Northern Distribution Network to shore up Afghan supply chain
Escalating threats to Afghan supply routes spurred U.S. military officials to begin searching for alternatives back in 2008. It took some doing—and some help—but they found another way.
Steve Geary is adjunct faculty at the University of Tennessee's Haaslam College of Business and is a lecturer at The Gordon Institute at Tufts University. He is the President of the Supply Chain Visions family of companies, consultancies that work across the government sector. Steve is a contributing editor at DC Velocity, and editor-at-large for CSCMP's Supply Chain Quarterly.
The U.S. military may be winding down its operations in Iraq, but it's a whole different story in Afghanistan. Shortly after taking office in 2009, President Obama ordered the deployment of an additional 21,000 troops to Afghanistan. That number swelled to more than 30,000 over the following months, and in December, the president ordered another 30,000 troop bump by the summer of 2010. That will push the total to an estimated 98,000 U.S. troops, almost triple the number stationed in that country when President Bush left office.
The troop increase in Afghanistan might look manageable compared with the peak deployment in Iraq, which has been estimated at 170,000. But there's a lot more to the story than the numbers. In fact, looked at from a purely logistics perspective, military officials say, Afghanistan in many ways represents a worst-case scenario.
To begin with, there's the sheer volume of material that has to be brought in to support Afghan operations. Because Afghanistan offers little in the way of basic infrastructure, the military has to build things like housing. That means that in addition to moving people and their equipment into the country, it also has to bring in construction materials, food, medicine, and munitions, along with support contractors and everything else needed to survive in one of the most difficult environments on earth.
Then there's the challenge of finding a way to bring all that stuff into the country. Afghanistan has only 16 airports with paved runways, and only four are capable of handling international cargo traffic. There are no seaports—it is a landlocked nation. And there are no railroads in.
Under the circumstances, it's little surprise that military logisticians consider providing support to troops in Afghanistan to be the ultimate test. "If you [were asked] where's the last place you'd like to be fighting a war, other than Antarctica, you might well pick Afghanistan [for its] landlocked, very austere environment," said Dr. Ash Carter, under secretary of defense for acquisition, technology, and logistics, at a recent conference on defense logistics modernization in Washington, D.C.
No entrance
In the absence of solid alternatives, the U.S. military has been forced to rely mainly on roads to bring supplies into Afghanistan. But the situation there isn't much better. Because the United States is barred from moving goods through Iran, points of entry into Afghanistan by ground are limited to a handful of mountain passes.
Until very recently, the only ground route judged usable by the United States and NATO was one that went in by way of Pakistan. After the fall of the Taliban government in 2002, the United States began sending truckloads of supplies picked up at Pakistan's Port of Karachi into Afghanistan through the Khyber Pass. At the time, the Khyber Pass was considered to be much safer than the alternative, a crossing in the Hindu Kush mountains at a town called Spin Boldak.
But the military has since been forced to revise its assessment of security on the Khyber Pass route (as military leaders often quip, "The enemy gets a vote."). In December 2008, 12 percent of the Afghanistan-bound freight crossing Pakistan's Northwest Frontier Province en route to the Khyber Pass disappeared, most of it in flames, according to Vice Adm. Mark Harnitchek, deputy commander of the U.S. Transportation Command.
The attacks on the freight convoys led logisticians to reroute shipments destined for the southern part of Afghanistan to the crossing at Spin Boldak. But Spin Boldak hasn't proved much better where security is concerned. On Aug. 30, 2009, a NATO convoy was attacked, and 20 fuel tankers and other supply trucks were destroyed.
The search for Plan B
Given the risks presented by the Pakistan ground routes, it's probably no surprise that the U.S. Central Command (CENTCOM) has been actively seeking other options. In 2008—well before the surge—Gen. Duncan McNabb, the commander of the U.S. Transportation Command, handed down orders directing the Surface Deployment and Distribution Command (SDDC) to start working with CENTCOM to find alternatives.
To understand what happened next, you have to know something about how military logistics has changed since the end of the Cold War. What many people don't realize is that the military is no longer in the business of moving freight. When it has cargo to move, it does exactly what a lot of its private-sector counterparts do—it hires a common carrier. "We have a worldwide presence without owning a truck, or a train, or a ship," says Maj. Gen. Jim Hodge, the commander of SDDC. "We do it all through our commercial partners."
