In early January, Wal-Mart, which owns the Sam's Club chain of warehouse stores, sent letters to suppliers outlining a series of RFID mandates that it plans to phase in over the next two years.
John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
Suppliers to Sam's Club are scrambling to increase their RFID capabilities in advance of a hail of tagging mandates. In early January, Wal-Mart, which owns the chain of warehouse stores, sent letters to suppliers outlining a series of RFID mandates that it plans to phase in over the next two years.
The first of those mandates—a directive requiring suppliers to tag all pallets shipped to the Sam's Club DC in DeSoto, Texas—has already gone into effect (suppliers had until Jan. 30 to comply). To encourage compliance,Wal-Mart planned to assess a $2 per-pallet fee for untagged pallets. Wal-Mart will use the fee to offset the cost of tagging any untagged pallets itself, although the retailer would much rather see 100 percent compliance than get into the tagging business.
And that was only the beginning. In its letter, Wal-Mart also notified suppliers that it planned to expand the pallettagging program to four additional Sam's Club DCs by October of this year. It also noted that it would raise the "service fee" for non-compliance to $3 a pallet in 2009.
The initiative doesn't stop there either. The mega-retailer is also expanding its tagging requirements beyond the pallet level. In addition to its pallet-tagging demands, Wal- Mart has notified suppliers that it expects them to begin affixing RFID tags to cases of products shipped to the DeSoto distribution center by the end of October 2008. That requirement will be expanded to the chain's 22 DCs nationwide by October 2009.
And by 2010, the retailer will expect suppliers to take their tagging programs to the item level—tagging every sellable unit arriving at a Sam's Club DC. That means every product entering a Sam's Club warehouse store—be it a plasma TV or an eight-pack of Prego spaghetti sauce—needs to carry a tag. It's important to keep in mind that at Sam's, many products are sold as cases or even pallets. So in this instance, "item-level" tagging doesn't mean tagging individual tubes of toothpaste but rather, bundled four-packs of eight-ounce tubes.
The company has not announced what the service charge structure will be for suppliers that miss the deadline for tagging cases and individual items.
Wal-Mart's decision to extend its tagging program to the item level caught even some insiders unawares. "I am surprised, to be honest," says Dean Frew, president and CEO of Xterprise, a provider of source tagging solutions for suppliers to Wal-Mart. "We knew they'd be moving to the case level … but in hindsight, there is likely a huge benefit to go all in. If you are going to use the technology, then use it for everything—at the case, pallet, and sellable-unit level."
It appears that Wal-Mart is set on making its Sam's Club stores the model for its RFID program. And it makes sense. Sam's has far fewer overall suppliers than Wal-Mart does, and the warehouse store setup requires more planning to avoid out-of-stocks. The biggest challenge is that product is not sitting on a shelf above a display but rather, is stacked three rows high on a rack and requires a forklift to be pulled down. "It's a bigger challenge when moving product to the sellable level in the store," says Frew.
money still flowing into RFID sector
As item-level tagging continues to gain steam, Impinj keeps on raising money. And each additional round of financing only serves to raise expectations that the firm, which provides solutions for both item-level and supply chain tagging, will file for a public stock offering or be acquired. Those are the two most common options for venture capitalists to recoup their investment. The latest round of financing—an extension of the 2007 round that brought in $19 million— pulled in an additional $14 million. Impinj has now raised more than $110 million in venture funding.
Evan Fein, vice president of finance at Impinj, says that an initial public offering is not on the radar screen, nor is a sale of the company. He says that the additional funds will be used to work with the company's strategic partners to bring more item-level RFID solutions to the market. Impinj has a heavy focus on the pharmaceutical and apparel sectors, both of which are hotly pursuing item-level tagging solutions.
Those making the additional investments include Inventec Appliances Corp., a global producer of smart handheld devices and Internet appliance solutions; LS Industrial Systems Co. Ltd., an industrial electric machinery and systems producer in Korea; Samsung Ventures America, the U.S. operation of Samsung Venture Investment Corp.; and YFY Group, Taiwan's largest papermaking conglomerate, which recently launched an RFID subsidiary called Yeon Technologies Co.
