The Defense Department, an institution that once issued an eight-page specification for doughnuts, is now buying the technology for its advanced cargo tracking system off the shelf. It's even offering to share what it learns with the rest of the logistics world.
It used to be that when the U.S. military needed something— a fighter plane, a satellite or a radar system—it commissioned its own.With an almost limitless budget (particularly in the Cold War days) and an apparent disdain for commercial technology, the Pentagon just researched and developed whatever it wanted from scratch. And for a while it worked: While the commercial sector was still figuring out how to put cargo in handy metal containers, the U.S. Army was moving all the props needed for a whole wartime theater of operations across the Pacific. And while everybody else dithered over the best bar code to use (Interleaved 2 of 5 Codabar), the Department of Defense (DOD) in 1981 simply went ahead and adopted a single standard (Code 39), revolutionizing the commercial viability of that technology for keeping track of inventory.
More recently, the Defense Department has begun installing and using an international system of active radio-frequency identification (RFID) tags and readers, designed to track every pallet and container of DOD equipment and material moving around the world—a "total asset visibility" system, or TAV. But this time, it's not using proprietary technology; it's using equipment and software bought wholesale from a commercial vendor: Savi Technology of Sunnyvale, Calif.
This is apparently the way of the future. Gone are the days when exciting new technologies emerged from the secret machinations of the government's defense industry—when NASA's need to shield its equipment from high temperatures encountered in space exploration produced Teflon, for example. Today, if the U.S. military can buy off the shelf, it will. The various branches of the military —Army, Marines, Navy and Air Force—now all employ full-time scouts who keep an eye on the new logistics technologies being developed by private and publicly held companies, and they're constantly observing best practices at large commercial shippers such as Wal-Mart and carriers like Federal Express.
In some ways, the change is a loss to the commercial sector, as it means the government is no longer shouldering huge R&D costs for technology, producing free side benefits in the non-military world. But the U.S. military's new attitude includes an unprecedented degree of openness about its experiences in deploying huge, complex cargo tracking systems.Most startling of all, the military is reportedly open to the possibility of sharing cargo tracking networks.
Changes in attitude
The changeover has been as swift as a blitzkrieg. "We're relying 100 percent on external IT now," says Capt. Gary Clement, U.S.Marine Corps transportation systems project team leader and project officer for the Marines' automatic identification technology (AIT) project. Indeed, the Marines have been using wireless technology from Symbol Technologies Inc. of Holtsville, N.Y., to read and transmit bar-code information on their kit and supplies at the case and piece level since 1999. Symbol, which has been supplying the U.S. military with equipment for more than 20 years, does customize the equipment—the handheld readers, for example, are "ruggedized" for the sorts of knocks and shocks encountered in field use—but increasingly, the stuff it provides in military contracts is the same as what's sold to everybody else. Even the vocabulary used by the military to describe the challenges it faces sounds more boardroom than barracks: "It's hard to redesign our business processes to take advantage of the new technological capabilities, says Clement, discussing the Marines' next step— introducing RFID tracking technology.
None of this would have been possible without the "acquisition reforms" introduced in the mid '90s. For one thing, the U.S. military had to be weaned away from the elaborate specifications it once issued for even the most non-specialized materials. The U.S. Army used to have an eight-page specification for doughnuts, for example. That's gone now. Another symptom of a wholesale change in attitude is that the U.S. military no longer assumes it knows best. "I personally look at FedEx and go: 'Wow, if we can get that, we'll be darn good,'" says Clement.
By stepping back and allowing the commercial sector to take the lead in technology development, the Defense Department may have lost some cache but saved some money. "[The military] has lost its cutting-edge status. Now, especially in information technology, the marketplace, not the DOD, dictates the winner. That wasn't the case even four years ago," says Leonard Gliatta, senior programs manager for Symbol's government group. "They reap the benefit of what's commercially available, and because of the competitive nature of all this, they're able to obtain stuff at a very good price and rely on the infrastructure that the corporation —in the case of Symbol—has built up internationally, to support that equipment across the globe."
Why has the shift happened now? Gliatta points to the rise of the personal computer. As computing power migrated from the mainframe into the hands of anyone with a PC, he says, "big organizations like the DOD had less to say about things. The marketplace, with all its players, now decides the technological winner." Another reason is that logistics technology in the commercial sector simply got a lot better. A shipper can now book and track cargo electronically with more than 90 percent of the world's ocean liner capacity using only three Web-based "pOréal" services. General Motors can deliver a car within days, instead of weeks, of receiving an order.
Hard lessons in the Arabian Gulf
And the truth is, U.S. military logistics were ripe for an overhaul. The U.S. Army abandoned 1.6 million tons of excess material and equipment in Vietnam, according to U.S. Army General (Ret.) John Coburn, who was in charge of developing the TAV system for the Defense Department. Things hadn't improved much by the 1990 Gulf War. "We were good at shipping but we didn't know what we had," says Gen. Coburn. The official estimate was that the Armed Forces ended up opening between 20,000 and 40,000 containers after the war just to see what was inside them, but Coburn reckons it was even more. "Clearly that was unacceptable, so we got serious about developing a system for total asset visibility, so we could see not only what we have on hand but what we have in transit."