So when it came time to get the project rolling, the military's first move was to get in touch with some of those commercial partners. "We decided to call in the guys who do this for a living and leverage them the best we could," says Col. Stan Wolosz, the SDDC's chief of staff. Military personnel quickly began contacting some of their primary carrier partners—including Maersk Line Ltd., APL, and Hapag-Lloyd—to solicit their help. As Kevin Speers, Maersk's senior director of marketing and administration, recalls, the central question the military posed to them was: "How can we bring in cargo overland to Afghanistan without touching Pakistan or Iran?"
The New Silk Road
What the military and its partners came up with is what's now known as the Northern Distribution Network (NDN), a set of multimodal routings that enter Afghanistan from the North, bypassing Pakistan completely. In some cases, these journeys incorporate parts of the old trade routes used for centuries by merchants, explorers, and warriors—routes collectively known as the Silk Road.
Although the partners identified nine options in total, most are variations on two basic approaches. One route crosses the Baltic Sea to Riga in Latvia, where the freight is loaded onto rail for the journey through Russia, Kazakhstan, and Uzbekistan, where it's offloaded onto trucks and hauled into Afghanistan.
The other route goes east through the Mediterranean and up the Dardanelles into the Black Sea, with the freight offloaded to rail at Tbilisi in Georgia. The cargo then moves overland through Georgia, Armenia, and Azerbaijan, before being loaded onto ships again at Baku for passage across the Caspian Sea to Kazakhstan. In Kazakhstan, it's loaded back onto rail for movement to Uzbekistan, where it's ultimately offloaded to trucks and hauled into Afghanistan.
The main destination hubs for cargo rolling into Afghanistan from the north are Bagram Air Force Base, Kabul, and Kandahar. In total, there are 32 direct delivery locations in Afghanistan.
As daunting as it might sound, coordinating the various legs of these complex multimodal moves is only part of the challenge. The other part is working with the various jurisdictions involved to make sure the shipments comply with each country's rules and requirements. "You have to tie together the governments, the carriers, the shipper, and the ground force," says Col. Wolosz. To help smooth the process, SDDC has taken the step of placing liaison officers in consulates and embassies across the NDN.
Mission accomplished
The first shipment to move via one of the northern routes departed in February 2009 and was delivered in May. Based on the success of that venture, the NDN was declared operational in May 2009, less than a year after the project began. As of the end of March 2010, over 10,000 containers had moved through this new set of routes.
The primary user of the NDN, which is reserved for non-lethal supplies, is the Defense Logistics Agency (DLA). So far, that agency alone has moved more than 8,000 containers through the network. "I think it has gone very well," says Air Force Col. Deirdre Mahon, the DLA's division chief for combatant command support. "Through time, the NDN has proven to be very reliable. We've seen the transit time continue to decrease and the capacity continue to increase. It's doing the job it was intended to do."
One of those jobs, of course, was to reduce the volume of freight brought in through Pakistan. And on that count, the project has been an unqualified success. Today, less than half of all Afghanistan-bound freight moves through Pakistan.
Alan Estevez, the principal deputy assistant secretary of defense (logistics & materiel readiness), credits the private sector with much of that success. "We could not do this without the great support we have from the contractor community, our partners, and transportation providers through some third-party logistics providers," he says.
The military has come in for its share of praise as well. "It's worked very well because whenever we've had an issue, we've been able to go right back to SDDC for help," says Rick Boyle, vice president, U.S.-flag transportation services at Maersk Line Ltd. "Together, we have an ability to get things done very quickly."
The New York-based industrial artificial intelligence (AI) provider Augury has raised $75 million for its process optimization tools for manufacturers, in a deal that values the company at more than $1 billion, the firm said today.
According to Augury, its goal is deliver a new generation of AI solutions that provide the accuracy and reliability manufacturers need to make AI a trusted partner in every phase of the manufacturing process.
The “series F” venture capital round was led by Lightrock, with participation from several of Augury’s existing investors; Insight Partners, Eclipse, and Qumra Capital as well as Schneider Electric Ventures and Qualcomm Ventures. In addition to securing the new funding, Augury also said it has added Elan Greenberg as Chief Operating Officer.
“Augury is at the forefront of digitalizing equipment maintenance with AI-driven solutions that enhance cost efficiency, sustainability performance, and energy savings,” Ashish (Ash) Puri, Partner at Lightrock, said in a release. “Their predictive maintenance technology, boasting 99.9% failure detection accuracy and a 5-20x ROI when deployed at scale, significantly reduces downtime and energy consumption for its blue-chip clients globally, offering a compelling value proposition.”
