The master supply chain builder: interview with Kathy Wengel
Recently honored with CSCMP's prestigious Distinguished Service Award, Kathy Wengel—Johnson & Johnson's top supply chain executive—has dedicated her career to building diverse teams that create world-class supply chains.
Susan Lacefield has been working for supply chain publications since 1999. Before joining DC VELOCITY, she was an associate editor for Supply Chain Management Review and wrote for Logistics Management magazine. She holds a master's degree in English.
As a child, Kathy Wengel loved to build with Lego bricks. She enjoyed selecting blocks of different sizes, shapes, and colors and then bringing them together into a unified whole.
Her job today as executive vice president and chief global supply chain officer at the health-care giant Johnson & Johnson (J&J) is not much different. For instance, she recently co-led an effort to redesign and rebuild J&J's supply chain and quality operating models. This entailed taking all of the disparate parts of the health-care company's global operations—and those of its suppliers and customers—and melding them together into an integrated process that's focused on the end customer.
Wengel and her team proved to be master builders. The redesign propelled J&J's operation into the ranks of truly world-class supply chain organizations. In 2019, the company captured the number-eight spot on the analyst group Gartner's annual "Supply Chain Top 25" list.
Wengel believes the initiative's success lies in the diverse and global supply chain teams the company has spent years building. Johnson & Johnson is committed not only to bringing people with diverse experiences and perspectives onto its teams but also to broadening those team members' perspectives by moving them through varied roles around the globe.
Wengel herself is an example of this. During her 31-year career at J&J, she has served in a variety of positions in a variety of places, including manager of manufacturing engineering at a J&J site in Puerto Rico and general manager of one of J&J's largest production facilities in Italy. She has also served as vice president of quality and compliance for the company's Europe, the Middle East, and Africa (EMEA) and Asia Pacific regions and as the corporation's first chief quality officer.
In addition to her day-to-day activities, Wengel has made time to give back to the profession. She is active in many industry organizations, including the Council of Supply Chain Management Professionals (CSCMP), the global standards organization GS1 Global, the National Association of Manufacturers, and AWESOME (Achieving Women's Excellence in Supply Chain Operations, Management, and Education).
In recognition of her service and leadership, CSCMP recently presented Wengel with its Distinguished Service Award (DSA), which honors an individual for significant, consistent, and career-long contributions to the logistics and supply chain management disciplines. She recently talked with DC Velocity Editor at Large Susan Lacefield about her career path and her vision for the profession's future.
Q: What do you see as the top challenges facing supply chain executives going into 2020, and how is Johnson & Johnson addressing those challenges?
A: In my opinion, a top challenge for every supply chain executive is a question I ask myself every day: How do we find the best talent to drive future innovations for patients, and ultimately the growth of our company? I spend more than a third of my time working on this challenge: accelerating talent development, identifying the most promising future leaders, establishing a culture of self-direction and accountability, and ensuring we equip our entire workforce with the skills and capabilities they will need for the future.
From artificial intelligence (AI) to automation and the Internet of Things, the world of supply chain is quickly evolving as technology challenges us to think bigger and innovate faster. To deliver top-quality products to our patients, customers, and consumers, our Johnson & Johnson workforce needs to include the best and brightest minds. We must also continually expand our pool with respect to diversity and experience, searching for and developing talented people from all backgrounds who have the right blend of skills, curiosity, and passion that will continue to fuel our company's innovation engine and maintain our position as a leader in the industry.
Q: What is your proudest work-related achievement, and why?
A: I'll actually give you two. The first is the excellence with which we implemented our redesigned supply chain model for J&J. Over the past decade, we have completely transformed the role of supply chain for our corporation and, more importantly, for our customers. While this journey never ends, I want to recognize our more than 50,000 supply chain associates for their fantastic work.
Second, and very much related to the first, would be building more diverse global teams at every step of my career. I've seen so many times how results are dramatically improved when you put people with different experiences, from different backgrounds, and with different perspectives together and give them a problem to solve.
