Finding "new right answers" to age-old supply chain questions
Keynote speakers at the Council of Supply Chain Management Professionals' 2013 Annual Global Conference focused on how to apply creative thinking to address problems.
Thousands of supply chain professionals from 34 countries marked the Council of Supply Chain Management Professionals' 50th anniversary by attending the organization's Annual Global Conference in Denver, Colorado, USA from October 20-23, 2013.
That theme of "the changing right answer" also featured prominently in the opening keynote presentation by Felipe Calderón, president of Mexico from 2006 to 2012. Calderón spoke about lessons that could be learned from the way his country handled the 2008-2010 recession. When the recession hit, Mexico increased public spending to 3 percent of its gross domestic product and expanded its social programs. This was the right decision at the time, according to Calderón. Once the economy started to recover, however, the right answer to the question of how to help the economy changed. Mexico responded by developing an "exit strategy," which largely reversed those previous actions. "At that time, you saw other economies where presidents did the same in the crisis but then never took steps to reduce the deficit after the crisis," Calderón said.
Calderón also saw the recession as an opportunity to increase Mexico's global economic competitiveness. Using the sense of crisis as a catalyst, the government put in place structural reforms while simultaneously strengthening Mexico's commitment to free trade and an open global economy, he said.
The keynote address for the second day of the conference, by Peter Carlsson, vice president of supply chain for Tesla Motors, also played into the concept of new answers to old questions. Carlsson talked about Tesla's quest to challenge conventional wisdom about automobile manufacturing as it designs and manufactures high-end electric cars. To accomplish this feat, the company has focused on creating a completely new, complex supply chain that combines the best of Detroit and Silicon Valley, Carlsson said. Tesla wants to radically change not just the cars themselves but also how the supply chain enables production of those cars. For example, the company has a goal of significantly reducing tooling lead times, in the same way that the consumer electronics industry some years ago was able to reduce its tooling times from 14 to 16 weeks to three or four weeks.
Carlsson acknowledged that it will be hard for "the smallest fish in the world's biggest industry" to change the game. The key to success for Tesla so far has been seeing its supply chain as a key differentiator, and developing deep ties with key suppliers. For example, Tesla has been able to secure a disproportionate amount of resources and attention from some of its suppliers because the owners of those companies have become personally interested in the product and see securing Tesla's business as a long-term investment.
To help conference attendees be like Mexico and Tesla and find their own "new right answer" for age-old problems, CSCMP presented three days of breakout educational seminars that touched on such hot topics as outsourcing, sales and operations planning, risk mitigation, and talent management, among many others. CSCMP members can learn more about these sessions by downloading the presentation slides from CSCMP's website. A member log-in is required to download the slides.
The conference also included numerous special events, including facility tours, the annual supply chain educators conference and doctoral symposium, a "Women at Work" panel and reception, and a student recruitment day. Additionally, the Supply Chain Exchange exhibition showcased cutting-edge technology, equipment, and services (although the hottest attraction on the show floor was a shiny new, black Tesla).
To find next year's right answers to long-standing questions, mark your calendar for the 2014 Annual Global Conference: September 21-24 in San Antonio, Texas, USA.
CSCMP bestows awards for excellence
Here is a brief rundown of the awards that were presented for excellence in business and academics at CSCMP's 2013 Annual Global Conference.
CSCMP recognized a number of special achievements at its annual conference. Here is a brief rundown of the awards that were presented for excellence in business and academics.
Jason Acimovic, assistant professor of supply chain and information systems at the Smeal College of Business of The Pennsylvania State University, received the Doctoral Dissertation Award for his research, titled "Lowering Outbound Shipping Costs in an Online Retail Environment by Making Better Fulfillment and Replenishment Decisions."
The Bernard J. La Londe Best Paper Award was given to Adriana Rossiter Hofer of the University of Arkansas, A. Michael Knemeyer of The Ohio State University, and Paul R. Murphy of John Carroll University for their paper "The Roles of Procedural and Distributive Justice in Logistics Outsourcing Relationships." The La Londe Award recognizes the best paper published in the Journal of Business Logistics.
Office products company Staples Inc. and on-demand packaging manufacturer Packsize received the Supply Chain Innovation Award for Staples' "Smart-size" packaging program, which creates corrugated packaging that is customized for each individual order.
Keiko Arai of Bell Helicopter, Florian Schick of Merck Serono, and Amanda Tolhurst of Whirlpool were presented with the CSCMP Young Professionals Emerging Leader Award. In its inaugural year, this award recognizes CSCMP members age 30 or younger who have made substantive contributions to the field.
New board officers announced
CSCMP elected new officers to its board of directors at the association's annual business meeting
In addition to being an educational event, CSCMP's Annual Global Conference also serves as the association's annual business meeting. As part of those proceedings, members elected the following officers to CSCMP's board of directors:
Board of Directors Chair: Heather L. Sheehan, vice president, indirect sourcing and logistics, Danaher Corp.
