3PL Americas - International Warehouse Logistics Association · 2014-06-10 · 3PL Americas Winter...

3PL Americas™

2014 IWLA CONVENTION & EXPO

It’s About Your People

THE MAGAZINE OF IWLA IN NORTH AMERICA • WINTER 2014

www.IWLA.com

PM 42128520

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PUBLISHED FOR:

International Warehouse Logistics Association Steve DeHaan, president & CEO 2800 River Road, Suite 260 Des Plaines, IL 60018 USA Tel: (847) 813-4699 Email: [email protected]

Managing editorJohn Levi, IWLA Canada

Copyright © 2014, International Warehouse Logistics Association (IWLA). All rights reserved. No part of this publication may be reproduced by any mechanical, photographic or electronic process, nor may it be stored in a retrieval system, transmitted or otherwise copied (except that members of IWLA may copy all or part of this publication exclusively for personal use or use in the operation of that member’s business, but excluding any publication) without prior written permission from IWLA. For permission, contact the publisher, J.M. Levi & Associates Ltd.

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3PL AmericasTHE MAGAZINE OF IWLA IN NORTH AMERICA • WINTER 2014

™

Cover photo: iStockPhoto.com

3PL Americas™

2014 IWLA CONVENTION & EXPO


THE MAGAZINE OF IWLA IN NORTH AMERICA • WINTER 2014

www.IWLA.com

PM 42128520

6 It’s About Your PeopleBy Steve DeHaan

7 Cheers to Joel AndersonBy Paul Verst

8 Artificially Sweetened EconomyBy Brian Beaulieu

11 ADAPT: Overcoming AdversityBy Jim Abbott

14 Saddle Creek Logistics Services: Doing Whatever It TakesBy Kim Biggar

17 Joel Anderson Retires from the IWLA: Reflections on his TenureBy Kim Biggar

19 Key Challenges in Satisfying Real-Time Consumer DemandBy Paul Cole

22 Material-Handling-Equipment Acquisition and Economic Fleet ManagementBy Jamie Stephen

25 Tips from a Specialist in Material-Handling Systems and EquipmentFrom Cisco-Eagle

27 2014 18th Annual Third-Party Logistics StudyBy Melissa Hadhazy

30 Leading Through Inquiry: Do Ask, Don’t TellBy Chip Scholz

32 International Trade and Global SourcingBy Garland Chow

36 10 Ways to Make Conveyor Operations SaferFrom Cisco-Eagle

38 IWLA Continuing Education

40 Contract-Warehousing ArrangementsBy William W. Clark

41 Marching Band Logistics: Every Detail in Quick-Speed Moves PlannedBy Kim Biggar

42 Advertiser Index

42 IWLA Events Calendar

42 Future Issues of 3PL Americas

3PL Americas — Winter 20146

PRESIDENT’S MESSAGE


THAT HEADLINE is also the theme of the 2014 IWLA Convention & Expo, on from March 23 to 25 in Phoenix. Wow! It is so true that,

to succeed, we need good people, with great knowledge, skills and attitudes. It is not easy to put together a team that can administer, operate and sell your business to/for other businesses.

In my first three months with IWLA as the new CEO, I am very proud of our staff. They are a great team (as evidenced by the tremendous member interest in this convention). They are promoting, mentioning, developing, accounting, selling, planning, and, best of all, creating a lasting brand (per-ception/image) of all that IWLA is and desires to be more of for its members.

During my visits with members and prospective members, I have seen companies doing very well and some that are struggling. All of them seemed to have great operations and administrative personnel. But that’s no longer enough. Today, we have to be marketing and selling to get new customers. We have to be developing our businesses to “get a larger share” by developing the services that the customer needs and wants.

We also have to be the best at what we do.What is the best way to learn and improve? IWLA gives you access to a

great resource: other members, especially those that are at the top of their game. Where can you go to meet with other 3PL leaders? The IWLA Conven-tion & Expo and other IWLA events (even webinars) allow you to interact with the best in the industry and ask them your specific questions. IWLA events also bring you a plethora of experienced speakers.

As a 3PL leader, if you are not planning for your growth, you won’t grow. Nobody else is going to bring in customers for your company. IWLA events give you the tools and resources to grow.

What is your next step? Come to the convention and use the knowledge and information you receive to move your business forward. Come with ex-pectations and go home with ideas to expand and grow your business. You owe it to your employees – your people – to ensure your company is vibrant.

Those employees are the ones who will help you take it to the next level. They are the essence of your brand. Their actions shape how customers view your company. They are the ambassadors for your business.

It all stems from your people. What message are they sending to your cus-tomers and future customers? It is about your people.

See you at the convention.

Note: The 2014 IWLA Convention & Expo will be on March 23 to 25, at the JW Marriott Desert Ridge in Phoenix, Ariz. Online registration is open until March 19, at www.IWLA.com. On-site registration will be available.

Steve DeHaan, CAE President & CEO International Warehouse Logistics Association

The IWLA Convention & Expo

allows you to interact with the best

in the industry.

3PL Americas — Winter 2014 7

CHAIRMAN’S MESSAGE

Cheers to Joel Anderson

THE CLOSING DAYS OF 2013 were a bittersweet time for IWLA. At year’s end, we officially said “goodbye” to IWLA President &

CEO Joel Anderson, who retired after seven years in that role. Joel’s departure also means we are saying farewell to his much-talented wife, Barb, who has planned many IWLA Board meetings and events.

Joel notified the IWLA Executive Committee and Board of his pending retirement in March 2013, giving us a full year to find his replacement.

I have known Joel throughout his leadership at IWLA, but it wasn’t until I joined the executive committee several years ago that I got to know the real Joel. As 2013-2014 IWLA chairman, I have found a true friend and mentor in Joel.

Joel came to IWLA at a challenging time: financial reserves were dwin-dling; membership was in a downward spiral; government affairs were not a high priority; staff morale was low; and the organization lacked structure. This situation required a leader who had a passion to face challenges and a vision to reinvigorate IWLA.

As I look back on our accomplishments under Joel’s leadership, we have made substantial progress: Financial stability has returned. We are increasing cash reserves annually. Membership numbers are on the rise. Retooling the staff has resulted in a high-performing, dedicated team. And our government-affairs efforts have put IWLA at the forefront of many issues in Washington.

Joel, being a kind and humble person, is the first one to recognize the ef-forts of others. He ensures they receive the pat on the back. I can’t tell you how often I received an email or phone call from Joel congratulating me for an accomplishment or alerting me to the contributions made by others.

When Joel informed me of his decision to retire, we collectively laid out what his last year would look like and what we wanted to accomplish. I am pleased to report that everything on the list has been checked off as completed.

Joel is a man with a plan, and his plans now are to go back to Oklahoma and spend more time with Barbara and their two children, travel, piddle around in the garden, read a good book or two, and volunteer at their church. We will officially and appropriately thank Joel and Barb for their contribu-tions during the IWLA Convention & Expo in March. I highly encourage all of you to attend and join us as we thank them both.

Joel, you have been a good and faithful servant. God bless you both as you begin the next chapter in your lives. The first round of drinks will be on me.

Paul VerstChairmanInternational WarehouseLogistics Association

As I look back on our

accomplishments under Joel’s

leadership, we have made

substantial progress.


ACCURATELY READING economic signs is critical to company owners and managers as they make strategic decisions that will affect

future operations. While forecasting is always subject to error thanks to un-foreseeable events, it is nonetheless essential. With a long-term 94.7-percent accuracy rating, ITR Economics has a good track record in providing industry forecasts. Here is our thinking as of December 2013.

■ Retail Sales Analysis

Black Friday sales data was reported as being weak. An early estimate showed a 3.4-percent decline in sales from the same day last year, even though foot traffic was up. We think the reported data was a bit overplayed toward the negative. Stores opened on Thanksgiving Day rather than waiting for Fri-day, and Cyber Monday sales came in 20 percent to 22 percent higher than last year’s. Now we know what all the foot traffic was doing: deciding what they were going to order online on Monday.

We expect to see overall retail sales grow fast enough to suggest underly-ing economic health. Additional strong-enough ascent in retail sales would be consistent with the improvement in the rate of growth in disposable personal income (after-tax income) that occurred over the three-month period of Sep-tember to November. The improvement in the income trend is most welcome, albeit unexpected. So we don’t really see the Black Friday results as a cause for concern regarding our forecast of economic growth through the first half of 2014.

■ Signs from the Leading Indicators

Be aggressive in your resource-needs assessment for the first half of 2014. The good news cited above is consistent with the overt rise evident in the Purchasing Managers Index reported by the Institute for Supply Manage-ment and the strong showing in the Conference Board’s Leading Economic Index for the U.S. If you choose to believe that the stock market is currently rational in its trend, we can add the S&P 500 to the list of reasons to cheer. With the Consumer Price Index (CPI) posting a 1.0-percent year-over-year inflation rate through October and no signs of a serious surge in the measured rate of inflation, we aren’t seeing a threat to the economy coming from that direction, either.

When it comes to slightly longer-term planning, our concerns for the sec-ond half of 2014 have not gone away, despite the fact that the employment trend perked up in November, following a weak October result. November may simply have been a catch-up month. The rates of change for employ-ment growth show that the general pattern of deceleration remains in place, as is also true of the total number of help-wanted online ads reported by the Conference Board. We need to see the year-over-year growth rate in employ-ment improve from the current 0.9 percent (not seasonally adjusted data) in

2014 IWLA CONVENTION KEYNOTE SPEAKER

Artificially Sweetened EconomyBy Brian Beaulieu

As you prepare for 2014, one

of your major objectives should

be determining how you are going

to maintain margins in the face

of higher labor costs and very little

consumer price inflation.


