In our continuing series of discussions with top supply-chain company executives, Bart Cera of Vargo discusses the advantages of waveless fulfillment and the importance of strategic partnerships.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
When Bart Cera left the banking industry in 2006 to join Vargo, he was intrigued by the challenges and opportunities he would find in the material handling industry. First joining as the CFO/COO, he is now president and chief operating officer for Vargo, a company that specializes in material handling systems integration, warehouse execution software, and equipment solutions for fulfillment and distribution centers.
Cera’s previous experiences in the financial sector were with Emerald Bank, Ohio Central Savings, and American Share Insurance. He is a certified public accountant and holds a bachelor’s degree in finance from Bowling Green State University in Ohio.
Q: You came out of the banking industry. What led you to take a job at a supply chain company?
A: There’s an old adage that says it’s not necessarily what you know, but who you know, and that helps explain how I wound up here. My background was in finance and accounting, and focused on banking up to the time I joined Vargo. My last endeavor was chartering a new startup bank that was sold, and given the probable loss of management control that comes with these types of acquisitions, I reached out to my professional business mentor to let him know I might be open to exploring other opportunities.
Well, timing is everything, as they say, and he introduced me to the Vargo family and the uniqueness (at least to me at the time) of their business. They had just acquired a specialty distribution software group out of Austin, Texas, and Berkeley, California, and because of their growth, they were looking for a CFO/COO to help organize and run the business. My passion lives in connecting finance to the operational aspects of the business, and I felt the opportunity to learn an entirely new industry essentially from scratch was too good to pass up. As you can imagine, I initially felt like a fish out of water, but I relied on my finance background and, connecting that to the underlying business processes, I was able to quickly learn to swim in the new pond of material handling/automated equipment, systems integration, and warehouse execution software.
Q: How do you view the state of the warehouse automation and software markets?
A: Unfortunately, during the Covid pandemic, supply chains quickly became compromised, and the “retail sourcing” of goods and products to consumers was nearly non-existent or significantly reduced for long periods of time in 2020. While recovery is underway, many brick-and-mortar retailers have been harmed beyond repair or continue as shadows of their former selves.
This impact has challenged retail sellers of goods to refocus on their e-commerce or omnichannel facilities and to rethink their fulfillment processes. The old days of throwing labor at it and muscling through spikes in demand are over.
Today’s leading supply chain executives are showing an increased appetite for warehouse automation (including robotics) as well as more upstream and execution-level software intelligence to facilitate both increased processing volumes and increased fulfillment speed. It is an exciting time in our industry right now, and we couldn’t be happier with our company’s successes to date and our positioning to help distribution professionals with these accelerated challenges.
Q: As a consulting, design, and integration firm, Vargo is agnostic when it comes to selecting equipment for its solutions. What are the benefits of that for your clients?
A: Among other advantages, being equipment and technology agnostic gives Vargo a lot of flexibility in designing our systems and, at the same time, affords us the ability to better meet client budgets. We are not married to a particular technology or OEM manufacturer, nor forced to only design and sell from one provider’s playbook like our direct OEM competition. Furthermore, the focus of our designs is on the people, the processes, and then the equipment/technology (in that order). Fulfillment systems need to be easy to run and the processes undertaken able to meet the desired operating requirements, first and foremost. The addition of equipment or a specific technology is merely the vehicle used to support (or optimize) the process. By being an agnostic equipment provider, we can source the best equipment (or technology) to fit the process, rather than forcing the process to fit the equipment. This is one of the most important factors driving systems integrator businesses like ours.
Q: Vargo has long been an advocate of waveless fulfillment. What are the main advantages of that?
A: The main advantage of waveless (or continuous flow) fulfillment is that it allows a facility to consistently and continuously work at maximum processing rate and avoid ebbs and flows in productivity levels. It does this by organizing and controlling the flow of product through the facility in such a way that lines/SKUs (stock-keeping units) required for an order are all delivered independently of each other at as close to the same time as possible (typically, less than 20 minutes, on average, in our high-volume e-commerce facilities).
As a result, these order consolidation points turn more frequently than traditionally, which, in turn, allows for more throughput and a much higher adherence to SLA (service-level agreement) requirements. There are other significant benefits of waveless/continuous processing as well, such as reduced facility footprint and equipment capital requirements; automated exception handling built into the process; the fact that supervisors are responsible only for managing people and not managing the process, etc.
