In our continuing series of discussions with top supply-chain company executives, Marc Althen discusses discusses Penske's role as a third-party logistics service provider and the market outlook for 2020.
Marc Althen is president of Penske Logistics. Althen began his career as a project engineer with Chevron. He came to Penske following Penske's 1988 merger with Gelco Truck Leasing, where Althen had served as a construction director. His first role with Penske was to manage the environmental services department. During the next 20-plus years, Althen took on positions of increasing responsibility, including vice president of environmental services and vice president of administration.
In 2004, he was named senior vice president of administration and procurement for Penske Truck Leasing. In that role, he was responsible for real estate, facilities, energy, telecommunications, vehicle supply, vehicle remarketing, and non-vehicle procurement.
Althen is a member of the Council of Supply Chain Management Professionals and sits on the board of Fleetwash, a company that is majority-owned by Transportation Resource Partners. He is also a board member for several charitable and cultural organizations in the Reading, Pennsylvania, area. He holds a bachelor's degree in chemical engineering from the University of Kentucky.
Q: For those not familiar with your company, can you describe the work of Penske Logistics?
A: We are a third-party logistics provider servicing the automotive, food and beverage, industrial, manufacturing, and consumer packaged goods industries. The majority of our business is operated throughout North America, and we provide six primary services: distribution center management, dedicated contract carriage, regional truckload services, transportation management, lead logistics provider, and freight brokerage.
Q: How do you view the current transportation market and the prospects for 2020?
A: We are cautiously optimistic. We know there is excess trucking capacity in the market, and therefore there are rate pressures. We are also still experiencing a truck-driver shortage, and at Penske Logistics, we are acting on strategies to ensure that we are hiring the best drivers available.
Today, we see more customers and prospects reaching out to us specifically around the main services we offer—transportation management, dedicated contract carriage, and distribution management. Customers are looking to optimize their networks in an effort to reduce their costs. We are always striving to exceed our customers' expectations, and that's what helps us build trust and win business.
Q: What are the advantages of coming to a company like Penske that offers both warehousing and transportation as well as brokerage and other supply chain services?
A: Shippers look to Penske Logistics for business outcomes—rather than products. They are seeking to better serve their customers, which includes their external customers as well as the internal customers or stakeholders that interact with their supply chain team and processes. They want to improve their cost of operations, as measured by KPIs and financial statements. Our ability to incorporate the people, skills, systems, and resources from across our various product lines into a unique solution to meet their very specific needs—ultimately, the ability to deliver a compelling solution—is what keeps them coming back to Penske.
Q: How are your technology investments at Penske helping you to better serve your customers?
A: The market for supply chain software is growing rapidly. Both established players and start-ups are enhancing their platforms and creating new offerings at a rapid pace. For shippers, off-the-shelf software is difficult to configure to meet the needs of their industry, and shippers are struggling to separate the hype from reality in the burgeoning tech space.
IT talent with experience in supply chain systems is very limited, and shippers' internal IT departments, while skilled, tend to be committed to implementing new digital strategies, not supply chain systems. Penske brings best-in-class platforms, speed of implementation, seasoned IT practitioners, and commitments to measureable results that supply chain executives find attractive.
Over the years, Penske Logistics has acquired and implemented the best commercially available software on the market. This is the same software any shipper or third-party logistics service provider can buy. However, Penske has taken additional steps to customize and develop a proprietary solution—the Penske ClearChain technology suite. We've drawn on our experience to invest in the right tools to drive visibility and insight into the supply chain. This includes portals, analytics, dashboards, scorecards and mobile tools. Penske developers have created dozens of supporting applications, informed by our experience working with customers. These apps are integrated with our core systems, offering users a seamless experience.
Q: You have a background working in environmental services. How have you been able to promote sustainability in your role as president of Penske Logistics?
A: We are constantly evaluating and implementing the newest and best technology to drive sustainability in our fleet and logistics operations. On a daily basis, we continue to optimize customer shipments in a variety of ways, and to operate and maintain cutting-edge trucks. That's why for the fourth time this decade, Penske Logistics was honored by the U.S. Environmental Protection Agency for its sustainability efforts, collecting a 2019 SmartWay Excellence Award in the Truck Carrier category. Penske Logistics also attained SmartWay awards in 2018, 2017, and 2013. We are one of 55 truck and multimodal carriers to receive this distinction, representing the best environmental performers of SmartWay's 3,700 partners.
Q: What value to you feel Penske brings to its customers?
A: At the end of the day, we all know that relationships play an important role and it is critical to be a trusted adviser. That's why we are always striving to challenge the status quo and exceed our customers' expectations day in and day out. Some people consider it to be cliché to say that it's our people who make the difference in our solutions, but we don't. We continue to invest in our talent.
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]."