Above the Fold: Supply Chain Logistics News (June 23, 2023)

Yesterday, my wife and I celebrated our 26th wedding anniversary.

We took the day off, drove down to Cape Cod, and cycled 50 miles along the rail trail.

That might not sound very fun or romantic for many people, but riding our bikes together was how we first became friends so many years ago. On one of those first rides, before we were even dating, I looked back to make sure she was still near me. In those 2-3 seconds, the road curved a bit, my front wheel hit the curb, and down I went, breaking my elbow on the pavement.

“Stop looking back!” she still yells at me now, so many years later, so many miles later…

She’s still near me.

Moving on, here’s the supply chain and logistics news that caught my attention this week:

Not Surprising: US Business Logistics Costs Increased Again in 2022

“U.S. business logistics cost now stands at a record $2.3 trillion (was $1.85 trillion last year), representing 9.1% of national GDP—the highest percentage of GDP ever.”

That was one of the headlines from the 34th Annual State of Logistics Report, produced annually for the Council of Supply Chain Management Professionals (CSCMP) by global consulting firm Kearney and presented by Penske Logistics.

Inflation, rising labor costs, and parcel rate increases were a big part of the overall cost increase, offsetting decreases in air cargo, ocean, and trucking rates, especially in the second half of 2022 and early months of this year.

While it’s always interesting to look back, how should the industry approach the road ahead? I like the advice offered by Balika Sonthalia, senior partner at Kearney and co-author of the report:

“As the logistics sector moves forward from years of supply chain challenges and bottlenecks, our report shows that now is the time to begin thinking seriously and proactively when it comes to building strategic capacity. Although the market has swung back in shippers’ favor — to the detriment of carriers — we cannot emphasize enough the importance for all industry participants to begin planning for geopolitical tensions, cybersecurity threats, climate change and related natural disasters, slowing e-commerce growth, and global recessionary factors.”

Simply put, the one constant in this industry is uncertainty, and the first step in dealing with uncertainty is to stay informed of what’s happening in the world —  with regulations, the economy, geopolitical activities, transportation and labor markets, the competitive landscape, emerging technologies, and so on — on an ongoing basis. The good news is that we have greater access to real-time data and information today than ever before, from a variety of different sources, including newspapers, blogs, newsletters, social media, podcasts, government agencies, and technology companies. Find the sources you consider the most informative — and that you trust the most — and follow or subscribe to them. 

Kinaxis: Getting to “One View of Information Across Planning and Execution”

Break down the silos between planning and execution.

Analysts, consultants, and software vendors have been saying that for decades, and yet many (if not most) companies still struggle to do so for a variety of reasons.

But if at first you don’t succeed, try, try again. 

At this week’s Kinexions conference, Kinaxis unveiled “new product innovations spanning the end-to-end supply chain.” Here are a couple of product innovations highlighted in the press release:

Supply Chain Execution (formerly MPO) capabilities, including transportation management, order management and returns management, are now integrated with Supply Chain Planning, eliminating the siloes that exist between planning and execution. These new capabilities will empower businesses to drive supply chain orchestration from plan through delivery across all horizons, whether managing multi-year or down-to-the-second execution.

Sustainable Supply Chain, a new solution that allows companies to embed emissions factors (including Scope 3 emissions) directly into RapidResponse® to design scenarios that will estimate, project and simulate supply chain related CO2e in real time. Not only does Sustainable Supply Chain create visibility into emissions data, but it also empowers planners to understand its impact in seconds.

“The days of the cascaded flow of information passed down between teams are long behind us,” said John Sicard, President and CEO at Kinaxis. “Today, CEOs and boards of directors are demanding their supply chains operate in real time and with one view of information across planning and execution. The innovations we announced today make it easier for teams to collaborate and make decisions, as well as narrow the gap between planning and execution, to create both resiliency and efficiency at scale.”

While planning and execution are getting more unified from a technology standpoint, a lot more work is still required organizationally to reap the benefits — for example, making sure metrics and incentives are aligned across business functions, and across trading partners too.

And with that, have a happy weekend!

Song of the Week: “The Narcissist” by Blur