Q: In the past year, you’ve formed a number of strategic partnerships with robotics firms, including Kindred and Fetch Robotics. Why did you target partnerships in robotics, and what do you hope to gain from them?
A: With the impact of Covid-19 on e-commerce demand and today’s emphasis on social distancing requirements, automation no longer is an enhancement to the operation but rather a requirement, in many cases. A common theme we hear from our clients is that they have three big problems to solve with respect to fulfillment: labor, labor, and labor. We see robotics (and goods-to-person) technologies being a significant option for reducing or limiting the need for labor in facilities given the “physicalness” required to receive product, put it away, pick it, pack it, and ship it.
Furthermore, we do not believe any one company can be great at everything. So, we have taken this partnership approach to align our company with solid robotic providers that focus solely on a core mission of promoting and enhancing—mechanically and programmatically—the robot itself. This allows the experts in distribution (like Vargo) to handle the actual deployments—applying the robotics to the right operational fulfillment process and then integrating them seamlessly into the final engineered system.
From a partnership perspective, a more formal arrangement of working together allows our respective teams to work closely together on common interfaces, prototyping “use case” applications, creating mutual testing “sandboxes,” providing exposure to our respective clients, etc. This way, we can mutually drive more interest in these technologies and deploy more quickly upon sale.
Q: Do you anticipate more interest in major projects this year?
A: We do! The activity level and interest in supply chain and distribution is like nothing I’ve seen in my 14 years with Vargo. Most multichannel retailers, I believe, are re-evaluating their supply chains and scrambling for either equipment and/or new facilities to handle the increased e-commerce demand. Others are exploring converting retail-operations focused buildings (where demand has fallen away) to more omnichannel-based or e-comm facilities.
Furthermore, there is a lot of interest in moving away from a centralized fulfillment network (one or two nodes) to a more regional fulfillment approach. This shift to regionalized fulfillment allows for a lot of the larger facility operating benefits, and it brings the product closer to the consumer to compete with the speed of Amazon, optimizes freight, and spreads labor needs over more geographies. It is an exciting time to be in the fulfillment and distribution business.
Q: Are you working on any current projects or products that you wish to share?
A: We have several large client initiatives underway for 2021 and 2022. Vargo’s warehouse execution software, COFE (Continuous Order Fulfillment Engine), continues to garner significant industry interest coming off yet another year of record-setting peak volumes across our clients. This, together with the rollout of a new cloud-based COFE option (reducing client-based IT requirements), the partnerships with robotics companies I mentioned earlier, and our early 2020 partnership with a cloud-based warehouse management software provider (Koerber, formerly HighJump), is why we are so excited about what the future holds.
Women in supply chain tech don’t always have it easy. That’s particularly true when it comes to building a career in the male-dominated field, where they may face gender bias, limited advancement opportunities, and a lack of mentorship and support.
“Across many professional industries, women have made strides in breaking down barriers; however, supply chain and digital technology are two sectors that are often seen as being male-dominated,” Stephan de Barse, o9’s chief revenue officer, said in a release. “Through the o9 Minerva community, we aim to elevate the incredible knowledge, drive, and experiences of women working in the supply chain space.”
The new group will host networking events and panel discussions that feature expert guidance from “Minerva Ambassadors,” high-ranking professionals who will discuss their career paths and experiences within the supply chain and digital tech space. During the events, Minerva Ambassadors will also address key career advancement challenges, such as gender disparity, access to mentorship and sponsorship opportunities, and the opportunity for more diversity in leadership roles.
“As a supply chain risk management (SCRM) expert and Minerva Ambassador, I am excited to share my own professional journey alongside fellow supply chain leaders and speak to some of the unique challenges that women face as they advance their careers,” Lara Pedrini, global head of sales at risk-management tech company Exiger, said. “I am committed to the advancement of women in the workplace and digital tech, and look forward to discussing ways to close the gender gap for women in STEM fields and foster more inclusive corporate policies and work environments where women can thrive.”
Some of Americans’ favorite condiments include ketchup, salsa, barbecue sauce, and sriracha. Toppings like marinara and pizza sauce are popular as well. The common denominator here is the tomato, and food producers need many tons of them to make these and other tasty products.
One of those producers is Red Gold, an Elwood, Indiana, company whose brands include Red Gold, Redpack, Tuttorosso, Sacramento, Vine Ripe, and Huy Fong. The company works with more than 30 family-owned Midwestern farms to source sustainably managed crops.