Counsel for the Road Aheadsm

Over the years, Benesch has provided legal consultation and pragmatic business advice to well over 100 Transportation Brokers, Surface Freight Forwarders, Ocean Freight Forwarders, NVOCC’s, Air Freight Forwarders, Warehousemen, 3PLs, 4PLs, and other Freight Intermediaries of all kinds. They know that when it comes to corporate structuring, mergers and acquisitions, transportation and logistics contracts, best practices, regulatory challenges, insurance and risk management, freight loss and damage or freight charge disputes, catastrophic personal injuries, and independent contractor relationships — Benesch knows Intermediaries.

100 FReIghT INTeRmedIARIeS CAN’T Be WRONg

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MEMBER

MEMBER MEMBER

SM

order to have more confidence in where the economy is heading for the second half of 2014.

■ What’s Next for the Federal Reserve?

While the strength of the employ-ment number for November is less than absolute, seeing the unemploy-ment rate decline to 7.0 percent (not seasonally adjusted) is a bit more complicated. The Federal Reserve expected that unemployment would be 7.0 percent when it began taper-ing its quantitative easing policies in June 2013, during QE3 (a third round of quantitative easing that began in September 2012), but un-employment fell to this level sooner than they expected. The Fed will likely have a “wait and see” ap-proach to the 7.0 percent because the drop was aided by very slug-gish growth in the workforce (0.1 percent year over year) and ongoing weakness in the labor-participation rate, which is down 0.5 percent from this time last year. Is the Fed likely to engage in the much-discussed “tapering” in the near term because we have seen the 7.0-percent un-employment rate hit? We think the probability of tapering over the next one to two quarters goes down with Dr. Janet Yellen taking the reins at the Fed as of February 1.

Dr. Yellen’s track record suggests that she will be more dovish than Dr. Bernanke when it comes to the threat of future inflation balanced against the more-immediate pain of unemployment. This means that she’ll likely consider it more impor-tant to bring down the number of people unemployed than to worry about the effects of inflation in the future. Dr. Yellen is a big believer in the Phillips Curve, an economic principle that, in essence, says that you can bring employment down as long as you don’t also attempt to address current or future inflation. Given how low benign inflation presently is, there seems to be a lot of maneuvering room for Dr. Yellen to continue QE3 and avoid tapering for now. The stock market in 2013

loved this concept; the bond market (presently in a negative trend) clearly does not.

We see QE3 as “artificial positiv-ity” being stirred into the economy. Think saccharin going into your coffee. Saccharin makes the coffee taste better, the coffee likely makes you feel “better,” yet in the long run saccharin has proven to be an un-healthy choice. You and I are being force-fed saccharin.

We are concerned that businesses are going to find themselves in a margin-squeeze situation in 2014. The CPI is low, so the environment for higher retail prices is lacking, yet wages have started a new cyclical rising trend. This potentially dif-ficult environment for raising pric-es combined with increasing labor costs is going to impact the bottom line for many companies. It also is not likely to help the rate of rise in employment.

As you prepare for 2014, one of your major objectives should be determining how you are going to

maintain margins in the face of high-er labor costs and very little consum-er price inflation. The solution to the squeeze is going to be a function of knowing what is special about your product or service (why it really isn’t a commodity or commoditized service), communicating that knowl-edge in unambiguous terms to your customers and potential customers, and then reminding yourself that revenue is vanity and profit is sanity.

Brian Beaulieu is CEO of ITR Eco-nomics, the oldest, privately held, continuously operating economic research and consulting firm in the United States. ITR has forecast ma-jor economic events, such as the 2008 recession, well in advance, and provides reliable industry and com-pany forecasts tailored to the client’s needs. The company also offers eco-nomic webinars, subscription pe-riodicals, consultative reports, and data-collection services. Mr. Beau-lieu will be a keynote speaker at the 2014 IWLA Convention & Expo.

REGISTRATION NOW OPEN AT www.IWLA.com.

“All organizations say routinely people are our greatest asset yet few practice what

they preach, let alone truly believe it.” –Peter Drucker

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REGISTRATION NOW OPEN AT www.IWLA.com.

“All organizations say routinely people are our greatest asset yet few practice what

they preach, let alone truly believe it.” –Peter Drucker

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PEOPLE will tell you that I overcame obstacles – maybe. But the truth is I have been incredibly blessed in my life; more has been given than

was ever taken away.Some of you may know that my career statistics weren’t that great. There

were some incredible highlights and some agonizing low lights. The truth is, I won’t go to the Hall of Fame. But if a career can be measured by special moments, lessons learned and a connection with people, then I would stack mine up with anyone’s. Maybe there is an obligation to share, to try to learn from the experiences life puts us through.

When you play major league baseball, it is easy to become self-absorbed. Your world can become very narrow. One of the aspects of speaking is that I enjoy getting out in the real world and seeing how hard people work. I have been amazed at how much their pursuit of excellence is similar to that same pursuit on a baseball diamond.

The challenge for me as a professional speaker has been to try to formu-late a common language. The word that I have come up with is ADAPT. To continue to move towards our goals, we must be willing to adapt, to change, and mold ourselves in order to meet the obstacles in our own way. Using ADAPT as an acronym, you can put together a powerful set of words that stand alone in their significance, but they also string together like a chain in an amazing way.

A – Adjustability D – Determination A – Accountability P – Perseverance T – Trust

■ Adjustability

Let me start with A. Adjustability. To achieve great things in this world, you must be able to adjust to what is being asked. My dream wasn’t to play in the major leagues; my dream was to play baseball at all. In order to do that, I had to develop a new way of doing things. I really wanted to join in with my friends, but to do that, I needed to learn to play in a much different way than they did. When you NEED something, you find a way.

I can’t take credit for this. I was surrounded by wonderful people, who had the patience and creativity to help me devise the strategies I would need to get through life, starting, of course, with my parents, teachers and friends. If there is courage in my story, it was theirs. Their generosity of spirit gave me an ingrained optimism that there is a solution to be found for any problem. It may take some flexibility, but it is there.

I learned along the way that doing things in new ways always involves risk. You have to be willing to take a chance. You will also expose yourself to a lot of skepticism and those who will say you can’t do it that way. This brings us to the next word in our ADAPT chain.

2014 IWLA CONVENTION KEYNOTE SPEAKER

ADAPT: Overcoming AdversityBy Jim Abbott

To achieve great things in this world,

you must be able to adjust to what

is being asked.


■ DeterminationOnce you’ve found your way,

you have to work it make it happen. Once you’ve found what you love, don’t let anything stand in your way. I don’t have to tell you that the only way to get what you want is to work your butt off. We all know that. A pitcher’s success depends on the training he puts in before he takes the field.

There is another aspect of de-termination that I think is equally important. We talked about those who say you can’t. You must be de-termined in your belief that you can. I can think of so many examples of people who, in one way or another, questioned my playing ability.

Many teams bunted over and over again to see if I could make

that simple play. One team bunted six times in a row.

My first college win came when they tried to steal home on the catch-er’s throw back to me.

My point is that you have to cre-ate a strong filter that weeds out the negativity in whatever form it takes. You know what I mean. When we aren’t feeling so strong, little things can keep us down, little comments, and body language from your boss. Even our own thinking can be cor-

rosive when we let any thought carry us away.

You have to be determined not to let someone else’s opinion of you define what you think of yourself. Only you know in your heart all the things you are capable of… Which brings us to accountability.

■ Accountability

Accountability: the heart and soul of my ADAPT chain. Basically, ac-countability says that we are re-sponsible for the abilities we’ve been given. It is unforgiving. When we look in the mirror can we say that we’ve made the most of our talents, no matter how big or small they are? Are we making the most of the po-tential we have in all aspects of our lives? As a father, as a husband, as a

co-worker? Accountability is brutal, but we need it to keep pushing our-selves to be the best we can be.

■ Perseverance

Sticking with it. Life is full of ups and downs and how we respond to adversity makes us who we are. You may have seen the highlights, the good times in my career, but there were many difficult times.

In 1996, I went out and had what might be one of the worst years a

pitcher can have: 2-18.Sports had always been my

crutch. For an insecure kid who wanted very much to be accepted,

success in ath-letics covered up a lot of hurt for a long time. But in 1996, it all came crash-ing down: I was failing. As hard as I tried, it would just get worse. By the

end of the year, I was sent to the minor leagues for the first time in my life. I’m not going to tell you that I handled that year with all of the grace I would have liked. All I could do was to keep on trying. The fol-lowing spring, I was released from the Angels. Cleaned out my locker in front of my friends and drove home alone through the Arizona desert. My whole world was upside down. I missed it so much. I desperately wanted to get back, but I was also gun-shy from going through a year and a half of failure.

Inspiration can come from un-expected places. An old manager called, he told me that he didn’t think I was finished. And that’s all it took; we started working.

Finally, things turned around. In-stead of baby steps, I started making large strides until I was able to call my wife and tell her the Chicago White Sox had just called me back to the big leagues. I could have kissed the mound. To make it back seems to me as great an accomplishment as making it in the first place. That experience illuminated to me that, no matter how far we go in life, we will continue to be tested. There is no finish line.

■ Trust

Trust is my favorite, and it is ap-propriate that it comes last. After you’ve found your way, after you have put the work in, after you have made the most of the abilities you were given, and stuck with it, it comes down to trust. Believing in the


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Abbott tossing a no-hitter for the New York Yankees in 1993.

incredible amount of work you’ve done and knowing you are prepared for anything. When push comes to shove, you draw your line in the sand and say, “This is who I am.”

Trust in yourself, believe that you can do it, believe that you can re-spond in any circumstance.

Throwing a no-hitter was one of the most exciting things that ever happened to me. To throw it in Yankee Stadium made it even more dramatic. That game is the greatest illustration I can think of to demonstrate the importance of trust. During that game, the pressure started mounting in the 6th inning. Pitch by pitch, the fans were getting more excited and the atmosphere was becoming electric. That day, the mound at Yankee Stadium began to feel like the eye of a hurricane.