The money supports the firm’s approach of "Hybrid Autonomous Mobile Robotics (Hybrid AMRs)," which integrate the intelligence of "Autonomous Mobile Robots (AMRs)" with the precision and structure of "Automated Guided Vehicles (AGVs)."
According to Anscer, it supports the acceleration to Industry 4.0 by ensuring that its autonomous solutions seamlessly integrate with customers’ existing infrastructures to help transform material handling and warehouse automation.
Leading the new U.S. office will be Mark Messina, who was named this week as Anscer’s Managing Director & CEO, Americas. He has been tasked with leading the firm’s expansion by bringing its automation solutions to industries such as manufacturing, logistics, retail, food & beverage, and third-party logistics (3PL).
Supply chains continue to deal with a growing volume of returns following the holiday peak season, and 2024 was no exception. Recent survey data from product information management technology company Akeneo showed that 65% of shoppers made holiday returns this year, with most reporting that their experience played a large role in their reason for doing so.
The survey—which included information from more than 1,000 U.S. consumers gathered in January—provides insight into the main reasons consumers return products, generational differences in return and online shopping behaviors, and the steadily growing influence that sustainability has on consumers.
Among the results, 62% of consumers said that having more accurate product information upfront would reduce their likelihood of making a return, and 59% said they had made a return specifically because the online product description was misleading or inaccurate.
And when it comes to making those returns, 65% of respondents said they would prefer to return in-store, if possible, followed by 22% who said they prefer to ship products back.
“This indicates that consumers are gravitating toward the most sustainable option by reducing additional shipping,” the survey authors said in a statement announcing the findings, adding that 68% of respondents said they are aware of the environmental impact of returns, and 39% said the environmental impact factors into their decision to make a return or exchange.
The authors also said that investing in the product experience and providing reliable product data can help brands reduce returns, increase loyalty, and provide the best customer experience possible alongside profitability.
When asked what products they return the most, 60% of respondents said clothing items. Sizing issues were the number one reason for those returns (58%) followed by conflicting or lack of customer reviews (35%). In addition, 34% cited misleading product images and 29% pointed to inaccurate product information online as reasons for returning items.
More than 60% of respondents said that having more reliable information would reduce the likelihood of making a return.
“Whether customers are shopping directly from a brand website or on the hundreds of e-commerce marketplaces available today [such as Amazon, Walmart, etc.] the product experience must remain consistent, complete and accurate to instill brand trust and loyalty,” the authors said.
When you get the chance to automate your distribution center, take it.
That's exactly what leaders at interior design house
Thibaut Design did when they relocated operations from two New Jersey distribution centers (DCs) into a single facility in Charlotte, North Carolina, in 2019. Moving to an "empty shell of a building," as Thibaut's Michael Fechter describes it, was the perfect time to switch from a manual picking system to an automated one—in this case, one that would be driven by voice-directed technology.
"We were 100% paper-based picking in New Jersey," Fechter, the company's vice president of distribution and technology, explained in a
case study published by Voxware last year. "We knew there was a need for automation, and when we moved to Charlotte, we wanted to implement that technology."
Fechter cites Voxware's promise of simple and easy integration, configuration, use, and training as some of the key reasons Thibaut's leaders chose the system. Since implementing the voice technology, the company has streamlined its fulfillment process and can onboard and cross-train warehouse employees in a fraction of the time it used to take back in New Jersey.
And the results speak for themselves.
"We've seen incredible gains [from a] productivity standpoint," Fechter reports. "A 50% increase from pre-implementation to today."
THE NEED FOR SPEED
Thibaut was founded in 1886 and is the oldest operating wallpaper company in the United States, according to Fechter. The company works with a global network of designers, shipping samples of wallpaper and fabrics around the world.
For the design house's warehouse associates, picking, packing, and shipping thousands of samples every day was a cumbersome, labor-intensive process—and one that was prone to inaccuracy. With its paper-based picking system, mispicks were common—Fechter cites a 2% to 5% mispick rate—which necessitated stationing an extra associate at each pack station to check that orders were accurate before they left the facility.
All that has changed since implementing Voxware's Voice Management Suite (VMS) at the Charlotte DC. The system automates the workflow and guides associates through the picking process via a headset, using voice commands. The hands-free, eyes-free solution allows workers to focus on locating and selecting the right item, with no paper-based lists to check or written instructions to follow.
Thibaut also uses the tech provider's analytics tool, VoxPilot, to monitor work progress, check orders, and keep track of incoming work—managers can see what orders are open, what's in process, and what's completed for the day, for example. And it uses VoxTempo, the system's natural language voice recognition (NLVR) solution, to streamline training. The intuitive app whittles training time down to minutes and gets associates up and working fast—and Thibaut hitting minimum productivity targets within hours, according to Fechter.