Immediate Past Chair: Rick J. Jackson, executive vice president, Mast Global Logistics Inc., a subsidiary of Limited Brands Inc.
Board Chair-elect: Ted Stank, Bruce Chair of Business and professor of supply chain management, University of Tennessee
Board Vice Chair: Kevin F. Smith, president and chief executive officer, Sustainable Supply Chain Consulting
Secretary and Treasurer: Mary C. Long, vice president logistics and network planning, Domino's Pizza
A list of CSCMP's current board members and committee chairs is available here.
Business software vendor Cleo has acquired DataTrans Solutions, a cloud-based procurement automation and EDI solutions provider, saying the move enhances Cleo’s supply chain orchestration with new procurement automation capabilities.
According to Chicago-based Cleo, the acquisition comes as companies increasingly look to digitalize their procurement processes, instead of relying on inefficient and expensive manual approaches.
By buying Texas-based DataTrans, Cleo said it will gain an expanded ability to help businesses streamline procurement, optimize working capital, and strengthen supplier relationships. Specifically, by integrating DTS’s procurement automation capabilities, Cleo will be able to provide businesses with solutions including: a supplier EDI & testing portal; web EDI & PDF digitization; and supplier scorecarding & performance tracking.
“Cleo’s vision is to deliver true supply chain orchestration by bridging the gap between planning and execution,” Cleo President and CEO Mahesh Rajasekharan said in a release. “With DTS’s technology embedded into CIC, we’re empowering procurement teams to reduce costs, improve efficiency, and minimize supply chain risks—all through automation.”
And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.
One of the biggest targets for innovation spending will artificial intelligence, as supply chain leaders look to use AI to automate time-consuming tasks. The survey showed that 41% are making AI a key part of their innovation strategy, with a third already leveraging it for data visibility, 29% for quality control, and 26% for labor optimization.
Still, lingering concerns around how to effectively and securely implement AI are leading some companies to sidestep the technology altogether. More than a third – 35% – said they’re largely prevented from using AI because of company policy, leaving an opportunity to streamline operations on the table.
“Avoiding AI entirely is no longer an option. Implementing it strategically can give supply chain-focused companies a serious competitive advantage,” Kristi Montgomery, Vice President, Innovation, Research & Development at Kenco, said in a release. “Now’s the time for organizations to explore and experiment with the tech, especially for automating data-heavy operations such as demand planning, shipping, and receiving to optimize your operations and unlock true efficiency.”
Among the survey’s other top findings:
there was essentially three-way tie for which physical automation tools professionals are looking to adopt in the coming year: robotics (43%), sensors and automatic identification (40%), and 3D printing (40%).
professionals tend to select a proven developer for providing supply chain innovation, but many also pick start-ups. Forty-five percent said they work with a mix of new and established developers, compared to 39% who work with established technologies only.
there’s room to grow in partnering with 3PLs for innovation: only 13% said their 3PL identified a need for innovation, and just 8% partnered with a 3PL to bring a technology to life.
Even as a last-minute deal today appeared to delay the tariff on Mexico, that deal is set to last only one month, and tariffs on the other two countries are still set to go into effect at midnight tonight.
Once new U.S. tariffs go into effect, those other countries are widely expected to respond with retaliatory tariffs of their own on U.S. exports, that would reduce demand for U.S. and manufacturing goods. In the context of that unpredictable business landscape, many U.S. business groups have been pressuring the White House to pull back from the new policy.
Here is a sampling of the reaction to the tariff plan by the U.S. business community:
American Association of Port Authorities (AAPA)
“Tariffs are taxes,” AAPA President and CEO Cary Davis said in a release. “Though the port industry supports President Trump’s efforts to combat the flow of illicit drugs, tariffs will slow down our supply chains, tax American businesses, and increase costs for hard-working citizens. Instead, we call on the Administration and Congress to thoughtfully pursue alternatives to achieving these policy goals and exempt items critical to national security from tariffs, including port equipment.”
Retail Industry Leaders Association (RILA)
“We understand the president is working toward an agreement. The leaders of all four nations should come together and work to reach a deal before Feb. 4 because enacting broad-based tariffs will be disruptive to the U.S. economy,” Michael Hanson, RILA’s Senior Executive Vice President of Public Affairs, said in a release. “The American people are counting on President Trump to grow the U.S. economy and lower inflation, and broad-based tariffs will put that at risk.”
National Association of Manufacturers (NAM)
“Manufacturers understand the need to deal with any sort of crisis that involves illicit drugs crossing our border, and we hope the three countries can come together quickly to confront this challenge,” NAM President and CEO Jay Timmons said in a release. “However, with essential tax reforms left on the cutting room floor by the last Congress and the Biden administration, manufacturers are already facing mounting cost pressures. A 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally. The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs. These businesses—employing millions of American workers—will face significant disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk.”