Fans, teammates, thinking about results…everything started speed-ing up big time. The challenge was to bring it back to laser-like focus. This pitch to that spot. Come on now, trust it. Throw this pitch with

confidence.You see, it’s that trust, that last

little oomph in the delivery that makes all the difference. It all comes back to trusting in yourself and the work you have done; you’re ready

for this, bring it on.So that is why I am a big be-

liever in ADAPTing. Not only can we mold ourselves to the challenges that come our way; we can also break that word down into those five components and give ourselves five incredible strategies to apply in any aspect of our lives.

Going through life with a few ex-tra challenges has made me a better person; not better than anyone else, but better than I would have been without them. I’ve learned that some-times adversity can be a good thing.

Jim Abbott was a Major League Baseball pitcher from 1989 to 1999. He played for the California Angels, the New York Yankees, the Chi-cago White Sox, and the Milwaukee Brewers, despite having been born without a right hand. Mr. Abbott currently works as a motivational speaker, and will be a keynote speak-er at the 2014 IWLA Convention & Expo. This article is reproduced with permission.


WITH OVER 16 million square feet of ware-house space, facilities in 37 locations across

the U.S. and more than 2,300 employees, Saddle Creek is large by some standards. But Cliff Otto, CEO of the company, believes that Saddle Creek offers a level of responsiveness and personal attention found in smaller, more-nimble organizations.

The company’s agility, says Otto, allows manage-ment to make quick decisions when they’re required. Being family-owned and professionally managed enables the company to take a long-term view while respond-ing quickly when opportunities arise in the short term.

Chairman David Lyons, who founded Saddle Creek in 1966, is involved in strategic direction and new-business development.

The company routinely invests in resources to strengthen its capabilities and win new business. For example, when the company saw the opportunity to support its customers’ sustainability initiatives and gain greater control of its fuel costs, it purchased more than 100 compressed natural gas (CNG) tractors and built a CNG fueling station at its Lakeland, Fla campus. The long payback period on such an investment might make it unfeasible for a company focused on short-term profit-ability, but it was a natural next step for Saddle Creek’s

MEMBER PROFILE

Saddle Creek Logistics Services: Doing Whatever It TakesBy Kim Biggar

long-range plan.Nimbleness is fitting for a company that promises to

do “whatever it takes” to get a job done. This attitude was certainly in play when a new global electronics cus-tomer asked Saddle Creek to undertake the transition of logistics services from its distribution facility to the 3PL’s over four days, including Christmas. Saddle Creek said “yes.” Employees gave up their holiday time to ensure that the conversion was as smooth and seamless as pos-sible. While the transition itself was not unusual in the 3PL business, the timing likely was.

Saddle Creek’s expansion into light manufacturing was driven, in part, by another customer, an insulated drinkware manufacturer located not far from Saddle Creek’s Lakeland headquarters. The 3PL was asked by the growing business to take on part of its manufacturing operation in addition to the fulfillment services already in place. Saddle Creek agreed, then installed the neces-sary machinery, received training from the customer, and added the two 20-person shifts needed to assemble and pack the product. Saddle Creek is now working with the customer to evaluate other facilities in the 3PL’s portfolio that would be appropriate locations for expansion of this work.

Saying “yes” has been good for Saddle Creek. For the past two years, the company has been among the top-growing 5,000 privately owned companies in the U.S., as identified by Inc. magazine. In the last six years, the company has doubled its revenue, the number of cities in which it has operations, the size of its fleet, and the square footage of its facilities. It has, in fact, grown every year since it was founded, even through the recent reces-sion. Its sales last year were over $300 million.

Saddle Creek has achieved this growth, says Otto, as a result of a three-pronged game plan. First on Otto’s list is “great people, who’ve been unleashed and told to go make it happen.” Second is a commitment to the compa-ny’s core business: providing traditional transportation and warehousing services. Third is the “don’t-say-no, we’ll-figure-it-out” attitude of Saddle Creek’s manage-ment team, which has enabled the company to add new services and resources to meet customers’ evolving needs.


Saddle Creek now provides 4PL services to some of its customers. In these cases, Saddle Creek puts its own employees on site at the cus-tomers’ locations, acting, in effect, as an extension of their staff. The company sees the evolving role of the lead logistics provider as another opportunity for growth and a good illustration of its commitment to and focus on meeting customers’ needs.

Another such opportunity has been the order-fulfillment business. An acquisition in late 2010 gave the company a foothold in the burgeon-ing e-commerce market and it has seen its revenues triple since that acquisition.

■ Company Values and Culture

About 20 years ago, Saddle Creek’s management team at the time took a two-day break from logistics to articulate the company’s motto, mission and values, based on the beliefs of David Lyons expressed over the years. Those values are:• We deliver excellence in service.• We respect the individual.• We promote performance and ac-

countability.• We foster a supportive work envi-

ronment.• We behave with integrity.

These values are at the center of Saddle Creek’s culture. They’re part

of each Monday-morning, all-cam-pus meeting as the first topic on the agenda. Every week, one employee is asked to reflect on the values, pro-viding an illustration – from work or life outside of work – of how the values were upheld, or not, and the outcome. Regular communication about the values, says Otto, keeps them in employees’ minds and re-iterates their importance. They are intended to inform every decision and are included in employees’ per-formance reviews.

According to Otto, Saddle Creek’s emphasis on values bolsters customers’ trust that the 3PL will execute its responsibilities, and that,

if problems arise, information will be shared with the customer and the problems solved. “The attitude that you’ll do the best you can and be honest is nothing unusual,” points out Otto, “but it creates an environ-ment where people really challenge themselves to do the right thing for our customers.”

“Our real strength as a com-pany,” Otto says, “is the quality and the nature of our services and the people who work together to provide them.” The company’s en-trepreneurial spirit, willingness to invest in its customers, and focus on core values have made it easier for Saddle Creek to do so.■

In the fast-paced world of logistics,you need a partner that gets you there first. For 45 years running, Verst Group Logistics has been streamlining the movement of products and drastically shortening your time to market – not to mention slashing all the extraneous costs that go along with that.

Unlike national 3PLs, our agile warehousing and transportation makes us ultra-efficient and flexible. Plus, our packaging division – which requires little to no capital investment,risk or lead time – only adds to our non-stop, one-stop integration and drives our passion to get it done and make the impossible possible.

It’s About Survival of the Fittest.And no one can beat Verst’s triple threat of efficiency, ease and speed to market. Call 800.582.6706 or visit www.verstgroup.com to find out more today.

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Be First With Verst

Copyright 2012


IWLA LEADERSHIP

Joel Anderson Retires from the IWLA: Reflections on his TenureBy Kim Biggar

RETIREMENT from a job you’ve been passion-ate about must be, at the very least, odd. For Joel

Anderson then – whose middle name might be “Passion” – I imagine it’ll take a little getting used to.

“Joel is as passionate about government affairs and protecting industry freedom from regulation as my son is about the Red Sox,” says Arthur Barrett, IWLA chair-man in 2012/2013, and you immediately understand that that’s really saying something. “He combs the airways and the Internet,” explains Barrett, “and finds stuff to put IWLA ahead of the curve.” His pursuit of informa-tion that affects the 3PL industry has allowed the asso-ciation to begin preparing itself and members for issues before others have even recognized that the issues exist. Barrett believes that’s true in the areas of pharmaceuti-cals in the supply chain, food security, pass-through tax entities, and railroad demurrage.

Current Chairman Paul Verst agrees: “Joel cares about people and is passionate about the IWLA and the success of our members. Members appreciate his leadership because he understands what is critical to their success and fights for their causes.” He motivates the owners of member companies to get behind a cause, adds Barrett, without creating panic. “He has a talent to rally people for a cause, but balances his ardent passion with a really calming presence.”

“Joel has been good for the association,” says Jere Van Puffelen, IWLA chair-man from 2009 to 2010, “be-cause the number-one point, which he gets and which underlies all else, is that it’s about the members; that’s in Joel’s DNA.”

In his more than seven years at the helm of the as-sociation, Anderson was very productive, says Van Puffel-en, noting, “Government affairs has been taken to a new, higher level than ever before.” Nowadays, he says,

“IWLA is asked to be at the table in D.C., or we can get to the table.”

“Joel has positioned the IWLA and its members,” puts in Verst, “as experts who can testify in front of Congress and committees on subject matter such as food safety, rail, chemical, pharma and so on. Joel can be very proud of this.” Barrett cites the association’s recent success in having the 3PL industry recognized in legislation at the federal level – for the first time – in the new Drug Qual-ity and Security Act. “This,” he says, “is a testament to Joel’s perseverance.”

“Government affairs is now one of the chief reasons, along with education, networking, legal advocacy, insur-ance and technology, to join IWLA,” says Barrett. “I’m a penny pincher,” he concedes. “It’s unusual to motivate me to spend.” Yet his company has supported IWLA’s ef-forts in addressing public policy issues because Anderson has so successfully rallied members to support the causes that have consequences for the industry.

Another thing about Anderson that you hear often is that he has a tremendous presence on a stage, great communication and speaking skills. “There’s not a mi-crophone or camera that Joel doesn’t love,” according to Van Puffelen. He’s good, too, at sharing “pearls of wisdom,” says Barrett, who continues to benefit from ad-vice that Anderson gave him some time ago, in the guise of a story about himself, to stop talking when angry in

order to avoid saying words that would be regretted. This approach, Barrett notes, is apparent in how Anderson himself operates.

Anderson joined IWLA in 2006. In an early meet-ing, Van Puffelen told Ander-son that he looked forward to tapping into his expertise and enthusiasm during the five-to-seven years that An-derson figured he’d be with the association. Van Puffelen hoped to capture as much of Arthur Barrett, Joel and Barb Anderson, Paul Verst.


