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Rob McKeel, CEO, Fortna
Fortna's new CEO discusses the impact of Covid-19 on supply chains. The demand for online shopping of fresh fruits accelerates the need for cold storage space. And our roundup of top Covid-19 stories and resource as the world battles back. Pull up a chair and join us as the editors of DC Velocity discuss these stories as well as news and supply chain trends on this week's Logistics Matters podcast. Hi, I'm Dave Maloney. I'm the editorial director at DC Velocity. Welcome. Joining me to provide their insight into the top news stories of this week are senior news editor, Ben Ames, and senior editor Victoria Kickham. But before we get to Ben and Victoria, allow me first to introduce our special guest today. Robert McKeel is the new CEO of Fortna,, a global automation and engineering services and software company for the supply chain industry. Rob is been with Fortna for only about a month now, but he brings with him an impressive resume and lots of experience. He has previously spent more than 25 years at GE, where most recently held the position of president and CEO for GE Automation & Controls. Rob, welcome to Logistics Matters. Good to have you with us.
David Maloney: 1:13
Fortna's new CEO discusses the impact of Covid-19 on supply chains. The demand for online shopping of fresh fruits accelerates the need for cold storage space. And our roundup of top Covid-19 stories and resource as the world battles backull up a chair and join us as the editors of DC Velocity discuss these stories as well as news and supply chain trends on this week's Logistics Matters podcast. Hi, I'm Dave Maloney. I'm the editorial director at DC Velocity. Welcome. Joining me to provide their insight into the top news stories of this week are senior news editor, Ben Ames, and senior editor Victoria Kickham. But before we get to Ben and Victoria, allow me first to introduce our special guest today. Robert McKeel is the new CEO of Fortna,, a global automation and engineering services and software company for the supply chain industry. Rob is been with Fortna for only about a month now, but he brings with him an impressive resume and lots of experience. He has previously spent more than 25 years at GE, where most recently held the position of president and CEO for GE Automation & Controls. Rob, welcome to Logistics Matters. Good to have you with us.
Robert McKeel: 1:13
Thank you. Happy to be here.
David Maloney: 1:15
Of course, the issue that all executives have to deal with right now is Covid-19. So how has this crisis affected the ways that Fortna interacts with your customers?
Robert McKeel: 1:25
Yeah, it's been very dynamic. You know, we offer a service to our clients to help optimize and help their supply chains perform. Many of our clients are essential businesses, and of course, we're supporting them in any way that we can. Our support team operates 24-7 to make sure that we are available for any issues in the active supply chain operations. Likewise, we've modified some of our offerings to offer a rapid response to help diagnose any issues and offer quick improvement options. We're fortunate that a lot of our work can be done remotely, and we've been set up to be a remote workforce, so that's allowed us to continue to serve our clients, even in a situation where many folks are staying at home. And then obviously, in cases where we have to do physical work at the sites, that's been restricted based on the rules and policies of various countries and states that we we operate in. But where we can support our clients at their sites, we are.
David Maloney: 2:24
You mentioned about essential businesses, and, of course, most supply chains are considered essential these days. Are you experiencing--are there customers experiencing any kind of major disruptions to their operations as they're going through the crisis?
Robert McKeel: 2:37
We haven't heard of any in our in our network. Of course, we have some clients who have shifted their priorities to focus on products that support the Covid-19 crisis. They may have--I've been working on projects that are now deemed a little bit less important than ones that directly support Covid-19. So we've seen some delays in areas like that. We see others seeing a shift in mix from their physical storefronts to their digital storefronts and a multiple of volume in their e-commerce channels that may have previously been in their in their physical channels, but no specific disruptions directly in our in our customer base.
David Maloney: 3:18
You talked about physical storefronts, and of course you--Fortna is well known for working with a lot of retailers. They seem to be the most affected by the social distancing. The fact that stores some stores aren't allowed to open or others have limited hours or rules within the facility as to how many people can be there at a time. Do you think that this will change the way retail works forever, going forward?
Robert McKeel: 3:42
Yeah, my hypothesis is "Yes." I think supply chains will. Staffing. Retail will change. I think the way people operate will change. It's too early, probably, to support that hypothesis with concrete examples. I could just give my recent example of going to the post office to mail in my taxes, and everything is compartmentalized. A line that used to hold 20 people holds six now, as they spread people out. So I think people are seeing different ways of doing things in a situation like this, where there's, a live virus situation. What I would expect to see is a lot more of investment in bolstering of digital storefronts. Many folks who previously were on the fence about buying goods online have now been forced to try it, and I'm sure many of them will like it and stick with that buying model. So I think the bolstering of digital storefronts and supply chains that support that buying model will be one [change]. I think risk mitigation in the supply chains to have alternative flows, maybe even some redundancy and flows of goods through the network, will be an option. Potentially a re-look at capacities in the supply chain around critical commodities and how you manage responsiveness to surges in demand. And then I would expect a lot more acceleration of micro fulfillment options as enhancements to the distribution network, particularly as more and more people are ordering food and groceries online than they have in the past.