In the 80 years since its founding, Red Gold has grown to become the largest privately held manufacturer of tomato products in the U.S., with 23 different product categories and nearly 400 combinations of flavors and cuts. Today, it serves both the grocery market and institutional customers like schools and hospitals.
But a food supply chain of this scale can be expensive to operate. So Red Gold recently launched an initiative to modernize its logistics processes with an eye toward boosting efficiency and increasing resilience while also cutting costs.
The timing was right for such a project. Freight rates in the trucking sector have been depressed for nearly two years, giving the company a rare opportunity to invest some of its savings into process improvements, the company said. “The current transportation market is extremely shipper-friendly and has been for the past 18 months,” James Posipanka, Red Gold’s supply chain manager–logistics, said in a press release. “Now is the time for us to plan and prepare for when it swings the other way and carriers can choose which customers they want to work with. When that happens, we want to be a ‘Shipper of Choice.’ By putting strategies and processes in place now, we’ll be successful when the market does flip.”
STEP-BY-STEP SAVINGS
For help streamlining its processes, the company turned to Loadsmart, a Chicago-based logistics technology developer that specializes in helping clients optimize freight spend, increase efficiency, and enhance service quality. Step by step, Red Gold began implementing three of Loadsmart’s technologies and digital services, moving to the next phase only after it had realized a return on its investment in the previous one.
First, Red Gold implemented Opendock, Loadsmart’s online dock-scheduling platform. That move alone saved thousands of hours of staff time by eliminating the need to make carrier pickup appointments via phone and email. Today, 100% of the carriers that do business at Red Gold’s facilities book their appointments through Opendock—which amounts to some 60,000 appointments annually. Among other benefits, the new platform has drastically reduced the amount of time it takes for a carrier to book an appointment—with Opendock, appointments are scheduled one to two days out instead of 10 or more.
Second, the company installed Loadsmart’s ShipperGuide TMS, a transportation management and request-for-proposal (RFP) management system. The platform helps Red Gold avoid spreadsheets and administrative work. For example, instead of individually emailing RFPs to a few carriers, the company can now send RFPs through the TMS to many more carriers than was feasible in the past and easily compare the rates carriers submit in response. In addition, Red Gold was able to automate some 70% of its load tenders, or about 25,000 shipments, which allowed the company to reduce headcount without any interruptions in workflow.
Third, Red Gold began working with Loadsmart’s digital freight brokerage team to convert some of its full truckload movements to partial truckloads. That move expanded both its carrier base and its freight mode options, saving it $200,000 annually.
All in all, since it began using Loadsmart’s technology and services, Red Gold has reduced appointment leadtimes by 90% and saved 17% on annual LTL freight costs, according to the two companies. Red Gold is so pleased with those results that its logistics team has already begun working with the technology vendor on additional opportunities for improvement.
With that money, qualified ports intend to buy over 1,500 units of cargo handling equipment, 1,000 drayage trucks, 10 locomotives, and 20 vessels, as well as shore power systems, battery-electric and hydrogen vehicle charging and fueling infrastructure, and solar power generation.
For example, funds going to the Port of Los Angeles include a $412 million grant to support its goal of achieving 100% zero-emission (ZE) terminal operations by 2030. And following the award, the Port and its private sector partners will match the EPA grant with an additional $236 million, bringing the total new investment in ZE programs at the Port of Los Angeles to $644 million. According to the Port of Los Angeles, the combined new funding will go toward purchasing nearly 425 pieces of battery electric, human-operated ZE cargo-handling equipment, installing 300 new ZE charging ports and other related infrastructure, and deploying 250 ZE drayage trucks. The grant will also provide for $50 million for a community-led ZE grant program, workforce development, and related engagement activities.
And the Port of Oakland received $322 million through the grant, which will generate a total of nearly $500 million when combined with port and local partner contributions. Altogether, that total will be the largest-ever amount of federal funding for a Bay Area program aimed at cutting emissions from seaport cargo operations. The grant will finance 663 pieces of zero-emissions equipment which includes 475 drayage trucks and 188 pieces of cargo handling equipment.
Likewise, the Port of Virginia said its $380 million in new funding will help to reach its goal of eliminating all greenhouse gas emissions by 2040. The grant money will be used to buy and install electric assets and equipment while retiring legacy equipment powered by engines that burn gasoline or diesel fuel.