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Anderson’s knowledge and know-how for the association as possible. “We were fortunate to get an awful lot out of him,” says Van Puffelen, “but didn’t take every last drop!”

Among IWLA’s achievements under Anderson’s lead-ership, points out Verst, is a return to consistent profit-ability and the assembly of a high-performing staff who are also very passionate about the association. “Joel can retire knowing he has left us in a much better position than when he arrived,” says Verst.

“I admire Joel’s commitment to excellence, to all lev-els of members and to Barbara, his wife,” Barrett says, noting that, with Anderson’s retirement, the association is also losing Barbara. “She has been our meeting plan-ner, and members love her as much as they do Joel.” Van Puffelen shares this thinking: “Barbara keeps things mov-

ing, with a steady hand on the rudder.” She takes care of details, says Van Puffelen, recalling a trip to D.C. that he, Joel and Barbara were part of. Trying to return to his room in the hotel at one point, Anderson was at a loss to remember where it was. It was through calling his wife that he sorted out where he should be.

Joel and Barbara plan to move to Oklahoma in 2014. Their son, Timothy Anderson (who is featured in the story in this issue about the University of Massachu-setts Minuteman Marching Band), says his parents will take time to “survey the lay of the land” as they begin retired life in a new location. They’ll need time, he says, to adjust to a new lifestyle and pace. “Retirement will be bittersweet for them,” he believes; while they’ll miss their friends and the association, they anticipate traveling more and spending more time with family.

“I know I speak for our entire membership in wishing Joel nothing but joy and happiness with Barb and their children after retirement,” says Verst. “What I will miss most about Joel,” he continues, “are the constant praises and gratitude he would bestow on me and anyone else. Out of nowhere, I would receive an email from Joel con-gratulating me on a job well done or congratulating me for recognizing someone else’s efforts. Joel is a kind and humble person and I will miss that.”

“I wish him a long, healthy and prosperous life with Barbara in their new home,” Van Puffelen says. “I will miss his friendship.”■


THE HOLIDAY SEASON is traditionally the busiest time of year for retailers. According to the National Retail Federation, it can ac-

count for anywhere from 20 percent to 40 percent of a retailer’s annual sales, and approximately 20 percent of the industry’s total annual sales.1 However, despite the huge peak in demand that retailers and consumer-products manu-facturers face during this time, many struggle to gain the real-time insights into their supply chain they need to adequately meet this demand and, conse-quently, risk losing holiday shoppers to their competitors.

To understand more, we at Capgemini interviewed 150 senior supply chain managers in the United States to identify the main challenges they face in responding to peak customer demands in real time. We also surveyed 1,000 U.S. consumers to examine their main frustrations with shopping online and in store during the holiday season. Our resulting Supply Chain Impact survey found that, despite growing consumer expectations for perfect order delivery and always-available inventory, the overwhelming majority (83 percent) of U.S. supply chain managers say it is challenging to adequately plan for supply chain capacity to address peak requirements or timely fluctuations in demand, such as the peak demand experienced during the holiday season.

Clearly, this has serious implications for the ability of retailers and con-sumer-products companies to meet the demands of their customers during busy periods. This article outlines the key findings of the survey and examines why supply chain managers continue to struggle to gain the critical real-time supply chain insights they need to address peak demand, with insights into what they can do to overcome their challenges here.

■ Consumer Holiday Shopping Frustrations and Resulting Business Impact

When asked what most frustrates them about their online and in-store holiday shopping experiences, consumers ranked the shipping of the wrong product as their top frustration (95 percent), closely followed by delivered orders arriving late (93 percent) and stores being out of stock for their desired product (82 percent).

The potential impact of out-of-stock items and order-fulfillment issues is clear. With the current retail-industry arms race to guarantee same-day and on-time delivery, the survey found that a clear majority of U.S. consumers (89 percent) are less likely to shop with a retailer in the future if an item is delivered late. Seventy-three percent would purchase from a different store than origi-nally intended if they were unable to find an item they wanted in stock during the holiday season, and 29 percent would decide not to purchase the item at all.

It is, therefore, no surprise that more than half of U.S. supply chain managers

RETAIL SUPPLY CHAIN

Key Challenges in Satisfying Real-Time Consumer DemandBy Paul Cole

1. National Retail Federation 2013 Holiday Sales Forecast: www.nrf.com/modules.php?name= News&op=viewlive&sp_id=1674

This article examines why supply

chain managers struggle to gain

the critical real-time supply chain

insights they need to address

peak demand.


(54 percent) admit that supply chain issues have had a negative impact on their company’s revenue or profit-ability over the last few years. So why do so many continue to experience so many challenges with responding to peak demand in real time?

■ Lack of Talent and Processes Among Key Challenges Faced by Supply Chain Managers

Having the right processes in place that can respond to volatile consumer demand in real time con-tinues to be a struggle for a strong majority of supply chain managers (86 percent). Just 21 percent say their systems do an excellent job of providing accurate real-time insights into supply chain performance, with only 27 percent strongly agreeing their company has adequate capac-ity to adjust to meet fluctuations in consumer demand.

In addition, nearly all report that finding the talent with the right ana-lytical skills (89 percent) or function-al knowledge (85 percent) necessary for supply chain management and insights is an issue for their com-pany. Given the necessity for opera-tional visibility and responsiveness to fluctuations in demand and sup-ply, there is an increasing need for talent with the right mix of analyti-cal skills and functional knowledge of effective supply chain practices.

It is clear from the survey’s find-ings that supply chain managers of-ten face systemic internal challenges, with a lack of the right talent and processes to gain real-time supply chain insights. In light of increas-ingly fluctuating consumer demand, today’s supply chains must have the right talent and tools to anticipate and respond to peak capacity de-mands, including proper inventory management and order fulfillment.

■ Other Key Challenges Faced by Supply Chain Managers

The survey reveals a number of other key challenges faced by today’s supply chain managers.


Ranked highly on this list of chal-lenges was top-down pressure to continually reduce costs and opti-mize working capital (87 percent) and the ability to gain end-to-end visibility and coordination across the supply chain (84 percent). Sup-ply chain managers need a way of gaining deeper insights across the entire supply chain, in real time, but are simultaneously being driven by senior executives to cut costs and, as a result, often struggle to make the necessary investments to make this a reality.

In addition, the survey reveals a worrying lack of integration in multi-channel supply chains, in store and online, as cited by 67 percent of supply chain managers. With shop-pers no longer loyal to an individual channel, but rather to an experience across multiple channels – whether in store, online or through a mobile device – it is particularly concerning that a majority of supply chain man-agers are still struggling to ensure seamless supply chain operations across all channels.

■ The Rocky Road Ahead – Supply Chain Managers’ Top Priorities for the New YearGiven the critical impact of vola-

tility on supply chains, it is some-what paradoxical that demand planning remains problematic in many organizations. This can po-tentially be traced back to the fact that traditional supply chains are designed to respond to demand but not to proactively identify emerg-ing demand. Demand forecasting, leading to better demand planning, requires a combination of reliable statistical models and advanced an-alytics, supported by personnel with skills in advanced modeling and focused system design. Key skills required here are the ability to le-verage data and analytics to sense and respond to changes in demand as they happen —from store sales, through manufacturing and inven-tory management to distribution and fulfillment.

To meet increasingly demand-ing consumer expectations for per-fect orders, supply chain managers’ number-one priority for the new year is to increase the talent and skillsets for those overseeing supply chain processes (65 percent). Other priorities for 2014 include bring-ing in best-in-class processes to im-prove specific business outcomes (55 percent) and better leveraging data and analytics modeling to improve supply chain response to consumer demand (54 percent).

■ The Importance of the Demand-Driven Supply Chain

Our research raises concerns about the ability of large, global businesses to effectively adapt their supply chain processes to antici-pate and manage the stress of ma-jor shopping seasons, including the critical need to maintain the right items in stock and deliver products on time. As supply chains become more complex and consumers grow ever more demanding, business ex-ecutives and supply chain managers are increasingly feeling the pressure to improve their operational vis-ibility and responsiveness to market demand.

These two trends, when taken to-gether, speak to the need for retailers and consumer-products manufactur-ers to transform into “demand-driv-en enterprises” in order to win with the customer long term. A demand-driven supply chain enables a “pull” business model, in which all supply chain activities are focused around consumer or shopper demand. With this approach, retailers and consum-er-products companies can better read and react to actual customer purchases, thereby achieving more accuracy in assortments, better con-trol over inventory and more success in merchandising.

Customers expect delivery on time and in full. However, this is a growing challenge in a marketplace that is becoming ever more volatile. As customer loyalty drops and de-mand fluctuates, the task of making

supply chains more responsive in or-der to cope is becoming increasingly critical. Finding a method to do so without negatively impacting work-ing capital is also key, given ongoing pressures to reduce costs.

Business executives and supply chain managers are finding that business-process outsourcing (BPO) offers a rapid and cost-effective way to access talent with the right skill sets to deliver best-in-class processes and analytical insights. Ultimately, this will enable them to benefit from an effective demand-driven supply chain that can respond to fluctuating consumer demands in real time and help retailers and consumer-prod-ucts companies remain competitive in today’s increasingly complex mar-ketplace.

For more information or to access the full study, go to www.capgemini. com/supply-chain-management/ supply-chain-management-bpo.

Paul Cole is Senior Vice President and Head of Consumer Products and Retail for Capgemini’s Business Process Outsourcing Division.

About the study: The “Sup-ply Chain Impact” study is an online survey conducted by KRC Research among 150 senior supply chain manag-ers in the United States, and fielded from October 4 to 13, 2013. For this study, supply chain managers were de-fined as professionals with decision-making authority or influence over supply chain issues at companies with at least $1 billion in revenue worldwide that make, sell or manage distribution of physi-cal products for consumer use, such as toys, computers and cars. The study also sep-arately surveyed 1,000 con-sumers nationwide among a demographically representa-tive U.S. sample of adults 18 years of age and older, and fielded from October 10 to 13, 2013.