David Maloney: 5:10
Right. So those micro fulfillment sites, where they'll be placed in urban areas or away from the larger distribution centers, I think they're going play an important part in that. How do you see distribution centers themselves changing as far as the mix of equipment and systems that they might have within them?
Robert McKeel: 5:28
I think there'll be a continued advancement in technology investments and automation. I think on the technology side, as you put in automation, as you as you add some of these technologies in the distribution centers, you get automatic spacing of labor. So it helps with sort of the social distancing concept. I think labor has become a little bit of a risk in in this, so you don't know if someone, a critical person or a critical set would be be out of work for a period of time. So again, automation can help manage labor risks in these situations. And then I think software will continue to be an investment to provide visibility and flexibility into the supply chain, particularly into the distribution centers. And then also, I think, is just the flexibility to manage changes in buying behaviors. You know, as I mentioned before, this potential shipped from a storefront-type retail to different models like like e-commerce.
David Maloney: 6:28
I know that Fortna's agnostic when it comes to selecting the kind of equipment and systems that you put into facilities that you're building for your clients, or helping to design. But are there particular technologies that you can point to that you think will have a key role in the future of warehouse automation, the kinds of things that you're talking about?
Robert McKeel: 6:50
Yeah, I would expect to see that--we talked about micro fulfillment. I think, the technology that provide[s] high density solutions, particularly if you think about the potential of re-using empty retail space for for distributed fulfillment centers, that's that's one. I think that those technologies, something like an AutoStore type technology, would be one that comes to mind. I think additional investments in AGVs and things that allow for a mix of solutions for labor and and automation in distribution centers will be another that was important. Of course, continued investment in software. One thing I've learned in my month on the distribution side is the number of variables and the complexity is pretty high. When I was in the factory automation space, when you're building a product, you typically have a recipe to follow. It's very sequential in nature. So you're automation is basically automating that recipe, whatever it may be. In the distribution center, you don't know what variables are coming your way because it's purely demand based on how consumers are purchasing. So the number of variables and the complexity just keeps increasing. And I think software to help manage that complexity will be critical.
David Maloney: 8:05
Right. And technology continues to change all the time, which is, frankly, what keeps us in business. We always have new things to write about. So it'll be interesting to see how this all turns out. Thank you, Rob. We really appreciate your insights today with us and thanks for being a part of our of our podcast today.
Robert McKeel: 8:21
Absolutely. My pleasure. Thanks for inviting me.
David Maloney: 8:23
If you would like more information on Fortna, and their company services, we encourage you to visit Fortna dot com. That's F O R T N A dot com. Now let's turn to our news editors, Ben Ames and Victoria Kickham, to talk about some of the stories and trends that have emerged this past week. Victoria, you reported this week on the increasing demand for cold storage in the supply chain during the midst of the Covid-19 crisis.
Victoria Kickham: 8:49
Yes, that's right, and this actually has very much to do with Rob's points about changing consumer behaviors and how that's driving change in his business as well. So we've been following a trend toward growing demand for cold storage warehousing nationwide, and it's driven largely by growth in e-commerce--I'm sorry, e-grocery shopping. That trend has accelerated in the face of Covid-19, as quarantines and stay-at-home orders have forced consumers to either begin or increase their level of online grocery shopping, and, as Rob pointed out, become more comfortable with buying these kinds of products online if they haven't before. So we have been reporting on this, and then interestingly, in the last week or so, commercial real estate firm CBRE had said that it anticipates the need for--it's just sort of accelerating that growth. They see a need for, I think it was, between 75 million and 100 million square feet of cold storage space over the next five years to meet that kind of demand.
David Maloney: 0:00
I think it'll be interesting to see what happens with cold deliveries as well. People are home right now, so they're there to be able to receive products that have been in cold storage, a freezer environment, a refrigerated environment, and are being delivered to them directly. But I think it'll be interesting to see what happens when people go back to work, if that model still exists when you don't have anyplace cold to actually deliver it to, if someone's not home. Something that I think will be interesting to follow as we go along.
Victoria Kickham: 0:00
Absolutely.
David Maloney: 0:00
Ben, you've been doing our regular roundup of Covid-related stories on DCVelocity.com. A lot of interesting things coming through us each day, of ways companies are responding, things that are happening within the marketplace. Can you highlight a few of those recent stories that you've covered?