Coburn supervised the introduction of active RFID tags, which are capable of announcing their own presence before being "pinged" with a reader, making it easier to find them and identify the contents of the container to which they're attached. The TAV system now includes more than 750 "nodes"—locations of fixed and portable readers throughout the world, which transmit data to a centralized DOD database and software system called In-Transit Visibility (ITV). That's a significant improvement over the last Gulf War, according to David Stephens, Savi's senior vice president of public sector, based in Washington, D.C. Stephens says several Government Accounting Office reports claimed that the military could have saved $2 billion had this system been in place during the first Gulf War. The U.S. Armed Forces shipped out 30 percent fewer troops this time—and 90 percent fewer containers to support them. "There are a lot of anecdotes about how they could find material within minutes as opposed to days," says Stephens. Growth of the TAV system continues apace.
As part of the new openness, the DOD intends to share the benefits of the TAV system with the commercial sector in a symbiotic effort to improve cargo security. Savi and a host of leaders in the logistics industry—including former Deputy U.S. Customs Commissioner Sam Banks and the heads of two of the largest port-owning companies in the world— have together launched Smart and Secure Tradelanes, an initiative to leverage the technology and extend TAV's physical infrastructure. The idea is to use the RFID tag readers mounted at crucial points in ports to read off information about commercial cargo passing through—information useful both for security and commercial purposes. The Phase One pilot stage, which ran with 19 international commercial shippers from July 2002 to June 2003, was, by all accounts, a success. Savi's Stephens says Phase Two will extend the network and include more shippers and cargo.
Everyone wants RFID
Meanwhile, both the commercial and military sectors are abuzz about RFID. Right now it's anybody's guess as to who will be first to deploy at the case and pallet level across its entire operation. Last June,Wal-Mart mandated that its top 100 suppliers provide RFID capabilities by the beginning of 2005. In July 2002, Gen. Tommy Franks, who led the invasion of Iraq, issued an unclassified memo that specified that all pallets and containers moving around under the control of U.S. CENTCOM (the U.S. military's central command for the Middle East, Southwest Asia, Northeast Africa and the Arabian Gulf) would have to be fitted with RFID tags. That initiative, too, will be under way by 2005. It seems, overall, that operations of the U.S. military and the commercial sector are more in synch than ever.
"It's more recognition that our interests are the same when it comes to logistics and the whole issue of supply chain management," says Coburn. "It's being taken very seriously by the U.S. military, just as it is by the commercial sector." Logistics, he says, has moved not only from the back room to the boardroom in the commercial sector, but has become a top-level military concern as more people realize that though good logistics may not win wars, bad logistics can lose them.
Yet it's important to recognize that the needs of military logistics and commercial logistics will never dovetail perfectly, Coburn points out. "We in the military use commercial practices where we can, but we can't do it all the time," he says. "I don't believe in just-in-time inventory. Fighting a war is all about risk and we can't afford that extra risk of just-in-time because you're talking about soldiers' lives. But I don't believe in just-in-case inventory either. We don't have piles of stuff lying around any more. I believe in justright inventory."
The challenge, Coburn says, is to work out the likely rate of use of each individual piece of military equipment and supply item, and to make sure those responsible for ordering those items know exactly how much they already have and how many days away a new order is. To any experienced supply chain professional, that sounds a lot like a job for enterprise resource planning (ERP) software—a popular tool in commercial logistics management. Sure enough, all branches of the military are currently at varying stages of deploying ERP.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!
Toyota Material Handling and its nationwide network of dealers showcased their commitment to improving their local communities during the company’s annual “Lift the Community Day.” Since 2021, Toyota associates have participated in an annual day-long philanthropic event held near Toyota’s Columbus, Indiana, headquarters. This year, the initiative expanded to include participation from Toyota’s dealers, increasing the impact on communities throughout the U.S. A total of 324 Toyota associates completed 2,300 hours of community service during this year’s event.
The PMMI Foundation, the charitable arm of PMMI, The Association for Packaging and Processing Technologies, awarded nearly $200,000 in scholarships to students pursuing careers in the packaging and processing industry. Each year, the PMMI Foundation provides academic scholarships to students studying packaging, food processing, and engineering to underscore its commitment to the future of the packaging and processing industry.
Truck leasing and fleet management services provider Fleet Advantage hosted its “Kids Around the Corner Foundation” back-to-school backpack drive in July. During the event, company associates assembled 200 backpacks filled with essential school supplies for high school-age students. The backpacks were then delivered to Henderson Behavioral Health’s Youth & Family Services location in Tamarac, Florida.
For the past seven years, third-party logistics service specialist ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.