MANY MANAGERS struggle with the acquisition of material-handling equipment for busy, multi-shift or harsh-environment op-

erations via the capital budgetary process. Many departments, including sales and marketing, production, health & safety, facilities, distribution, R&D and IT, are vying within a company for a share of the cash available for equipment purchases.

Finance, senior management and even engineering departments often con-sider material-handling equipment something that can be maintained indefi-nitely with a sound preventive-maintenance program.

The fact is that material-handling equipment does have a best-before date or, if you rather, an economic break-even point. The trick is to identify that point before you reach it.

Many things factor into reaching the break-even point. Environment, us-age, driving habits and maintenance practices all influence the useable life span of equipment.

Let’s break these out for a further understanding.

■ Environment

The following environmental factors accelerate the need for replacement, potentially making it necessary before a firm can depreciate the equipment.• Corrosives, such as brine, fertilizers and meat-processing substances, cause

premature component failure.• Atmospheric particulates, such as grit, dust, pollen, lint and fibers, prema-

turely wear engine components.• Outdoor use in rough or unevenly surfaced yards can cause early mast and

steering component fatigue and failure.• Heavy industrial work, such as moving large shipping containers, causes

mast twisting and fatigue.• Old, chunky floors cause steering-component, frame and mast jarring and

eventual fatigue.

■ Usage and Utilization

Equipment used often and for many hours a day will obviously wear out faster than equipment used for fewer hours. Heat, plugging (changing direc-tion quickly without using brakes) and extensive dock work will jar and wear components quickly. A company that uses a piece of equipment for much of each day is going to experience downtime with it and, likely, failure occurring more rapidly than expected.

OPERATIONS

Material-Handling-Equipment Acquisition and Economic Fleet ManagementBy Jamie Stephen

Environment, usage, driving habits

and maintenance practices all

influence the useable life span

of equipment.


■ Driving HabitsAll drivers are not created equal.

Poor driving habits can cause dam-age, leading to expensive repairs and downtime.• Bumping into objects, riding the

brakes, spinning the tires, turn-ing sharply with the load elevated and slipping off the edge of dock boards are examples of damage-causing and dangerous habits.

• Poor driver supervision and ac-countability create a huge opera-tional and financial burden on material-handling-equipment budgets. Impact alarms and other devices related to the accountabil-ity and location of equipment can assist in controlling these costs.

■ Maintenance Practices

Through good maintenance prac-tices, supported by a measurement program, employees can identify when equipment repairs and replace-ment are required, and probably de-lay those needs. It is almost certain that poor maintenance practices and a lack of tracking will accelerate the outcomes of unscheduled downtime and extensive repair costs.

■ Economic Fleet-Replacement Scenarios

Replacing equipment at the right time is, of course, always desirable. Let’s look at some scenarios that usually develop if equipment in a high-cycle operation isn’t replaced when it should be.

Scenario 1If money isn’t made available

from the capital budget for several years running and the fleet doesn’t get updated:• Operating budgets must increase

to accommodate higher repair costs and/or short-term rentals.

• The annual repair investment could exceed the value of the equipment being repaired.Scenario 2Some equipment is acquired via

the capital budget, but old equip-ment is retained, thereby:• Increasing the overall size of the

fleet

• Increasing the repair budget re-quired to maintain old equipment

• Making necessary the use of short-term rental units due to downtime of old equipmentMaterial-handling equipment has

an economic life cycle similar to those of delivery vehicles or trans-port tractors. Chart 1 shows various duty cycles of both internal-com-bustion and battery-powered equip-ment and the appropriate removal times relative to their applications.

If equipment is used beyond its appropriate economic life cycle, it is being misapplied and will present a company with:• High repair costs• Wasted repair investment• Excessive downtime and operator-

labor costs• Potential catastrophic failure of

mast, steering or structural com-ponentsConsider that 10,000 hours of

operation in a forklift is equal to 300,000 kilometers in an automo-bile.

■ The Solutions

Material-handling equipment, like transport tractors, and service and delivery vehicles, depreciates rapidly, especially if used in de-manding multi-shift operations. The maximum allowable annual depre-ciation levels can’t keep pace with the actual economic life cycle of the equipment.

Operating leases or long-term rentals where there is no option to own or purchase the equipment at the end of the term can be written off as an operating expense in their entirety. At expiry, you have the op-tion to extend, renew or terminate.

The primary benefits of long-term rentals are:• Optimal flexibility• Maximum uptime• No capital investment• Use of cash flow for production

investment• Fixed, predictable, long-term op-

erating costs• Minimal administration• Focus on core business• Safe, up-to-date equipment• Smaller fleet size

■ Acquisition via Capital Budget Process

If the business philosophy and available-cash situation allow for acquisition with capital funds, equipment purchases should not be approached in an ad hoc manner. The goal should be to replace equip-ment in a structured system as the equipment hits its optimum replace-ment time. The key to successfully accomplishing this, from an eco-nomic standpoint, is the collection of relevant performance data.

Cost justification can be provided by a fleet-monitoring system that could be supplied by your materi-al-handling-equipment service pro-vider if they have a system to do so. A fleet-monitoring or -manage-ment program can identify key flags or performance indicators, such as utilization, cost per hour and re-turn on investment. This informa-tion allows the company to make informed decisions on repair versus replacement when large repairs are required to sustain the equipment. It can also help identify problem areas, if repairs are coded as they occur, to point out recurring component failure.

Chart 1: Optimum Replacement Times

High-Duty CycleDaily Use: 12 to 18 hours

Medium-Duty CycleDaily Use: 4 to 12 hours

Light-Duty CycleDaily Use: 4 hours or less

Internal-Combustion Equipment

6,000 to 10,000 hours 8,000 to 12,000 hours 12,000 to 15,000 hours

Battery-Powered Equipment

6,000 to 10,000 hours 10,000 to 15,000 hours 12,000 to 15,000 hours


The key component of such a program for most businesses is the function that calculates the return on investment if a piece of equip-ment is to be replaced. This informa-tion helps the company evaluate an investment in new equipment.

If the expected ROI is less than two to three years, the older equip-ment has little to no asset value on the company’s books and the equipment has over 10,000 hours of service, then it should be seriously considered for replacement.

Each unit should be reviewed individually at budget time to en-sure that a good business decision is made on the above merits.

■ Fleet Dynamics

Graph 1 provides information from a large user of equipment on the median repair cost versus value of equipment cycle of a forklift being serviced over a 10-year period. This equipment was used in a two-shift operation and hadn’t been replaced for 10 years.

Note: The annual cost of main-tenance per unit exceeded the value

of the equipment per unit after five years, or approximately 10,000 to 12,000 hours of use (not shown in graph).

Graph 2 shows the result of ag-gressively replacing equipment (17 percent to 20 percent of the fleet per year) with new equipment com-mencing in 2006/2007. Note the increase in 2007/2008 in operating costs when capital funds weren’t made available due to poor econom-ic conditions. Over the five-year pe-riod, the maintenance and fleet size savings actually financed the cost of the new equipment and increased utilization by 43 percent.

■ Comparison: Battery-Powered and Internal-Combustion Equipment

Another need in the equipment-acquisition process is to identify the type of equipment that will meet the needs of your business in the most cost-efficient and practical manner.

There are many types of equip-ment and, therefore, many consid-erations but, for this article, we’ll simply touch on the merits of bat-tery-powered versus internal-com-bustion equipment.

Recent innovations in battery-charge technology, brought on in part by alternative-fuel research and development, have made possible fast-charging, also known as oppor-tunity-charging, systems for battery-powered equipment.

Conventional battery charging requires that you have multiple bat-teries for multi-shift requirements. Typically, a conventional battery has a daily work cycle of discharging for one shift, charging the next shift and

cooling for the third shift on a recur-ring daily basis.

This requires an area in the fa-cility to store, transfer, charge and ventilate multiple batteries. As well, personnel have to be trained and su-pervised for the safe transfer, charg-ing, connection and maintenance of these batteries.

Over the last 15 years, fast charg-ing has gradually changed that approach and is introducing inter-nal-combustion users to battery-powered equipment, with the allure of significant fuel-cost savings and a smaller carbon footprint.

The concept is quite simple: Rath-er than charge via the aforemen-tioned multi-battery cycle, the same battery is charged during breaks, lunch or downtime of more than five minutes.

A higher-capacity “smart” char-ger communicates with a battery-monitoring device installed on a fortified battery that is measuring state of charge, voltage and heat.

The charger and monitoring de-vice ensure that the battery stays between 30 and 80 percent charged. This minimizes gassing that occurs during the top 20 percent, as well as heat and voltage spikes in the bot-tom 30-percent state of discharge.

All the operator needs to do is connect the battery to the charger during breaks and any extended times when the equipment is not being used. At the end of the work week, the battery is left connected; it is equalized on a Sunday or when not in use for eight hours.

The savings can be significant in a multi-shift environment, even with the approximately 50-percent higher cost of an electric forklift equipped with a battery, fast charger, battery-monitoring device and peripheral hardware.

The cost in Ontario to charge a battery is approximately $2 per shift, while the cost for a bottle of propane is approximately $20 for high-volume users. The $18-per-shift savings annualize to $4,500 per shift, which usually more than covers

Graph 1: Economic Life Cycle of a Forklift

Graph 2: Annual Fleet Repair Cost Comparison

Continued on page 26


■ Pallet-Rack Beam CapacitiesMost pallet-rack beam capacities

are based upon “evenly distributed loads.” This refers to the front-to-back direction, as well as horizontal-ly along the beam width. But what does that really mean?

Looking at it from a side view, as shown in Figure 1, the load rests across the top surface of the beams, and the full height of the beams ab-sorbs the load weight. See Figure 1.