We are very proud of the external recognition we've received, including being ranked this year by Gartner as one of the Top 10 supply chains in the world across all industries and the top-ranked health-care company. And I'm extremely honored and humbled at being named the recipient of the 2019 Distinguished Service Award from CSCMP. Each of these recognitions is due to the strong, dynamic, and diverse teams we have that are tackling the complex challenges that come at us in health care each day.
Q: How have things changed for women in supply chain management since you entered the profession? What further changes would you like to see?
A: Over the years, I have seen an increase in the number of women in supply chain management roles and supply chain overall, but there are still too few of us in leadership positions. This is reflected in the very small percentage of women (approximately 5%) who occupy the top supply chain spot in Fortune 500 companies. Supply chain is such an interesting and exciting place to be, and there are many talented women leading and innovating—I know thousands of them! We can all do a better job in telling that story and supporting younger women who have the interest and drive to succeed in this space.
I'm very proud to have a gender-balanced (50/50) globally diverse supply chain leadership team here at Johnson & Johnson. We need visible and vocal women in supply chain roles who can inspire the next generation of supply chain and STEM2D (science, technology, engineering, math, manufacturing, and design) professionals. That is why I dedicate a portion of my time to serving as the executive sponsor of Johnson & Johnson's "Women's Leadership & Inclusion" and "Women in STEM2D" initiatives.
Q: What advice would you give someone who's just starting a career in supply chain management?
A: I'm asked this question a lot, and I've realized that the lessons we learn early on in our careers will influence the way we work and lead teams, often for decades. I always encourage people to ask lots of questions to help understand the overall context of a situation and where it sits in the priorities of the business and our customers. I certainly asked a lot of questions at the beginning of my career, and my team can confirm for you that I still do today! By hearing what others have to say, on the corporate level, on the manufacturing lines, and especially on the customer side, we can gain a better understanding of the vast health-care landscape and make decisions that are in the best interest of the company and our employees.
More specifically, I'd tell a newcomer that when an interesting opportunity presents itself, raise your hand! I'm an advocate of stepping outside of your comfort zone and taking opportunities or positions that may seem different or unusual; in my experience, that's when you learn the most. Each new opportunity and relocation pushed me to new perspectives and helped me to grow as a leader. Those are the moments that define you, teach you, and set you apart from others.
Q: You're active in a number of industry associations and university programs. Why do you feel that's important?
A: It is critical to spend part of your time outside of your own organization's walls. We do not exist in a vacuum. We're part of a vast—and constantly evolving—global health-care ecosystem, where the effects of even minor regulatory or process changes can reverberate throughout our operations.
That is why I'm proud to serve as chairman of the board of GS1 Global, an organization that sets and maintains global standards for the exchange of critical business data to ensure patient safety and supply chain efficiency. I also sit on the board of the National Association of Manufacturers in the U.S. and am on the advisory board of AWESOME. And I very much enjoy spending time with university students getting ready to embark on supply chain careers.
I see all of these activities as part of my responsibility as a leader to find and support the next generation of supply chain leaders. They are the ones who will usher in the next technology breakthroughs to meet the changing needs of a market that we can only imagine today.
Penske said today that its facility in Channahon, Illinois, is now fully operational, and is predominantly powered by an onsite photovoltaic (PV) solar system, expected to generate roughly 80% of the building's energy needs at 200 KW capacity. Next, a Grand Rapids, Michigan, location will be also active in the coming months, and Penske's Linden, New Jersey, location is expected to go online in 2025.
And over the coming year, the Pennsylvania-based company will add seven more sites under its power purchase agreement with Sunrock Distributed Generation, retrofitting them with new PV solar systems which are expected to yield a total of roughly 600 KW of renewable energy. Those additional sites are all in California: Fresno, Hayward, La Mirada, National City, Riverside, San Diego, and San Leandro.
On average, four solar panel-powered Penske Truck Leasing facilities will generate an estimated 1-million-kilowatt hours (kWh) of renewable energy annually and will result in an emissions avoidance of 442 metric tons (MT) CO2e, which is equal to powering nearly 90 homes for one year.
