Art van Bodegraven was, among other roles, chief design officer for the DES Leadership Academy. He passed away on June 18, 2017. He will be greatly missed.
It is difficult to conceive the distance we have traveled in the realm of employee/worker well being. In the United States, our manufacturing and distribution legacy came from Great Britain and the early days of the Industrial Revolution. Our heritage lies in the practices developed and refined in what William Blake ominously referred to as "dark Satanic Mills." Health, safety, and ergonomics were nonissues—at least for the employers. Men, women, and children were expected to put their backs into it, and to be quick about it, as well. Slacking and lollygagging were not tolerated, nor were illness and injury.
What a difference a century makes. Though there will always be holdouts, most employers today realize that it's in their own best interest to keep their employees healthy and safe. Healthy employees are absent less often and are more productive than their sickly counterparts are. They don't drive up health insurance costs, and they tend not to die before their working careers are over.
As part of their efforts to keep those workers healthy, employers nationwide have put measures in place to protect them from harmful materials in the workplace—particles, vapors, chemicals, byproducts, whatever. But they're not stopping there. Many companies, with encouragement from their health care insurers, are actually promoting better preventive and proactive care for their employees' general health, encouraging prevention rather than continuing to blindly pay the price of reactive medical care.
The next step has been to provide wellness programs, sometimes on company time. Such programs often involve movements to influence behaviors that have health implications, such as smoking and substance abuse. Some companies, like PepsiCo, give cash to employees (and spouses) who complete online health risk assessments, with further cash awards for seminar and counseling activities. The smoke-free, drug- and alcohol-free, weapon-free working environment is now a commonplace in American business.
All aspects of supply chain management benefit from contemporary approaches to improved individual health. So what if it's only enlightened self-interest? The movement represents a win/win/win proposition for employers, employees, governments, insurers, families, and eventually for consumers and product/service end-users.
Keep it safe
The rationale for safety programs is constructed in much the same way as it is for health programs. Beyond being simply the right thing to do, protecting your workers from unsafe conditions is just plain smart business. Not only is there a cost associated with having people out because of workplace injuries, but there are also the issues of long-term and short-term disability (and insurance rates), of workers' compensation (and escalating contributions), and, of course, of lawsuits.
Beyond that, there is incredible cost tied up in finding temporary substitutes, or in the ghastly expense of recruiting and training permanent replacements. Then, too, the returning worker may not be able to perform the same tasks, or at the same level, as before.
The field of safety management has generated a cottage industry of specialized consultants, who help organize corporate efforts to maintain safe and accident-free workplaces. Generally, such programs contain plans and streamlined, standardized processes for daily, weekly, monthly, and annual activities for defined areas of safety needs. They typically communicate:
Who is responsible for decisions, activities, communications
How things are to be done
Where things—tools, controls, materials, etc.— are located
How often things need to be done (training, drills, inspections, tests, etc.)
What equipment and processes are involved.
Another aspect of safety deserves mention. When the public is exposed to the effects of impaired workers, or of defective products that result from worker impairment, or of dangerous product content or environmental damage, the exposures are nearly beyond reckoning. It's not merely the PR damage in the marketplace; it's about real money, involving sums with lots of commas.
The nightmarish visions that keep managers up at night tend to center on the extreme scenarios, such as a truck driver who has gone 36 hours without sleep before plowing into a minivan full of kids. Or a substanceimpaired engineer whose locomotive takes out a school bus stalled at a grade-level crossing. But these examples are the outer limits, the kind that grab headlines.More often, the event in question is merely a fire and explosion generated by a mishap with a fuel truck. But whatever the circumstances, mishaps that result from safety gaps in operations can have profound consequences not only for workers and employers, but across the entire supply chain.
Ergonomics and the science of safe practices
Sometimes the lines between health, safety, and ergonomics blur, as when white collar supply chain professionals deal with carpal tunnel issues that result from poorly designed keyboards and workstations. Or when continuous work with a computer monitor affects vision and leads to headaches. Or when chairs fail to provide correct lumbar and other back support— when work surfaces and processes aren't consistent with the human body's long-term capabilities.
We usually first think of ergonomics in its contribution to improved performance and productivity, and that's a legitimate perspective. But ergonomics actually contributes mightily to issues in health and safety, as well. Examples abound throughout the supply chain. One example: a lot of work has gone into making power units in trucking more ergonomically friendly to both long-haul and short-haul transportation. The professional drivers in these rigs need all the relief they can get in their long and kidney-jarring days, as well as during their rest periods.
It is in the distribution center, though, that we can see the most—and most direct— applications of ergonomic designs, particularly for productivity advantage. But it's still enlightened self-interest; an ergonomically friendly workplace will not only yield higher productivity, but will also contribute to the longevity of a high-performance workforce. (We should note here that the late Gene Gagnon, our friend and collaborator—and the father of warehouse productivity management— provided many of the thoughts embedded in this discussion.)
Now, defining ergonomics can be difficult. Some say that ergonomics is the science of designing work methods and tools for maximum human comfort. Others say that good ergonomics is the business of helping people work smarter but not harder. Still others define ergonomics as the arrangement of work so that people will minimize the possibility of excess fatigue or personal injury. In fact, ergonomics involves all three, and more.
In considering the process, you should begin with facility construction but also look at hiring practices and every aspect of the layout. That means looking at buildings, equipment, training, and processes. To justify the necessary investment, weigh the cost of the ergonomics changes against the current cost of job-related injuries.
Authors' note: Next month, we will look more deeply into the benefits of investing in good ergonomic practices and applying those principles in the distribution center.
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."