As autonomous systems take on a bigger role in logistics and industrial production applications, the race is on to make the equipment smarter, more efficient, and safer. To accelerate work in this area, the German lift truck and logistics technology vendor Kion Group is partnering with a local university to support expanded studies on artificial intelligence (AI) and autonomous systems.
According to Kion, Peitz’s work will focus on the development of autonomous systems that operate intelligently and safely for all parties involved, with a particular focus on autonomous mobile robots, forklift trucks, and AI-based systems that are used in logistics and production environments.
The objective of the endowed professorship is to advance the field of research at the highest international level, Kion said in a statement. In close collaboration with research networks and other partners both within and outside TU Dortmund University, such as the Fraunhofer Institute for Material Flow and Logistics IML and the Kion Group itself, the professorship will form a “hub” for digital and intelligent logistics, the company added.
American skin-care company ET Browne—best known for its Palmer’s Cocoa Butter—has trimmed costs, boosted revenue, and increased profits thanks to a recent IT upgrade from its longtime technology partner Syspro, a global enterprise resource planning (ERP) software provider that specializes in serving manufacturing and distribution businesses. ET Browne has run on Syspro software for 25 years and racked up some of its biggest year-over-year improvements following a 2023 upgrade to the latest version of Syspro ERP—an enhancement that allowed it to leverage the platform’s material requirements and planning (MRP) capabilities to build a just-in-time inventory system.
The net result? A smoother-running supply chain.
“We’ve successfully relied on [Syspro] for more than a quarter century while both growing and aligning our business to take advantage of the [platform’s] enhancements,” Pieter Goes, ET Browne’s vice president of IT & BI (business intelligence), said in a statement describing the project. “After bringing in [Syspro] to do native demand forecasts, we were able to better evaluate key markets and key customers, enabling our forecasting and capacity planning to be much more accurate. As a result, we can achieve a fill rate of greater than 95% and are able to process our purchase orders much sooner, resulting in better supply.”
NEW CAPABILITIES, BETTER OUTCOMES
Syspro’s MRP capabilities allow companies to balance supply and demand for materials and components so they can accelerate manufacturing production. With the system upgrade, ET Browne was able to take advantage of those capabilities to gain better visibility and control over inventory and the supply chain. As the companies explain, this allowed ET Browne to predict demand, understand how filling the projected sales pipeline would affect production schedules, and anticipate the peaks in demand it would need to buffer.
Leveraging those demand forecasting and supply chain management capabilities, ET Browne created a just-in-time inventory system that has dramatically reduced the amount of raw material and product it keeps on hand—a move that is translating into increased profits: Since implementing the upgrade, ET Browne has reduced inventory by 22% and increased profits 113% on 7% revenue growth.
ET Browne’s leaders say they intend to leverage Syspro to manage emerging challenges as well. Those include meeting growing consumer, distributor, and government demands to use recycled materials in packaging, while also making sure the company first uses up the materials it already has on hand. That transition will increase complexity within the company’s bill of materials, something Syspro’s management capabilities can help it navigate.
“[Syspro] ERP provides much more than just financial management,” Brian Rainboth, CEO of Syspro Americas, said in the statement. “Our platform empowers mid-market manufacturers to create accurate demand forecasts [and] project exactly how much raw material they’ll need to order and how much product they need to make to meet demand. We’re proud to celebrate 25 years with ET Browne and look forward to enabling future growth and profitability as the company deploys additional capabilities with [our] platform.”
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Illustration courtesy of Clean Energy Fuels Corporation
For consumers, the car-buying process generally includes a test drive so they can see if the vehicle lives up to its hype before they plunk down any money. But the process can be a little more difficult for commercial fleet managers.
The 2025 Peterbilt 579 day cab tractor, branded in Clean Energy’s signature green, will be available for fleets to test on their normal routes for up to two weeks. And if you don’t happen to have an RNG fueling station in your own yard, that’s no problem: The fleets testing the demo truck will be able to use Clean Energy’s fueling infrastructure, which consists of over 600 stations across North America, 200 of which have public tractor-trailer access.