"The initiative to install solar systems at our locations is a part of our company's LEED-certified facilities process," Ivet Taneva, Penske’s vice president of environmental affairs, said in a release. "Investing in solar has considerable economic impacts for our operations as well as the environmental benefits of further reducing emissions related to electricity use."
Overall, Penske Truck Leasing operates and maintains more than 437,000 vehicles and serves its customers from nearly 1,000 maintenance facilities and more than 2,500 truck rental locations across North America.
That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.”th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.
In response, most retailers (78%) say they are investing in technology tools that can help both frontline workers and those watching operations from behind the scenes to minimize theft and loss, Zebra said.
Just 38% of retailers currently use AI-based prescriptive analytics for loss prevention, but a much larger 50% say they plan to use it in the next 1-3 years. That was followed by self-checkout cameras and sensors (45%), computer vision (46%), and RFID tags and readers (42%) that are planned for use within the next three years, specifically for loss prevention.
Those strategies could help improve the brick and mortar shopping experience, since 78% of shoppers say it’s annoying when products are locked up or secured within cases. Adding to that frustration is that it’s hard to find an associate while shopping in stores these days, according to 70% of consumers. In response, some just walk out; one in five shoppers has left a store without getting what they needed because a retail associate wasn’t available to help, an increase over the past two years.
The survey also identified additional frustrations faced by retailers and associates:
challenges with offering easy options for click-and-collect or returns, despite high shopper demand for them
the struggle to confirm current inventory and pricing
lingering labor shortages and increasing loss incidents, even as shoppers return to stores
“Many retailers are laying the groundwork to build a modern store experience,” Matt Guiste, Global Retail Technology Strategist, Zebra Technologies, said in a release. “They are investing in mobile and intelligent automation technologies to help inform operational decisions and enable associates to do the things that keep shoppers happy.”
The survey was administered online by Azure Knowledge Corporation and included 4,200 adult shoppers (age 18+), decision-makers, and associates, who replied to questions about the topics of shopper experience, device and technology usage, and delivery and fulfillment in store and online.
Supply chains are poised for accelerated adoption of mobile robots and drones as those technologies mature and companies focus on implementing artificial intelligence (AI) and automation across their logistics operations.
That’s according to data from Gartner’s Hype Cycle for Mobile Robots and Drones, released this week. The report shows that several mobile robotics technologies will mature over the next two to five years, and also identifies breakthrough and rising technologies set to have an impact further out.
Gartner’s Hype Cycle is a graphical depiction of a common pattern that arises with each new technology or innovation through five phases of maturity and adoption. Chief supply chain officers can use the research to find robotic solutions that meet their needs, according to Gartner.
Gartner, Inc.
The mobile robotic technologies set to mature over the next two to five years are: collaborative in-aisle picking robots, light-cargo delivery robots, autonomous mobile robots (AMRs) for transport, mobile robotic goods-to-person systems, and robotic cube storage systems.
“As organizations look to further improve logistic operations, support automation and augment humans in various jobs, supply chain leaders have turned to mobile robots to support their strategy,” Dwight Klappich, VP analyst and Gartner fellow with the Gartner Supply Chain practice, said in a statement announcing the findings. “Mobile robots are continuing to evolve, becoming more powerful and practical, thus paving the way for continued technology innovation.”
Technologies that are on the rise include autonomous data collection and inspection technologies, which are expected to deliver benefits over the next five to 10 years. These include solutions like indoor-flying drones, which utilize AI-enabled vision or RFID to help with time-consuming inventory management, inspection, and surveillance tasks. The technology can also alleviate safety concerns that arise in warehouses, such as workers counting inventory in hard-to-reach places.
“Automating labor-intensive tasks can provide notable benefits,” Klappich said. “With AI capabilities increasingly embedded in mobile robots and drones, the potential to function unaided and adapt to environments will make it possible to support a growing number of use cases.”
Humanoid robots—which resemble the human body in shape—are among the technologies in the breakthrough stage, meaning that they are expected to have a transformational effect on supply chains, but their mainstream adoption could take 10 years or more.