Ben Ames: 10:33
Yeah, I'd be glad to. They're really--it's been extraordinary to see some of the ways that logistics technology providers have adapted some of their tools to serve the really specific challenges that we're seeing in this Covid time. Following up on Victoria's point about the jump in demand for cold storage and food, particularly, there's a company called Convoy the digital freight network, and they match loads and trucks, basically. And last week they said that they were actually going to pay the trucking costs for any food retailer in the U. S. who's willing to donate a truckload of food product to the food bank in their region. So what they're doing is really stepping in to fill a route that that didn't exist before, because, with people out of work, with people on unemployment, the demand for food banks and soup kitchens is really jumping as well. And there's not necessarily an easy way to get the product there. It's really--that has jumped in a way that nobody could have foreseen.
David Maloney: 11:41
I think all of us have seen those long lines that are at food banks, so anything that could help to get more product to the food bank is certainly a plus. What else have you seen?
Ben Ames: 11:51
Yeah, it's definitely true. Yeah, some other ways in which logistics firms have adapted their tools: There's a company called Ware2Go, with a two in the middle, a digit in the middle of the name, It's a UPS division, and they provide on-demand warehousing and 3PL services. So they're donating their logistics services and warehouse network in order to get PPEs to healthcare workers And you may have heard of that acronym for personal protective equipment. There are, in many places, shortages of masks and glasses and respirators and robes, so that there they're using that their leverage on that to move that gear around to hospitals and to healthcare clinics--again, in a way that there just wasn't a need for that particular route before. Another really novel way that was neat: The other day, Cummins, which is that the sort of iconic diesel engine maker for so many heavy machines and trucks, they have big manufacturing lines for diesel-engine filters for gas and air, the things that make the engine work. And they've actually adapted those to make particulate filters for healthcare workers to use to breathe through. So it's really, the creativity that we've seen from some of these companies is really inspiring.
David Maloney: 13:19
Yeah, right? And that is great, to see so many different companies throughout the supply chain stepping up and helping with the crisis and doing what they can to provide the products and materials that are needed--not only manufacturing them as you just mentioned with Cummins, but making sure that those products can get to where they need to be. We've seen some changes. Of course, hours of service right now are being relaxed. More and more rest stops and other kinds of services and places like that still function to be able to make sure goods can get across the country where they need to go, to get to the various places to support it. You know, I think the one thing that we've come away from all this, with Covid-19, is that people are finally appreciating supply chains in ways that they never have before. Well, Ben, thanks for offering those insights, and we want to remind you that we do have a lot of Covid-related resources on DCVelocity.com In fact, we have a complete separate section of Covid-related information. You can just click on that at the very top of the DC Velocity website. And you could also go, to learn more about some, of the resource list. And Ben, maybe you want to talk about that. Just a moment, because you put together a great list of resources that are out there within the community to help people during the crisis.
Ben Ames: 14:30
Thanks, Dave. We have, yeah. The whole staff has been working on this. From from the earliest days of covering that the coronavirus pandemic, we noticed, that it's really important to trace its impact on supply chain and service providers and logistics service providers, particularly, because that impact, in many cases is different than it is on other parts of the economy. So we pulled together a lot of the great efforts to share accurate and timely information that we've seen come in from industry groups throughout the logistics sector. Association of American Railroads and MHI, the material handling group, and different state trucking groups--the line goes on--as well as many vendors in every corner from software to fulfillment to, even to law firms. Because, for instance, one interesting question that just came up today was when companies transfer some of their manufacturing capabilities from making one object into making healthcare objects, it's unknown yet whether they might have liability or some legal responsibility for ensuring that they're making a decent product. So there's some questions here that we're all trying to answer at the same time, and hopefully our resources page can give folks a good foundation for digging into those.
David Maloney: 16:00
Right. And if someone would like to look at that, they could go directly to that page by going to DCVelocity.com/covid19resources. Again, DCVelocity.com/covid19resources. Thanks, Ben, and thanks, Victoria, for sharing your highlights of the news this week and our special thanks, again, go out to Rob McKeel of Fortna for offering his insights with us also today. And thank you for listening. If you'd like more information on the stories we discussed today on Logistics Matters, be sure to check out DCVelocity. com for more details. And please provide any comments or feedback you'd like to make on our new podcast. We're just starting the series out, so we're interested in what you have to say about it and interested in your comments. You can email us by going to podcast@dcvelocity.com. That's podcast@dcvelocity.com. We'll be back next week with another edition of Logistics Matters. We'll see you then.
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