According to AAPA, those awards will demonstrate to Congress that the Clean Ports Program should become permanent with annual appropriations. Otherwise, they would soon cease to be funded as backing from the Inflation Reduction Act (IRA) comes to a close, AAPA said. “From the earliest stages of legislative development in Congress, America’s ports have been ecstatic about and committed to the vision of implementing a novel grant program for the port industry that will complement and strengthen existing plans to diversify how we power our ports,” Cary Davis, AAPA’s president and CEO, said in a release. “These grant funding awards will usher in a cleaner and more resilient future for our ports and national transportation system. We thank our champions in Congress and the Biden-Harris Administration for committing to us and we look forward to working closely with our Federal Government partners to get these funds quickly deployed and put to work.”
The majority of American consumers (86%) plan to reduce their holiday shopping budgets this year, with nearly half (47%) expecting to cut spending by more than 50% compared to last year, according to consumer research from Relex Solutions.
The forecast runs against some other studies that predict the upcoming holiday shopping season will be a stronger than last year, with higher sales and earlier shopping than 2023.
But Finland-based Relex says its conclusion is based on the shorter holiday shopping period of 27 days in 2024 (five days shorter than 2023), combined with economic volatility and supply chain disruptions. The research includes survey responses from 1,000 U.S. consumers in October 2024.
According to Relex, those results reveal a complex landscape where price sensitivity and decreased brand loyalty are reshaping traditional retail dynamics. That means retailers and manufacturers must carefully balance promotional strategies with profitability while maintaining product availability, since consumers are actively seeking better value and may switch between brands more readily.
"Retailers are facing a highly challenging season, with consumers prioritizing value more than ever. To succeed, retailers must not only offer attractive promotions but also ensure those deals don’t erode their margins. At the same time, manufacturers need to optimize their operations and collaborate with retailers to deliver value without sacrificing profitability," Madhav Durbha, Relex’ group vice president of CPG and Manufacturing, said in a release. The company says it provides a supply chain and retail planning platform that optimizes demand, merchandising, supply chain, operations, and production planning.
"This holiday season represents a critical juncture for the retail industry," Durbha added. "With reduced brand loyalty and a shorter shopping window, there’s no room for error. Retailers and manufacturers need to work together closely, leveraging AI-powered tools to anticipate demand, manage inventory, and run effective promotions," Durbha said.
In additional findings, the survey found:
Brand loyalty is eroding: About 45% of consumers say they're less likely to remain loyal to brands without meaningful discounts, while 41% will switch brands if faced with both poor deals and out-of-stock products.
Digital channels dominate deal-seeking behavior: Store and brand apps (60%) and email promotions (60%) are the primary channels for finding deals, while only 32% of consumers primarily search for deals in physical stores.
Supply chain concerns remain significant: Nearly 85% of shoppers express concern about potential disruptions, with electronics (60%) and clothing/accessories (57%) being the categories of highest concern.
Age significantly impacts shopping behavior: Consumers from age 45-60 show the highest economic sensitivity, with 60% cutting budgets by more than 50%, while shoppers aged 18-29 prioritize product availability over price.
Electric yard truck provider Outrider plans to scale up its autonomous yard operations in 2025 thanks to $62 million in fresh venture capital funding, the Colorado-based firm said.
The expansion in 2025 will be focused on distribution center applications, but Outrider says its technology is also well-suited for use in intermodal rail and port terminals, paving the way for future applications across freight transportation.
“Outrider’s proprietary safety systems; consistent, predictable movement through complex and chaotic environments; and patented robotic-arm-based system for trailer air and electric line connections have allowed us to stay far ahead of any competition," Bob Hall, Chief Operating Officer at Outrider, said in a release.
The “series D” round was led by Koch Disruptive Technologies (KDT) and New Enterprise Associates (NEA), with additional investments from 8VC, ARK Invest, B37 Ventures, FM Capital, Interwoven Ventures, NVentures (NVIDIA’s venture capital arm), and Prologis Ventures. Other investors joining the Series D financing are Goose Capital; Lineage Ventures, the investment strategy of Lineage, Inc.; Presidio Ventures, the venture capital arm of Sumitomo Corporation; and Service Provider Capital. In total , the new backing brings the company to over $250 million in equity capital raised to date.