When loads are not evenly dis-tributed, beam capacities decrease.

For instance, when loads are con-centrated between beams, as shown in Figure 2, the load is applied only to that portion of the beam that is

Figure 1: Evenly distributed loads utilize the full height of the beam for higher capacities.

Figure 2: Loads inside the beams utilize the step for capacity purposes. This means a lower beam capacity.

below the step ledge. In the case of a 3-inch-high beam, the load would be applied to less than one half of the steel in the beam. Obviously, capacities will fall in this scenario. See Figure 2.

Loading as shown in Figure 2 results in the load being applied to the beam in an off-center fashion. With the load applied only to the step ledge, a twisting force is applied to the beam. This force can cause the beams to spread, and possibly to tear out of the keyholes in the columns.

This isn’t to say that you cannot load directly onto rack decking, es-pecially if that decking is sufficient to handle the load, but you should use caution on very heavy loads. Consult a rack professional if you aren’t sure.

■ Implement Effective Picking Bays

To save space and improve pick-ing efficiency in your warehouse,

consider the following:• Put your fast-moving items close

to the ground and easy to access.• Determine whether or not the

space and time you would save would more than offset the costs for stronger-than-normal packag-ing to use if you are stacking free-standing product on top of itself.

• Replace part of a pallet rack with each-pick carton-flow racking to maximize space. Pallets racked above could store slow movers, bins or cartons in the carton-flow track below could be used for high-volume movers. Carton-flow racking could be added to single or double-deep pallet racks, in a row or in just a single bay to maximize storage where unused full-pallet racking is taking up space, forcing you to store items outside the rows and reducing picking speeds. With this method, you regain space while increasing productivity.

OPERATIONS

Tips from a Specialist in Material-Handling Systems and Equipment


the cost of the higher investment in battery-powered equipment. If your business has a second or third shift, then the fuel-cost savings are yours to keep.

Before you decide to invest in battery-powered equipment, you should have a power-requirement evaluation performed by a profes-sional dealer and a battery/charger manufacturer’s representative to en-sure the system will work for you and that you get the right system for your business needs.

Some applications are not suit-able for this type of equipment and not all suppliers are experienced in the full requirements for dependable trouble-free usage.

■ Utilization

Utilization is often underestimat-ed as a cost to the business, especial-

ly in large fleets in large facilities and if acquiring via the capital budget as previously indicated.

Constant measurement and re-view are required to manage this cost. Consider that each piece of poorly utilized equipment will cost money to maintain year after year, takes up space and increases motor-ized traffic congestion in the plant.

For example, if you have 40-per-cent utilization in your plant with 30 units, wouldn’t you better off with 20 units at 60-percent utilization? The savings could help you upgrade your fleet faster and clean up your operation.

■ In Closing

As you can see, there are many factors to be considered when man-aging the economic acquisition and replacement of equipment.

A professional material-handling

MANAGEMENT from page 24 organization can assist with collect-ing pertinent data, understanding that data and helping you prepare a business case for the economic re-placement or addition of equipment in a capital-budget format. Alterna-tively, you can rent the equipment on a fixed-term basis, picking the best value proposition for your busi-ness and letting the supplier manage the details.

Remember, at the end of the day, you want to have minimal down-time, a current, up-to-date fleet and a perennial, cost-efficient replace-ment and management program, so that you and your colleagues can focus on your core business.

I hope this article has given you the basis of understanding how to achieve this goal.

Jamie Stephen is General Manager of Liftow Western Ontario.

■ Why Material-Handling-Equipment Maintenance is Critical

We all know that an ounce of prevention is worth a pound of cure. That’s doubly true in the world of warehouse, manufacturing or com-mercial operations, where downtime is so expensive and uptime so very critical.

You likely already have mainte-nance people working on your con-veyors, lifts, dock equipment, and other material-handling equipment. Obviously, all mechanical equip-ment needs to be maintained.

Adhering to strict maintenance

protocols can help you:• Ensure longer life for your equip-

ment;• Prevent downtime due to equip-

ment failure;• Make your operations more reli-

able;• Get better information on the sta-

tus of your equipment;• Utilize your people on other tasks

if you hire it out to specialists, while getting more-specialized, upgraded maintenance on your material-handling equipment;

• Prevent service calls by heading off problems before they can oc-cur; and,

• Benchmark and measure the im-provements in your operations.Material-handling systems are

generally rugged and durable, but the stress of everyday operations can wear down a conveyor, a dock lev-eler, a lift. Even static products like rack and shelving are not immune. Now is the time to act, so that your company gains the best-possible re-turn on its equipment investments.

A short-term maintenance pro-gram is not the answer. A long-term, systematic, standardized main-tenance process yields results for companies seeking to improve per-formance and reliability.

Define Goals for your Op-eration. How much downtime is too much? How many service calls are too many? How many hours of downtime are acceptable? Are there areas or equipment that always need attention? Understanding the issues you face is critical when you start a maintenance plan.

All information in this section is provided by Cisco-Eagle, a nation-al material-handling-systems and equipment provider headquartered in Dallas, Texas.


IN THE MID-NINETIES, Dr. C. John Langley initiated the Annual Third-Party Logistics Study to capture the evolution of the third-party-

logistics (3PLs) industry. The study tracks changes, as providers worked to transition from vendors of individual services to logistics partners offering integrated services and building meaningful, collaborative relationships with their customers.

This year’s 18th rendition of the study shows the improved capabilities of both shippers and 3PLs that have become apparent over the last few years. The study itself has become a widely anticipated and heavily referenced index across the logistics industry.

The 2014 study, focusing on big data, preferential sourcing, smart growth, and shipper-3PL relationships, was sponsored by Capgemini Consulting, Penn State University, Penske Logistics, Korn/Ferry International, and eye-fortransport. The study’s year-round process encompasses four streams of research: surveys, desk research, focus interviews, and intensive, one-day facilitated shipper workshops. This multifaceted approach has evolved with the study to provide steadily expanding global reach, increased accessibility, and the perspectives of both shippers and 3PLs.

■ Annual State-of-the-Market Assessment

The annual study survey is dedicated to addressing the current market, with consistent questions asked annually to track the evolution of shipper-3PL relationships, as well as global advancements and changes within the industry. 2014 survey results show the continuing, positive overall nature of shipper-3PL relationships; both parties view them as being successful. Ship-pers are seeing positive results again this year: an average logistics-cost reduc-tion of 11 percent, an average inventory-cost reduction of 6 percent, and an average fixed-logistics-cost reduction of 23 percent.

Shippers and 3PLs reported being equally satisfied (70 percent and 69 percent, respectively) with the openness, transparency and good communica-tion in their relationships. This supports the shipper trend of increased use of outsourced logistics services. Seventy-two percent of shippers reported an increased use of outsourced logistics services this year, which is up slightly from the average reported in recent years. Meanwhile, 78 percent of 3PL respondents see an increase in outsourcing among their shippers.

More than half of the shippers surveyed (56 percent) reported that they are reducing or consolidating the number of 3PLs they use. This is on trend with previous years’ findings and can be linked to the increased importance and demand for strategic sourcing and stronger shipper-3PL relationships.

As suggested in last year’s report, however, several ongoing factors are im-pacting progress toward the advanced end of the maturity model for shipper-3PL relationships. While gainsharing and collaboration with other companies, even competitors, to achieve logistics-cost and service improvements would seem to be markers for advanced relationships, it seems these approaches are

STATE-OF-THE-INDUSTRY RESEARCH

2014 18th Annual Third-Party Logistics StudyBy Melissa Hadhazy

More than half of the shippers

surveyed reported that they are

reducing or consolidating the number

of 3PLs they use.


more preferred in certain shipper-3PL relationships, and less in oth-ers. There are some encouraging results that suggest a slight increase this year in outsourcing of strategic, customer-facing, and IT-intensive logistics activities. However, the con-tinuing economic uncertainties in the global marketplace may persist in dampening significant growth and innovation in the 3PL sector.

■ The Use of Big Data in the 3PL Industry

Big data is not a new topic within supply chain management or lo-gistics. However, the study found that both shippers and 3PLs widely differ in their level of interest, under-standing and adoption of big data as a tool for analysis and proactive problem-solving. Just 30 percent of shippers and 27 percent of 3PLs in-dicate that to some extent they have implemented or are currently plan-ning big-data initiatives that involve supply chains or supply chain man-agement. Another 39 percent and 42 percent, respectively, indicated they are familiar with big data, but that they either are unsure how it can assist their supply chain organiza-tions or do not believe it represents a good value proposition. Finally, 31 percent of both shippers and 3PLs reported they are not familiar with big data and the associated opportu-nities that successfully implementing big-data practices can bring.

Meanwhile, an overwhelming 97 percent of shippers and 93 percent of 3PLs feel strongly that improved, data-driven decision-making is es-sential to the future success of their supply chain activities and process-es. Both groups see the benefits of le-veraging big data in both functional and strategic aspects of supply chain operations. They also recognize big data’s ability to support visibility and make supply chains more agile. Therefore, shippers recognize the opportunities to collaborate with their 3PLs in both the collection and use of data. Half of the survey respondents see the biggest such op-portunity in creating more-agile and

reactive logistics/supply chain strate-gies, with end-to-end visibility mark-ing the second-greatest opportunity.

The 3PL industry must overcome several hurdles to adopt the full ca-pabilities of big data. There appears to be a significant disconnect be-tween internal supply chain and IT operations and an overall lack of supporting IT infrastructure. Just 57 percent of shippers and 47 percent of 3PLs indicate they “have access to timely and comprehensive data relat-ing to supply chain planning and op-erations” within their organizations. Larger companies and fast-moving industries (e.g., consumer products) show more experience and adoption of overall effective data use.