American Apparel & Footwear Association (AAFA)
“Widespread tariff actions on Mexico, Canada, and China announced this evening will inject massive costs into our inflation-weary economy while exposing us to a damaging tit-for-tat tariff war that will harm key export markets that U.S. farmers and manufacturers need,” Steve Lamar, AAFA’s president and CEO, said in a release. “We should be forging deeper collaboration with our free trade agreement partners, not taking actions that call into question the very foundation of that partnership."
Healthcare Distribution Alliance (HDA)
“We are concerned that placing tariffs on generic drug products produced outside the U.S. will put additional pressure on an industry that is already experiencing financial distress. Distributors and generic manufacturers and cannot absorb the rising costs of broad tariffs. It is worth noting that distributors operate on low profit margins — 0.3 percent. As a result, the U.S. will likely see new and worsened shortages of important medications and the costs will be passed down to payers and patients, including those in the Medicare and Medicaid programs,” the group said in a statement.
National Retail Federation (NRF)
“We support the Trump administration’s goal of strengthening trade relationships and creating fair and favorable terms for America,” NRF Executive Vice President of Government Relations David French said in a release. “But imposing steep tariffs on three of our closest trading partners is a serious step. We strongly encourage all parties to continue negotiating to find solutions that will strengthen trade relationships and avoid shifting the costs of shared policy failures onto the backs of American families, workers and small businesses.”
In a statement, DCA airport officials said they would open the facility again today for flights after planes were grounded for more than 12 hours. “Reagan National airport will resume flight operations at 11:00am. All airport roads and terminals are open. Some flights have been delayed or cancelled, so passengers are encouraged to check with their airline for specific flight information,” the facility said in a social media post.
An investigation into the cause of the crash is now underway, being led by the National Transportation Safety Board (NTSB) and assisted by the Federal Aviation Administration (FAA). Neither agency had released additional information yet today.
First responders say nearly 70 people may have died in the crash, including all 60 passengers and four crew on the American Airlines flight and three soldiers in the military helicopter after both aircraft appeared to explode upon impact and fall into the Potomac River.
Editor's note:This article was revised on February 3.
GE Vernova today said it plans to invest nearly $600 million in its U.S. factories and facilities over the next two years to support its energy businesses, which make equipment for generating electricity through gas power, grid, nuclear, and onshore wind.
The company was created just nine months ago as a spin-off from its parent corporation, General Electric, with a mission to meet surging global electricity demands. That move created a company with some 18,000 workers across 50 states in the U.S., with 18 U.S. manufacturing facilities and its global headquarters located in Massachusetts. GE Vernova’s technology helps produce approximately 25% of the world’s energy and is currently deployed in more than 140 countries.
The new investments – expected to create approximately 1,500 new U.S. jobs – will help drive U.S. energy affordability, national security, and competitiveness, and enable the American manufacturing footprint needed to support expanding global exports, the company said. They follow more than $167 million in funding in 2024 across a range of GE Vernova sites, helping create more than 1,120 jobs. And following a forecast that worldwide energy needs are on pace to double, GE Vernova is also planning a $9 billion cumulative global capex and R&D investment plan through 2028.
The new investments include:
almost $300 million in support of its Gas Power business and build-out of capacity to make heavy duty gas turbines, for facilities in Greenville, SC, Schenectady, NY, Parsippany, NJ, and Bangor, ME.
nearly $20 million to expand capacity at its Grid Solutions facilities in Charleroi, PA, which manufactures switchgear, and Clearwater, FL, which produces capacitors and instrument transformers.
more than $50 million to enhance safety, quality and productivity at its Wilmington, NC-based GE Hitachi nuclear business and to launch its next generation nuclear fuel design.
nearly $100 million in its manufacturing facilities at U.S. onshore wind factories in Pensacola, FL, Schenectady, NY and Grand Forks, ND, and its remanufacturing facilities in Amarillo, TX.
more than $10 million in its Pittsburgh, PA facility to expand capabilities across its Electrification segment, adding U.S. manufacturing capacity to support the U.S. grid, and demand for solar and energy storage
almost $100 million for its energy innovation research hub, the Advanced Research Center in Niskayuna, NY, to strengthen the center’s electrification and carbon efforts, enable continued recruitment of top-tier talent, and push forward innovative technologies, including $15 million for Generative Artificial Intelligence (AI) work.
“These investments represent our serious commitment and responsibility as the leading energy manufacturer in the United States to help meet America’s and the world’s accelerating energy demand,” Scott Strazik, CEO of GE Vernova, said in a release. “These strategic investments and the jobs they create aim to both help our customers meet the doubling of demand and accelerate American innovation and technology development to boost the country’s energy security and global competitiveness.”