In uncertain times, we can all use some guideposts to tell us how far we've come and how far we've yet to go. Here's our current take on the Ten Commandments for supply chain management success.
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.
As we continue to work in a shape-shifting universe, we need some guideposts, some mileage markers that give us a sense of where we are and how far we have yet to go. This may be as good a time as any to put some success and failure factors on the table to help supply chain management professionals grow to become all they can be.
What follows is my current take on the Ten Commandments for success in supply chain management, in business, and in life. There are many, probably more than 10, but the core issues seemed to sort themselves well into a set of 10 Thou Shalts and Thou Shalt Nots. Please note that the items below are not carved in stone, either one- or two-sided, and that they are backed up on a flash drive.
1. Thou shalt not slander every idea that did not occur to you first. C'mon, man, are you really the smartest little boy (or girl) in the room, always? How many of your very fine ideas have been rejected because you abused, insulted, or demeaned all of those you would eventually need to get behind necessary change?
2. Thou shalt not dwell in the past. Get over it! Sears is terminally ill, and K-Mart is already dead. Omnichannel fulfillment is not the same as shipping orders from mailed-in forms at the turn of the 20th century. Visibility through information technology is not simply an updated version of walking the warehouse floor until the object of a customer's desire is spotted by the naked eye. And stop railing against the habits and passions of the current generation of working associates.
3. Thou shalt not live entirely in the future. Yes, I know that there is always a better way to do what we're doing. Yes, I know that what we have solved only portions of the greater challenge. I also know that it is somewhere between imbecilic and hopelessly naïve to throw out the investment in what we have before we have leveraged all that it can contribute—even if we can somehow roughly envision what might be better, if only we could define it and force the entire business community to adopt it overnight.
4. Thou shalt not focus on functions and outcomes. There is more to work life than meeting today's objectives in a world we suppose has been defined for all time as what it is now. While we are busy satisfying customers, we must also consider what's next. Not necessarily what is the ultimate unified field theory of everything supply chain, but what next year—and the year after—is likely to bring. And what we must do to be ready if the changes we can reasonably anticipate actually materialize.
5. Thou shalt not impose your style and preferences on everyone. Doing the right things in the right way requires teams of energized, motivated, and educated people. Leaders take many forms and pursue objectives in different ways—and are motivated by different factors. A tough lesson is that what drives you as a leader, how you work, how you communicate, how you reach goals may or may not yield the results you desperately need. You can't pep talk the organization's way to success; you can't intimidate that outcome, either. You can't take care of the people and expect results simply because they have been comforted; worst of all, no system of measures and milestones contains any guarantee that the real result will resemble the plan—in outcome, in timing, or in costs.
You, as a leader, must know what all the management styles are, when to use them, and with whom to use which ones. Further, you've got to know your people so well that you recognize where they fall in the task/relationship spectrum—and use the appropriate style with each of them.
6. Thou shalt carefully assess everything different. Not that we need to accept every notion that comes floating through the open window or hail each new concept as the panacea that will fix all that is wrong or overcome all the limitations and barriers of the past. But we do have a responsibility, for self-preservation if nothing else, to carefully consider those ideas that actually have merit, legs, and a promise of sustainability and scalability.
7. Thou shalt learn from the past. Despite the fate of dinosaurs stuck in the tar of La Brea, there are some universal truths that have validity from generation to generation, values that are, so far as we can see, eternal. Stick to these; adapt them as circumstances shift; and hold them, if currently in disfavor, close against the day when they are newly and more widely recognized for their intrinsic worth.
8. Thou shalt anticipate the future. None of us can afford to ignore the present; we must meet customer expectations and operational objectives. But we must devote time, energy, and resources to what happens—or is likely to happen—next, and after that, and then after that. As leaders, we cannot afford to be taken by surprise when the change that everyone but us knew was coming actually arrives.
We need to be actively thinking about such things as where our customers' markets are going, how we can help them stem the slide or capitalize on the rise, which of our suppliers are financially vulnerable or not scalable to our next level, what supplies and materials are being exhausted on a global basis, what new products and lines are looming in our industry, how order profiles are likely to shift, and on and on.
