988. These conferences provide another avenue for communication between vendor and user."We encourage regular feedback from the 'front lines' to ensure our products fit most effectively with the clients' requirements," says Chad Collins, HighJump's vice president of global strategy.
A little help from their friends
The benefits for vendors are obvious, but why do logistics professionals take time out from their busy schedules to attend user group meetings or take part in conference calls? It turns out that they see a host of advantages in joining these groups.
Ellen Martin, a vice president of supply chain business systems at Greensboro, N.C.-based apparel maker VF Corp., says she likes the fact that user groups offer a way for companies to ensure that software evolves along with users' changing needs. "When you buy a piece of software, it is what it is," says Martin, who serves on the board of directors for i2's user group. "Business conditions change, and software must change to be responsive. The user group gives you a manner in which you can work for change."
Influencing the development of new features, moreover, can save shippers a bundle: If a desired enhancement is included in the next version of an application, then users can get it for the cost of the upgrade—and that beats the cost of customization any day. "We get something we see as a needed change," says Koehler of First Supply, "but we don't get charged a modification price for the change."
But logistics professionals see user groups as more than just a way to get the vendor's ear. For many, the primary draw is the opportunity to meet and learn from their fellow users. "If you're having a problem, you get a chance to collaborate with others on it," explains software consultant Phil Obal, who helped start a user group several years ago.
User groups aren't just for advanced "power users," however. Users at all levels can benefit from participation. "User groups are especially beneficial for companies that are experiencing the initial startup with an application," says Greg Vandergriff, a DC manager for Beauty Brands in Kansas City, Mo., who helped his software vendor launch a user group. In fact, when it comes to instruction, many find that the best tutors are their fellow users. "You're able to get more good information and more utility by being able to exchange notes with other people using the system," says J. Kevin Michel, manager of logistics operations at Cowan Logistics in Aberdeen, Md., who has participated in three user groups.
But for many participants, the relationship building facilitated by software user groups is the most important benefit of all. In a recent survey of DC VELOCITY readers, fully half of the respondents cited the opportunity to exchange knowledge and network with their peers as their primary reason for joining a user group (see the accompanying sidebar).
"It's a way to make friends," says Obal. "You build a relationship. You become a resource for them, and they become a resource for you."
software users like to talk shop
It's not just about the technical details. The chance to share knowledge and network with fellow software users is what motivates many DC VELOCITY readers to join software user groups.
And join they do. Forty-two percent of the survey takers (which included manufacturers, distributors, retailers, and service providers) said they take part in vendor-sponsored user groups, while 36 percent belong to independent organizations. Another 22 percent participate in both types of groups. When asked which vendors' groups they had joined, the respondents listed a number of suppliers, but the most common responses were SAP (25 percent), Oracle (14 percent), and Manhattan Associates (11 percent).
Though many said they had joined a user group for the chance to talk shop (see chart), a sizable percentage of the respondents said they had signed on in hopes of influencing software development. And it appears that they've achieved some success in that regard. The vast majority (94 percent) of survey respondents said that input from their user groups had led vendors to make refinements to their software. One respondent, for example, reported that his group had persuaded its vendor to enhance its system so that it could automatically calculate freight charges when an order was entered. Another said he and his fellow group members had convinced the software maker to add a feature that determined whether orders should be shipped as individual pieces or grouped together.
social networking
Why do logistics professionals join user groups? Half of the respondents to a recent survey said it was for the chance to exchange information and network with their peers.
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."