EXPECTED RESULTS REALIZED
Key benefits of the project include a reduction in mispicks—which have dropped to zero—and the elimination of those extra quality-control measures Thibaut needed in the New Jersey DCs.
"We've gotten to the point where we don't even measure mispicks today—because there are none," Fechter said in the case study. "Having an extra person at a pack station to [check] every order before we pack [it]—that's been eliminated. Not only is the pick right the first time, but [the order] also gets packed and shipped faster than ever before."
The system has increased inventory accuracy as well. According to Fechter, it's now "well over 99.9%."
IT projects can be daunting, especially when the project involves upgrading a warehouse management system (WMS) to support an expansive network of warehousing and logistics facilities. Global third-party logistics service provider (3PL) CJ Logistics experienced this first-hand recently, embarking on a WMS selection process that would both upgrade performance and enhance security for its U.S. business network.
The company was operating on three different platforms across more than 35 warehouse facilities and wanted to pare that down to help standardize operations, optimize costs, and make it easier to scale the business, according to CIO Sean Moore.
Moore and his team started the WMS selection process in late 2023, working with supply chain consulting firm Alpine Supply Chain Solutions to identify challenges, needs, and goals, and then to select and implement the new WMS. Roughly a year later, the 3PL was up and running on a system from Körber Supply Chain—and planning for growth.
SECURING A NEW SOLUTION
Leaders from both companies explain that a robust WMS is crucial for a 3PL's success, as it acts as a centralized platform that allows seamless coordination of activities such as inventory management, order fulfillment, and transportation planning. The right solution allows the company to optimize warehouse operations by automating tasks, managing inventory levels, and ensuring efficient space utilization while helping to boost order processing volumes, reduce errors, and cut operational costs.
CJ Logistics had another key criterion: ensuring data security for its wide and varied array of clients, many of whom rely on the 3PL to fill e-commerce orders for consumers. Those clients wanted assurance that consumers' personally identifying information—including names, addresses, and phone numbers—was protected against cybersecurity breeches when flowing through the 3PL's system. For CJ Logistics, that meant finding a WMS provider whose software was certified to the appropriate security standards.
"That's becoming [an assurance] that our customers want to see," Moore explains, adding that many customers wanted to know that CJ Logistics' systems were SOC 2 compliant, meaning they had met a standard developed by the American Institute of CPAs for protecting sensitive customer data from unauthorized access, security incidents, and other vulnerabilities. "Everybody wants that level of security. So you want to make sure the system is secure … and not susceptible to ransomware.
"It was a critical requirement for us."
That security requirement was a key consideration during all phases of the WMS selection process, according to Michael Wohlwend, managing principal at Alpine Supply Chain Solutions.
"It was in the RFP [request for proposal], then in demo, [and] then once we got to the vendor of choice, we had a deep-dive discovery call to understand what [security] they have in place and their plan moving forward," he explains.
Ultimately, CJ Logistics implemented Körber's Warehouse Advantage, a cloud-based system designed for multiclient operations that supports all of the 3PL's needs, including its security requirements.
GOING LIVE
When it came time to implement the software, Moore and his team chose to start with a brand-new cold chain facility that the 3PL was building in Gainesville, Georgia. The 270,000-square-foot facility opened this past November and immediately went live running on the Körber WMS.
Moore and Wohlwend explain that both the nature of the cold chain business and the greenfield construction made the facility the perfect place to launch the new software: CJ Logistics would be adding customers at a staggered rate, expanding its cold storage presence in the Southeast and capitalizing on the location's proximity to major highways and railways. The facility is also adjacent to the future Northeast Georgia Inland Port, which will provide a direct link to the Port of Savannah.
"We signed a 15-year lease for the building," Moore says. "When you sign a long-term lease … you want your future-state software in place. That was one of the key [reasons] we started there.
"Also, this facility was going to bring on one customer after another at a metered rate. So [there was] some risk reduction as well."
Wohlwend adds: "The facility plus risk reduction plus the new business [element]—all made it a good starting point."
The early benefits of the WMS include ease of use and easy onboarding of clients, according to Moore, who says the plan is to convert additional CJ Logistics facilities to the new system in 2025.
"The software is very easy to use … our employees are saying they really like the user interface and that you can find information very easily," Moore says, touting the partnership with Alpine and Körber as key to making the project a success. "We are on deck to add at least four facilities at a minimum [this year]."