Serving the youth a balanced diet: interview with Gregory R. Heim
Feeding tomorrow's talent pipeline is perhaps the most important job of the 21st century educator. Gregory Heim's role is to show students how the fusing of technology and operations management skills can be the recipe for success.
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
Gregory Heim of Texas A&M's Mays Business School is helping to train the next generation of supply chain professionals.
It is no secret the supply chain management field is short of talent,
and acutely short of talent in the areas that matter, such as high-tech and operations management. Schools like Texas A&M University are looked at to supply an ever-increasing flow of graduates into the field. But graduating with a degree is one thing. Graduating with the skills that fit the employment demand in 2017 and beyond is another.
That's where Gregory Heim comes in. Heim, associate professor in the department of information and operations management at Texas A&M's Mays Business School, brings decades of academic knowledge to the very real-world challenge of utilizing information technology to enable more efficient and productive DC operations. Because he works in a university setting, a large part of Heim's work involves nurturing supply chain management (SCM) talent and positioning students to prosper in a field that requires operations know-how and interpersonal skills along with IT knowledge.
Heim recently spoke with Mark B. Solomon, DCV's executive editor-news, about his mission, the opportunities that await young people and the obstacles that impede the academic-business pipeline, and why he calls himself an "IT curmudgeon."
Q: Can you describe the areas of research you are currently focusing on?
A: My research examines the impact of IT on manufacturing, service delivery, and supply chains. I studied e-retailers for my Ph.D. Later, I analyzed manufacturer ERP (enterprise resource planning) performance, collaboration IT for product development, RFID (radio-frequency identification), and retailer systems. After years of teaching my "IT for SCM" course, I realized that key topics were not being addressed. I wrote cases on CPFR (Collaborative Planning, Forecasting, and Replenishment), cloud services, "big data" analytics, warehouse management software, transportation management systems, electronic logging devices (ELDs) for trucks, and others.
Today, I am a department editor for technology management at the Journal of Operations Management. We encourage researchers to study manufacturing and logistics technologies such as 3-D printing, drones, driverless vehicles, and multimodal tracking.
Q: Technology's impact on supply chains has been profound. In some cases, the technology has sprinted ahead of the users' ability to fully utilize it. What are the main challenges for companies in getting their arms around technology?
A: An irony of technology management is that once managers resolve one set of process problems, an even more fine-grained level of precision and technological detail might need to be considered. I try to ensure that students recognize these issues are part of a non-ending cycle, so they will appreciate the difficulty of the task.
I hope students realize that technology choice and implementation activities are extremely challenging and human-impacting decisions. I cannot provide students with answers for all future IT project challenges. Yet if my students gain an appreciation of, and respect for, the many managerial challenges, they can be responsible managers who will reasonably address such challenges.
Q: What is the most important effect that e-commerce is having on facility design and operations management?
A: Modern e-commerce customer expectations and delivery requirements appear to enhance the pain of existing facility pain points. During my Ph.D. research in the late 1990s, I studied e-retailers in the food industry. The facilities we toured had simple layouts. The startup operations were not huge. E-commerce operations were designed to be separate from regular operations. Executives envisioned e-commerce division IPOs (initial public offerings). The scale of e-commerce often didn't match the rest of a firm's operations.
Early retailers that built well-integrated omnichannel systems have become difficult to catch up to. The e-commerce operations having troubles today suffered from design problems that have led to classic IT silo challenges. When touring traditional retailer DCs, I have seen such issues manifested as piles of packages hand-picked from the racks, waiting for carriers to pick them up for delivery to e-retail customers. The pile of e-commerce packages is a signal to me that the assumptions surrounding facility design and operations management should be reconsidered.
Q: There has been much discussion about the dearth of talent entering the warehouse/DC world for system design and maintenance. Has there been progress in increasing the supply of talent to meet the demand? If not, what needs to be done?
A: Universities have seen a huge increase in student interest in supply chain management jobs of all sorts. A decade ago, our program had 15 students. After the Great Recession, industry wanted more SCM hires. Students started to check out the field. Now, we have 350 to 400 students. Probably half take jobs in SCM system design and maintenance. The SCM major has the second-highest average salary at our school. We joke that it happened because we are great professors. However, this phenomenon has occurred at many universities.
Despite all that, we still face challenges with regard to staffing warehouse and DC managerial positions. Federal rules limit our ability to share student names and data with hiring managers. Companies hiring for DC positions offer below-market salaries, don't provide much training or a career development path, want guarantees that students will stay a long time, and want hires to immediately manage huge numbers of forklift drivers or pickers/packers.
Q: What is the blowback, and how can it be prevented?
A: Employers scare away potential hires. New hires are overwhelmed by lack of training or mismatched expectations about job responsibilities. It is a very competitive marketplace for warehouse/DC and SCM talent, even with larger talent pools. Students today spread word quickly via social media about what a company offers (salary and training). If it is below par, they move on en masse to other opportunities.
To address the situation, firms might create long-term relationships with targeted university programs. Many SCM professors love to create such relationships because it means career opportunities for students. Yet hiring managers show up irregularly, or they terminate a relationship if they have an instance where a new hire leaves. Doing so impedes the conversations regarding students who are truly appropriate for a DC position.
Firms might also develop training programs specifically for warehouse/DC system design and maintenance. Really, such positions are exciting internal consulting roles. Students recognize the value of learning that takes place during such a project. Hiring managers could communicate that value to students in an enticing way.
Q: Those entering the field today have grown up around all things digital, including commerce. Will that play a role in their ability to master the fulfillment work that relies so heavily on technology?
A: Today's generation has a very different IT experience due to its immersion in consumer technology. Students are more open to and familiar with emerging technologies and digital services. For the most part, they are technology optimists and pragmatic users. I expect these perspectives will lead to very different ways to buy, build, and adapt to workplace IT systems. It will also be a key factor in how they approach the management of fulfillment systems.
It's impressive how many of today's students, when asked to brainstorm solutions to an SCM problem, divine very creative potential solutions. While they are perhaps a little naïve about how easy it is to get new IT systems to work in a diverse corporate environment, their innate comfort with technology shifts, social IT, mobile IT, and instant messaging sets them up well for flexibly adapting SCM systems to ongoing structural changes in world economies.
Q: Do you see 2017 as the year when "disruptive technologies" move beyond the discussion board and into implementation? If so, what are one or two technologies that will change the game this year?
A: I'm an IT curmudgeon. I'm old enough to have experienced many waves of claims about "disruptive technology." Some of the IT has been "emerging" and "disruptive" since the 1990s. Many so-called disruptive technologies seem to be VC (venture capital)-funded nonsense, searching for a use case and hoping for an IPO. Academic researchers define "disruptive" in a scientific manner and only truly know what was disruptive after the fact. So I'd be pandering if I made predictions.
Q: What technology is overhyped?
A: All technology is overhyped to some extent. One principle I try to convey to students is to maintain a healthy skepticism about vendor and consultant promises. Many sell IT simply to book business. They focus on hype rather than on genuine process improvement.
As overhyped, I'd suggest "The Cloud" and "Big Data." Salespeople seem to promote every online service as "The Cloud." Universities promote "Big Data" analytics, when what sometimes is delivered is basic statistics. The principle of caveat emptor (let the buyer beware) applies here. I smirk when I hear consultants say, "We help our clients move their Big Data into The Cloud, and The Cloud then generates..." Few firms have such data. As a researcher, I know how challenging it is to create insights via data analysis. "The Cloud" does not magically do this stuff. Fundamentally, we are talking about human tasks, human research, and human process changes.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”