First in line to try the new rig—which can haul heavy loads for an 800-mile range—is transportation and logistics giant J.B. Hunt Transport Inc. After Hunt completes its trial, the truck will make its way through large and medium-sized heavy-duty trucking companies in California, Arizona, Texas, Oklahoma, Ohio, Michigan, Pennsylvania, and Florida. Clean Energy says it expects to run the X15N demo truck program at least through 2025.
“Vehicles powered by renewable natural gas produce significantly less carbon emissions throughout their lifecycle and are more compatible with today’s available infrastructure than most competing emissions-reduction technologies,” Greer Woodruff, executive vice president of safety, sustainability, and maintenance at J.B. Hunt, said in a release. “The new technology and supporting fuel network in this pilot have the potential to be a viable, cost-effective solution for customers wanting to decrease their carbon footprint in the near term.”
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Photo courtesy of Hong Kong Air Cargo Terminals Ltd. (Hactl)
The independent airfreight handler Hong Kong Air Cargo Terminals Ltd. (Hactl) has found a way to green up its operations and keep folks hydrated at the same time. The company recently announced that instead of sending old staff uniforms to a landfill, it had upcycled them into 5,000 plastic cups.
Old uniforms often end up in the waste stream because they’re made ofblended fibers, which are typically difficult to recycle. But through Hactl’s “Zero Waste Uniform Upcycling Project,” polyester fibers from the old uniforms were recycled through processes like melt-granulation into raw plastic granules that were then used to manufacture recyclable cups.
“In Hong Kong, the aviation industry, like many industries, provides uniforms for front-line staff. Dealing with old uniforms is an important environmental issue,” Hactl Chief Executive Wilson Kwong said in a release. “We hope that through this project, we can break through traditional limitations and recycle old uniforms to achieve ‘zero waste upcycling’ and reduce the burden on landfills, while encouraging the industry to contribute toward a circular economy and sustainable development.”
The initiative is part of the company’s overall efforts to curb waste. Hactl launched its “Green Terminal” sustainability program in 2018 and has committed to achieving a 75% waste recycling rate by 2030.
Regular online readers of DC Velocity and Supply Chain Xchange have probably noticed something new during the past few weeks. Our team has been working for months to produce shiny new websites that allow you to find the supply chain news and stories you need more easily.
It is always good for a media brand to undergo a refresh every once in a while. We certainly are not alone in retooling our websites; most of you likely go through that rather complex process every few years. But this was more than just your average refresh. We did it to take advantage of the most recent developments in artificial intelligence (AI).
Most of the AI work will take place behind the scenes. We will not, for instance, use AI to generate our stories. Those will still be written by our award-winning editorial team (I realize I’m biased, but I believe them to be the best in the business). Instead, we will be applying AI to things like graphics, search functions, and prioritizing relevant stories to make it easier for you to find the information you need along with related content.
We have also redesigned the websites’ layouts to make it quick and easy to find articles on specific topics. For example, content on DC Velocity’s new site is divided into five categories: material handling, robotics, transportation, technology, and supply chain services. We also offer a robust video section, including case histories, webcasts, and executive interviews, plus our weekly podcasts.
Over on the Supply Chain Xchange site, we have organized articles into categories that align with the traditional five phases of supply chain management: plan, procure, produce, move, and store. Plus, we added a “tech” category just to round it off. You can also find links to our videos, newsletters, podcasts, webcasts, blogs, and much more on the site.
Our mobile-app users will also notice some enhancements. An increasing number of you are receiving your daily supply chain news on your phones and tablets, so we have revamped our sites for optimal performance on those devices. For instance, you’ll find that related stories will appear right after the article you’re reading in case you want to delve further into the topic.
However you view us, you will find snappier headlines, more graphics and illustrations, and sites that are easier to navigate.
I would personally like to thank our management, IT department, and editors for their work in making this transition a reality. In our more than 20 years as a media company, this is our largest expansion into digital yet.