The study showed that, although the supply chain is slow to adopt big-data initiatives, there are many opportunities to leverage big data to predict demand and begin to change and shape that demand.

■ 3PLs and Preferential Sourcing

The volume of cross-border trade has increased considerably, with extra-regional trade strongly out-pacing intra-regional trade in many regions. That’s driving many ship-

pers to revisit sourcing and distri-bution decisions, an activity that requires balancing cost with op-portunity, particularly in developing countries. Shippers must also ac-count for multiple factors, including consumerism, lead-time constraints, risk management/continuity plan-ning and portfolio differentiation. Another factor greatly impacting global trade is the increase of prefer-ential trade agreements (PTAs).

Basic management of global sup-ply chain activity — the approach taken by many shippers — focuses on the physical movement of goods, and viewing production and distribution as fixed variables. Other companies take a more mature approach, one that accounts for additional complex-ities, referencing a more complete set of variables to optimize decisions at each point within the supply chain. Shippers undertaking advanced glob-al supply chain management often find value in developing a mature global trade management (GTM) methodology, which can be seen in their organizational structure, supply chain decision points and the com-pleteness of their GTM tools.

The 2014 Annual 3PL Study survey found many shippers take

Shippers Con,nue to Outsource a Wide Variety of Logis,cs Services

5%

11% 13%

15%

17%

17%

18%

22%

25%

28%

32%

33%

36%

36%

57%

62%

73%

78%

81%

Sustainability / Green Supply Chain Services

Service Parts LogisAcs

Customer Service

LLP (Lead LogisAcs Provider) / 4PL Services

Fleet Management

Inventory Management

Order Management and Fulfillment

InformaAon Technology (IT) Services

SC Consultancy Services Provided by 3PLs

TransportaAon Planning and Management

Product Labeling, Packaging, Assembly, KiRng

Freight Bill AudiAng and Payment

Cross-‐docking

Reverse LogisAcs

Customs Brokerage

Freight Forwarding

Warehousing

InternaAonal TransportaAon

DomesAc TransportaAon

OperaAonal & RepeAAve AcAviAes

Value-‐Added Services

Strategic & IT-‐Intensive Services

1

Source: 2014 18th Annual Third-‐Party Logis3cs Study.

State of the Market Assessment

Shippers Continue to Outsource a Wide Variety of Logistics Services

Source: 2014 18th Annual Third-Party Logistics Study.

the basic, more tactical, rather than strategic, approach to using GTM to manage global trade, entrusting GTM to more traditional depart-ments, namely logistics (23 percent), compliance (13 percent) and pro-curement (12 percent). Advanced GTM users give responsibility for making critical supply chain deci-sions to departments that play a more strategic role or develop specialized cross-functional GTM groups. Advanced users consider PTA terms alongside other factors in evaluating locations, integrate their GTM applications with other tools and apply GTM early in the design and manufacturing processes. Ba-sic users also typically apply GTM locally by region, while advanced GTM users use it globally to opti-mize sourcing decisions.

Some 3PLs already partner with firms that provide detailed supply chain collaboration services and are well-positioned to support shippers in their GTM needs. Whether or not they include 3PLs, the increasing complexity of global trade requires that shippers take a more compre-hensive approach to sourcing and distribution decisions.

■ Smart Growth and Leadership

The scars and lessons learned over the recent recession have left their mark on the supply chain and its talent. Leaders are now forced to assess the impact of the recession and craft a new strategy moving forward. Shippers and 3PLs are in close agreement on the capabilities they feel are important in the supply chain leaders helming this effort; they rate operational execution, peo-ple management and development, and driving growth as key abilities.

Both shippers and 3PLs recog-nize the challenges of today’s supply chain. With the new normal comes a new set of skills required of sup-ply chain leaders, which are often quite different from those needed prior to and during the recession. With the growth of GDP in mature markets stalled at between 1 per-

cent and 3 percent, supply now out-strips demand, and businesses and consumers are cautious and risk-averse. More than half of shippers (57 percent) and 3PLs (54 percent) in the survey agree that the upcom-ing seven to eight years following the recession will be a period of more-difficult growth than the seven to eight years preceding it.

To succeed in this new normal, organizations need Smart Growth Leaders, a term coined by Korn/Ferry International. The company’s research has demonstrated that to-day’s supply chain leaders need to be accomplished in several dimensions of maturity and agility:

Organization Maturity: The ability to work with and navigate through the organization and its stakeholders.

Cognitive Maturity: The ability to sense and respond to trends, in-formation, data and insights.

Emotional Maturity: The ability to stay in the most-effective emo-tional state to get the best out of self and others.

Mental Agility: Operates across domains, interested in unrelated ar-eas and connects the dots to solve problems.

People Agility: Reads people well, adapts to diverse groups and shows astute interpersonal judgment.

Change Agility: Not afraid to challenge the status quo, tinkers constantly, introduces and follows through on change.

Results Agility: Is able to get out-comes in diverse challenges, priori-tizes quickly, sets and achieves goals in good and bad situations.

Self-Awareness: Reflective about self and open to feedback, genuine interest in learning about and devel-oping self.

Shippers and 3PLs have room for improvement when it comes to meeting the leadership competen-cies required by the new normal, particularly in people agility and emotional maturity. Supply chain organizations, already suffering a talent shortage, need a sustained commitment to skill-building and re-

cruitment to ensure the smart growth leadership skills necessary to succeed in the new normal marketplace.

■ Shipper-3PL Relationships

As stated, the recent economic tumult has significantly impacted the landscape of third-party-logistics providers. The impact of the reces-sion on shipper-3PL relationships remains unclear: Will they return to the path they were taking before the recession, or is there a shift in shipper-3PL interactions, with a new set of attitudes and expectations in the way the two parties interact? The good news is that shippers continue to select 3PLs based on their ability to provide continuous improvement (55 percent), experience in the shipper’s industry (49 percent) and an estab-lished ongoing relationship (42 per-cent) as important selection criteria.

The survey found that shippers are also relying more on centralized sourcing in 3PL selection than they have in the past. Nearly half of ship-pers (48 percent) and 61 percent of 3PLs say centralized procurement functions are playing more or much more of a role in the selection pro-cess compared with three years ago. Conventional wisdom says central-ized procurement emphasizes cost over quality, yet shippers appear to be seeking strategies to control costs while striving for optimal 3PL rela-tionships by balancing centralized and decentralized sourcing decisions.

Mitigating concerns about the impact of centralization is the fin-ding that the majority of shippers and 3PLs say that their relationships have grown more collaborative over the past three years. In today’s markeplace it‘s important for ship-pers to strive for balance in sourcing decisions and seek strategic, collabo-rative relationships with 3PLs.

■ Additional Takeaways

Global markets continue to be volatile, driving highly variable and sometimes sluggish demand for outsourced logistics services. While



GOOD COMMUNICATION is a hallmark of healthy organiza-tions, but it’s often founded on the belief that employees thrive when

given clear directions. In today’s increasingly complex organizations, it’s not enough to tell people what to do.

Leaders who ask evocative questions instead of giving instructions set the stage for better communication, employee engagement and high performance, especially when they’re charged with supervising knowledge workers.

Effective communication encourages two-way conversations that traverse hierarchies and power differentials. Without this, leaders create high-risk environments.

After airplane crashes, chemical and nuclear accidents, oil spills, hospital errors and cruise-ship disasters, expert reviewers have frequently found that lower-ranking employees had information that could have prevented these events or lessened their consequences. Senior managers were guilty of ignor-ing their subordinates and being consistently resistant to hearing bad news.

Employees often worry about upsetting their bosses, so they settle for silence – a decision that exposes their organizations to risks with potentially irreversible outcomes. This dynamic plays out in government offices, hospi-tals and corporations with divisions in power and status, regardless of how democratic and “fair” they claim to be.

How can you create a climate that encourages people to speak up, espe-cially when safety is on the line? How do you convince your staff to correct you when you’re about to make a mistake?

Learn to ask the right questions instead of telling your staff what to do.Questions should be genuine, based on curiosity and without an agenda.

Effective leaders master the art of “humble inquiry,” says Edgar H. Schein, PhD, an MIT Sloan School of Management professor emeritus and consultant.

In his new book, Humble Inquiry: The Gentle Art of Asking Instead of Telling (Berrett-Koehler Publishers, 2013), Dr. Schein describes his title’s skill as “the art of drawing someone out, of asking questions to which you do not already know the answer, of building a relationship based on curiosity and interest in the other person.”

Unfortunately, asking questions runs counter to traditional business cul-tures that value achievement and performance over building relationships. Nonetheless, soliciting others’ input is a fundamental aspect of human rela-tions for leaders who want to foster solid relationships, trust, communication and high performance.

So many of our conversations lack inquisitiveness, as we’re reluctant to concede that we don’t know everything. Many organizations expect their leaders to be wise, set direction and inspire us.

In truth, leaders are the ones who should be inquiring and listening to oth-ers’ responses. Employees cannot excel at complex interdependent tasks until their leaders build positive, trusting relationships and facilitate safe, upward communication.

LEADERSHIP AND MANAGEMENT

Leading Through Inquiry: Do Ask, Don’t TellBy Chip Scholz

“Carpenters have hammers, dentists have picks, and

physicians have stethoscopes. It is hard to envision any of these people working in their chosen fields without their basic set of

tools. Managers, too, have a basic set of tools: questions.”

Terry J. Fadem, The Art of Asking: Ask Better Questions, Get Better

Answers (FT Press, 2008)


■ What’s Wrong with Telling?We live in a culture of telling,

where conversations become oppor-tunities to show how smart or funny we are. While we ask questions to show interest in another person, we just as often want to sway them to our viewpoint or get something from them.

When we tell, we put other peo-ple in a position of inferiority they come to resent. One-way communi-cation implies that they don’t know what we’re telling them and that they should already know it. This approach provokes defensiveness. People stop listening to you so they can work on a snarky comeback.

