Collaboration, technology heralded as critical to supply chain efficiency

Productive partnerships, a customer-centric approach and innovative deployment of technology and analytics are among keys to supply chain efficiency, according to Georgia Logistics Summit presenters, including leaders of such consumer giants as Kimberly-Clark, Lennox, Wal-Mart and The Home Depot. “Customer-focused supply chain strategies are critical,” said Sandra MacQuillan, senior vice president and chief supply chain officer of Kimberly-Clark Corp., the Dallas-based maker of such paper-based products as Kleenex tissues and Huggies disposable diapers. “Globally creating value from source to shelf” is the objective of the Kimberly-Clark supply chain, MacQuillan told some 2,000 attendees in the May 17 closing address of the two-day event at the Georgia World Congress Center in Atlanta.

MacQuillan, who is based in suburban Atlanta, said supply chain priorities should include collaboration with the right partners, having the appropriate people in place internally and externally, defining of focus areas in concert with consumers, placing the customer “at the center of everything we do,” and application of “metrics, data and insights.” MacQuillan said that, when she joined Kimberly-Clark two years ago, following 14 years with snack food and pet care conglomerate Mars Inc., the $18 billion-plus-a-year-in-sales company “did not have a supply chain,” but it now boasts eight supply chain organizations and five business units engaging some 30,000 supply chain employees worldwide, held together under guiding principles of simplification, standardization and collaboration. “We want to experiment, we want to learn, we want to fail,” MacQuillan said in urging advancement of “a supply chain that senses rather than a supply chain that reacts.” In one of several panel discussions, that philosophy was echoed by Tom Wainwright, Atlanta-based senior manager of regional operations for Richardson, Texas-headquartered climate control leader Lennox International Inc. “Failure is the best teacher,” Wainwright said, noting that distribution network team members are encouraged to ask questions and recognize faults. Wal-Mart Stores Inc., the world’s largest company, is looking to deploy data and technology in moving its supply chain forward, according to J. Brock Toole, general transportation manager at the Monroe, Georgia, logistics center of the Bentonville, Arkansas-headquartered mega-retailer. 

“The future of our industry is going to be driven by analytics and technology,” Toole said. “Those who integrate efficient and effective use of data will outdrive their competition.” As an example of how analytics are being used to improve key performance indicators, Toole cited the piloting of event recorders in trucks based at Wal-Mart’s Georgia distribution hub, which serves more than 200 stores in five states from its location 50 miles east of Atlanta. At The Home Depot Inc., the largest U.S. home improvement retailer, the customer experience – whether in one of the chain’s 2,200-plus stores or via e-commerce or some combination thereof – is furthered through trusted partnerships within the company and with vendors, according to Mark Holifield, the suburban Atlanta-based company’s executive vice president of supply chain and product development.

“We don’t talk about e-commerce at The Home Depot,” Holifield said. “We just talk about commerce. “Retail is definitely evolving,” he said, adding that The Home Depot has hired numerous data scientists to put analytics to best use. “You have to optimize the whole system.” Speaking on the same panel as Holifield, Matt Harding, vice president of Chainalytics’ Freight Intelligence Market Consortium, said synchronization is driving productivity and efficiency. Noting that he expects to see a soft market with overcapacity and low freight rates through at least the end of this year, Harding said, “You have to have good partners to provide capacity in any market.” Tim Manning, vice president of North American surface transportation at third-party logistics provider C.H. Robinson, concurred, saying math is a key ingredient in resolving issues related to technology disruptors impacting the supply chain. “People are still going to be a key ingredient,” Manning said, “but it’s about how we’re going to solve that problem. If we can all work together, I think we can all solve the problem.” In another session, Alex Rhodeen, director of disruptive solutions at global supply chain operator GEODIS, commented, “Disruption will continue and continue and continue. You have to stay steps ahead. You’re the hunter, but you’re also the hunted. Be prepared to outrun the person next to you if you can’t outrun the bear.”

Rhodeen said that, for example, he is excited about the use of autonomous vehicles but the transition is “the scary part.” Derek Banta, director of digital channels and mobile applications at global logistics stalwart UPS, said autonomous vehicles, drones, 3-D printing, advanced telematics and on-demand manufacturing are among technological disruptors shaping the future of supply chains. “It’s a great time to be in the logistics industry,” Banta said, pointing out that UPS, based in suburban Atlanta, is investing $1 billion a year in leading-edge technologies. Of course, as in prior years, the Peach State remained front and center throughout the ninth annual Georgia Logistics Summit. (See the accompanying sidebar below) Georgia Ports Authority Executive Director Griff Lynch cited the efficient working the preceding week of the COSCO Development at the Port of Savannah. Crews accomplished 220 container moves per hour via six cranes in achieving 5,500 lifts as the largest container vessel to call the U.S. East Coast docked at Savannah.

While most containerships calling Savannah won’t have capacities of more than 13,000 twenty-foot-equivalent units, like the COSCO Development, today’s mega-vessels are definitely welcome, according to Lynch. “We don’t want small ships,” Lynch said. “We want the big ships.” Lynch said that 60 percent of containerships now calling Savannah boast capacities of 5,000 or more TEUs, so, whereas the number of total ship calls is down at the port, container volume handled is markedly up. Lynch said advantages of the Port of Savannah extend well beyond the docks, with harbor deepening progressing while inland intermodal capabilities are being extended into the Midwest with development of a consolidated rail terminal to double lift capacity. While those harbor and rail projects aren’t slated to be completed for another three years, Savannah already has eclipsed the Port of New York and New Jersey in offering the most containership calls on the East Coast, with 35 weekly services calling Savannah versus 34 for New York and New Jersey, according to Lynch. (For Georgia Logistics Summit reception photos, see page 30)