“For supply chains with high-volume and predictable processes, humanoid robots have the potential to enhance or supplement the supply chain workforce,” Klappich also said. “However, while the pace of innovation is encouraging, the industry is years away from general-purpose humanoid robots being used in more complex retail and industrial environments.”
An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.
According to Hakala, automation is an inevitable course in Cimcorp’s core sectors, and the company’s end-to-end capabilities will be crucial for clients’ success. In the past, both the tire and grocery retail industries have automated individual machines and parts of their operations. In recent years, automation has spread throughout the facilities, as companies want to be able to see their entire operation with one look, utilize analytics, optimize processes, and lead with data.
“Cimcorp has always grown by starting small in the new business segments. We’ve created one solution first, and as we’ve gained more knowledge of our clients’ challenges, we have been able to expand,” Hakala said in a release. “In every phase, we aim to bring our experience to the table and even challenge the client’s initial perspective. We are interested in what our client does and how it could be done better and more efficiently.”
Although many shoppers will
return to physical stores this holiday season, online shopping remains a driving force behind peak-season shipping challenges, especially when it comes to the last mile. Consumers still want fast, free shipping if they can get it—without any delays or disruptions to their holiday deliveries.
One disruptor that gets a lot of headlines this time of year is package theft—committed by so-called “porch pirates.” These are thieves who snatch parcels from front stairs, side porches, and driveways in neighborhoods across the country. The problem adds up to billions of dollars in stolen merchandise each year—not to mention headaches for shippers, parcel delivery companies, and, of course, consumers.
Given the scope of the problem, it’s no wonder online shoppers are worried about it—especially during holiday season. In its annual report on package theft trends, released in October, the
security-focused research and product review firm Security.org found that:
17% of Americans had a package stolen in the past three months, with the typical stolen parcel worth about $50. Some 44% said they’d had a package taken at some point in their life.
Package thieves poached more than $8 billion in merchandise over the past year.
18% of adults said they’d had a package stolen that contained a gift for someone else.
Ahead of the holiday season, 88% of adults said they were worried about theft of online purchases, with more than a quarter saying they were “extremely” or “very” concerned.
But it doesn’t have to be that way. There are some low-tech steps consumers can take to help guard against porch piracy along with some high-tech logistics-focused innovations in the pipeline that can protect deliveries in the last mile. First, some common-sense advice on avoiding package theft from the Security.org research:
Install a doorbell camera, which is a relatively low-cost deterrent.
Bring packages inside promptly or arrange to have them delivered to a secure location if no one will be at home.
Consider using click-and-collect options when possible.
If the retailer allows you to specify delivery-time windows, consider doing so to avoid having packages sit outside for extended periods.
These steps may sound basic, but they are by no means a given: Fewer than half of Americans consider the timing of deliveries, less than a third have a doorbell camera, and nearly one-fifth take no precautions to prevent package theft, according to the research.
Tech vendors are stepping up to help. One example is
Arrive AI, which develops smart mailboxes for last-mile delivery and pickup. The company says its Mailbox-as-a-Service (MaaS) platform will revolutionize the last mile by building a network of parcel-storage boxes that can be accessed by people, drones, or robots. In a nutshell: Packages are placed into a weatherproof box via drone, robot, driverless carrier, or traditional delivery method—and no one other than the rightful owner can access it.
Although the platform is still in development, the company already offers solutions for business clients looking to secure high-value deliveries and sensitive shipments. The health-care industry is one example: Arrive AI offers secure drone delivery of medical supplies, prescriptions, lab samples, and the like to hospitals and other health-care facilities. The platform provides real-time tracking, chain-of-custody controls, and theft-prevention features. Arrive is conducting short-term deployments between logistics companies and health-care partners now, according to a company spokesperson.
The MaaS solution has a pretty high cool factor. And the common-sense best practices just seem like solid advice. Maybe combining both is the key to a more secure last mile—during peak shipping season and throughout the year as well.