9. Thou shalt operate under the umbrella and context of the organization. Functional understanding is a given. But the planning and execution of supply chain management (SCM) must be strategically and organizationally relevant. That translates to the entire supply chain's getting the picture—understanding that SCM is not so much about squeezing costs out of suppliers, trimming labor, or cutting inventories as about building enterprise financial performance. That is what makes SCM truly a competitive differentiator, an investment in growth and profitability, and not simply cost to be managed by beady-eyed CPAs.
10. Thou shalt require accountabilities, outcomes, objectives, and plans from all. For all the talk about styles and preferences, and no matter which is used when and with whom, all plans and assignments must conclude with clear mutual understanding of what will be done, when, at what cost, with which milestones, and with what quantified benefits. No matter the appropriate style, no matter the motivations, acceptance of the assignment with its terms and conditions is the only thing that counts—even when the assignment is a creative exercise to find the lost, to imagine the unthinkable, to solve the intractable, or to invent the unknown.
BONUS ROUND
Here are two additional commandments—no extra charge. Feel free to abide by their guidance. There are more; you may add your own to the list as well.
11. Thou shalt not live in the present. Failing to look either through the windshield or in the rear-view mirror is a shortcut to madness. Fixing today does not necessarily fix tomorrow; ignoring yesterday can obscure the solution needed today.
12. Thou shalt live in the present. Don't forget, with all the looking ahead and looking back over one's shoulder, that the customer needs the order shipped today, that a status inquiry deserves an answer today, and that an HR issue that is a flesh-eating cancer must be addressed now.
WAIT! ISN'T THIS ONE GIANT CONTRADICTION?
Well, yeah. Welcome to the real world. See, here's the deal. Success is not about finding the golden ticket that gives magical entry to Willy Wonka's factory. It is about finding the balance among the competing, yes, contradictory, forces in our work and personal lives. About being analytical enough to sort through the opposing elements, and about being street-smart enough to make good choices—and tough enough to stick with them.
A move by federal regulators to reinforce requirements for broker transparency in freight transactions is stirring debate among transportation groups, after the Federal Motor Carrier Safety Administration (FMCSA) published a “notice of proposed rulemaking” this week.
According to FMCSA, its draft rule would strive to make broker transparency more common, requiring greater sharing of the material information necessary for transportation industry parties to make informed business decisions and to support the efficient resolution of disputes.
The proposed rule titled “Transparency in Property Broker Transactions” would address what FMCSA calls the lack of access to information among shippers and motor carriers that can impact the fairness and efficiency of the transportation system, and would reframe broker transparency as a regulatory duty imposed on brokers, with the goal of deterring non-compliance. Specifically, the move would require brokers to keep electronic records, and require brokers to provide transaction records to motor carriers and shippers upon request and within 48 hours of that request.
Under federal regulatory processes, public comments on the move are due by January 21, 2025. However, transportation groups are not waiting on the sidelines to voice their opinions.
According to the Transportation Intermediaries Association (TIA), an industry group representing the third-party logistics (3PL) industry, the potential rule is “misguided overreach” that fails to address the more pressing issue of freight fraud. In TIA’s view, broker transparency regulation is “obsolete and un-American,” and has no place in today’s “highly transparent” marketplace. “This proposal represents a misguided focus on outdated and unnecessary regulations rather than tackling issues that genuinely threaten the safety and efficiency of our nation’s supply chains,” TIA said.
But trucker trade group the Owner-Operator Independent Drivers Association (OOIDA) welcomed the proposed rule, which it said would ensure that brokers finally play by the rules. “We appreciate that FMCSA incorporated input from our petition, including a requirement to make records available electronically and emphasizing that brokers have a duty to comply with regulations. As FMCSA noted, broker transparency is necessary for a fair, efficient transportation system, and is especially important to help carriers defend themselves against alleged claims on a shipment,” OOIDA President Todd Spencer said in a statement.
Additional pushback came from the Small Business in Transportation Coalition (SBTC), a network of transportation professionals in small business, which said the potential rule didn’t go far enough. “This is too little too late and is disappointing. It preserves the status quo, which caters to Big Broker & TIA. There is no question now that FMCSA has been captured by Big Broker. Truckers and carriers must now come out in droves and file comments in full force against this starting tomorrow,” SBTC executive director James Lamb said in a LinkedIn post.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.