In contrast, asking questions temporarily empowers your con-versation partners, giving them an opportunity to share what they know. You deliberately put yourself in the inferior position: of wanting to know something about them. This technique opens the door to relationship-building.

Many of us do ask questions, but we fail to notice how disingenuous they are. When we ask leading or rhetorical questions, for example, we already know the answers. Our conversation becomes yet another exercise in telling.

■ The Fear Behind Asking Questions

“When we become leaders, we feel that it is important for us to have answers rather than questions. Asking questions – or being unable to answer questions addressed to us – may show that we are some-how lacking as leaders. But this at-titude leads to inertia.” – Michael J. Marquardt, Leading with Ques-tions: How Leaders Find the Right Solutions by Knowing What to Ask (Jossey-Bass, 2005)

Are you afraid that asking ques-tions will be misinterpreted as a show of ignorance? Do you find it difficult to ask questions because people will think you don’t have all of the answers?

Displaying this level of vulner-

ability is truly terrifying for many leaders.

You have to make a choice:A. Risk appearing fallible by ask-

ing questions.B. Risk creating a culture where

people wait to be told what to do.In today’s achievement-oriented

culture, displays of knowledge are admired. As Dr. Schein told a team of academic interviewers for the March 2011 edition of the journal Academy of Management Learning & Education:

“The whole point of being a leader is that you now ‘know ev-erything.’ Leaders are supposed to know what to do, so people below the leader are going to defer to him or her – let them be the deciders even if they don’t know enough to make good decisions. But in a world where leaders do not know every-thing, where the subordinates are highly skilled technicians, how are we going to get leaders to admit that they don’t know everything and ac-tually ask for help?”

Take the first step: Banish any obsolete beliefs about omnipo-tence, and focus on practicing hu-mility, Dr. Schein emphasizes. Ask real questions. Embrace the reality that you depend on your subordi-nates. There’s absolutely nothing wrong with soliciting their feedback (i.e., “Am I doing this correctly? Please tell me if I’m doing something wrong”). Employees will be flattered that you value their advice.

■ Defining Inquiry

Professional pollsters, research-ers, therapists and executive coaches have dedicated years to refining their inquiry skills. The rest of us take it for granted that we know how to ask questions. We tend to mimic our role models – usually parents, teach-ers and bosses – who rely on super-ficial or social questions that are essentially disguised forms of telling:• Why weren’t you at home (in

class, at the meeting)?• How could you screw this up?• When did I ever tell you to do this?• What were you thinking?

These seemingly open-ended questions are actually quite control-ling. If you want someone to reveal the full story, avoid steering conver-sations in any given direction. Dis-tinguish open inquiry (Dr. Schein’s “humble inquiry”) from the three other types of inquiry:1. Diagnostic2. Confrontational3. Process-oriented

■ Open Inquiry

Open inquiry evolves from au-thentic interest in another person. We ask questions to encourage hon-esty and minimize preconceived bi-ases. We have no real agenda, other than to garner information.

Your primary goals are to discov-er what’s on the other person’s mind, cultivate respect and trust, and find connections in common experiences.

Leaders who use open inquiry become more informed, closer to people and better prepared to influ-ence outcomes. You can ask ques-tions about:• Feelings and reactions• Causes and motives• Actions• Shared systems and situations

■ Diagnostic Inquiry

It’s easy to veer off the path of open inquiry by homing in on a par-ticular detail. Doing so may steer the conversation in a different direction and inadvertently return control to you.

As a leader, your perceived posi-tion may interfere with your conver-sation partner’s mental processes. This is neither right nor wrong, but recognize that you’ve left the realm of open inquiry. You’re now engaged in diagnostic inquiry.

Determine why you’re steering the conversation in a different direc-tion. Are you trying to get the job done, or are you inappropriately indulging your curiosity?

■ Confrontational Inquiry

Leaders sometimes insert their own ideas in the form of a leading or rhetorical question. By doing so,



THE “NEW NORMAL” is often described as a business environ-ment that is changing fast and often, an accurate description of today’s

global supply chain environment. Logistics service providers (LSP) need to be aware of these changes to best plan their own infrastructure network, service offerings, operating strategies and resource needs.

■ Global Sourcing Patterns

Only a few years ago, the focus of many firms in North America was on low-cost-country sourcing, particularly from China. But many of the under-lying cost drivers that once made China the off-shore sourcing location of choice for U.S. and Canadian firms have moved in the opposite direction. Rising labor, energy and transportation costs, a stronger Chinese currency, persistent quality and intellectual-property problems, and reduced tax incen-tives from government have caused firms to look to other Asian countries, like India or Vietnam, to near-shore from Mexico, or to consider sourcing or producing back in Canada or the U.S. The changing sourcing and produc-tion patterns will have a substantial impact on the origin and destination of freight flows to be managed by LSPs. LSPs need to understand how the total landed costs compare between countries as a general indicator of the trade potential in specific country-to-country origin-to-destination points. LSPs need to appreciate the benefits and risks that existing and potential custom-ers face, in their decision to strategically target customers with the greatest potential for the LSP’s service offerings. Who benefits more from nearshoring and who benefits more from offshore sourcing? What type of companies and characteristics of products are more amenable to domestic sourcing and what should be offshore sourced? What are the characteristics of industry sectors or products that are moving back all or some production to North America?

Alternatives to China have their limitations and risks, as well as benefits. Though labor costs have gone up in China, transportation and communica-tions infrastructure has been improved (some say overbuilt) with each 5- and 10-year national-development plan. Southeast Asian countries, such as India, Vietnam and Bangladesh, have a lower-cost labor force but their logistics infrastructure, regulations governing transport and trade, and logistics ex-pertise are overall barriers to seamless movement to and from those coun-tries. Mexico has low-cost labor, a skilled labor force and location, location, location, but potential security and safety issues that may cause supply chain disruptions. These logistical limitations are both challenges and opportunities for LSPs serving such countries.

Many jurisdictions in the U.S., especially in the south and right-to-work states, have relatively low labor costs, and N.A. labor productivity is gener-ally higher than any Asian country’s. But this productivity improvement has been the result of years of investment in advanced technology and the wide-spread adoption of management practices such as continuous improvement, total quality and lean management. Further productivity improvement may

GLOBAL TRENDS

International Trade and Global SourcingBy Garland Chow, PhD

Many of the underlying cost drivers

that once made China the off-shore

sourcing location of choice have

moved in the opposite direction.


be increasingly hard to achieve as the point of diminishing returns sets in. In contrast, low-cost countries that depend on low labor costs have virtually unlimited opportunity to increase productivity through the substitution of capital for labor and adoption of advanced management practices. It is too soon to determine exactly how the business costs in the U.S. will be impacted by Obamacare and increasing demands for higher minimum wages, or so called “living wages.”

■ International Trade Development

International trade patterns are also evolving. North America will remain the main destination of man-ufactured products from low-cost-manufacturing countries in Asia for decades to come, but is its growth slowing? The BRIC countries and other developing countries are rap-idly becoming destination markets for low-cost-manufacturing coun-tries, and trade agreements facilitate trade between countries in the agree-ment at the expense of trade with countries not in the agreement. Will increases in intra-Asian trade reduce or slow the growth of inter-Pacific trade? Has the growth in NAFTA-enabled trade peaked or will it ex-pand further? International trade patterns will have a substantial im-pact on the origin and destination of freight flows to be managed by LSPs.

■ Global Supply Chain Risk Management

At the same time, firms are get-ting better at recognizing the many risks inherent in global sourcing and are developing risk-management plans to avoid or mitigate supply chain disruptions, intellectual-prop-erty loss, customs and security, poor quality, and environmental and so-cial disasters. Firms are assessing the probability and the impact of supply chain disruptions, such as border closures, natural disasters, strikes and events like the factory disaster in Bangladesh. LSPs can add value to the supply chain by providing the

capacity and capability to recover from supply chain disruptions as quickly as possible.

■ Supply Chain Flow Strategy

Firms are continually adapting their product flow strategy. Increas-ingly, firms are adopting pull supply chain strategies such as postpone-ment and mass customization, which impact not only a company’s global

sourcing choices but also where val-ue-added processes and customiza-tion occur. As this trend continues, there will be greater demand for production of goods close to home (domestic and near-sourcing). For products that are still sourced off-shore, visibility, premium transpor-tation and short order fulfillment, and the location of finished goods close to customers will be needed. LSPs can provide or facilitate the


satisfaction of these customer needs. But for many products, customers will want value-added processing, such as repackaging and final pack-aging, labeling, configuration and, in some cases, product conversion. This is in addition to the traditional lo-gistics services such as transloading, break bulk, merge in transit, storage, cross docking, order processing and returns processing. These represent new revenue sources for LSPs and the entry of LSPs into providing the full gamut of supply chain processes.

At the same time, some firms have converted from a pull to a push strategy. Dell used a pull strategy, assembling most of its product from components sourced from Asia, but, in recent years, has shifted a sig-nificant portion of its final assembly to Asia. LSPs must meet the needs of different customers with differ-ent and evolving supply chain flow strategies.

■ The Demand for Sustainability

Sustainability is becoming an im-portant aspect of the brand of many firms. Consumers are choosing more

sustainable products and investors want sustainability-focused compa-nies. The impact is felt in the entire supply chain, as the decision of a firm to demand greater sustainability from its suppliers causes those sup-pliers to demand sustainable prod-ucts or service from their suppliers further upstream. Ultimately, LSPs account for a significant portion of the Scope 3 emissions footprint, especially in extended global sup-ply chains, and are thus a source of sustainability improvement. While most firms are reluctant to sacrifice direct economic profit for sustain-ability, pursuing initiatives that im-prove both traditional supply chain effectiveness and sustainability is the challenge for shippers. LSPs can pur-sue initiatives designed to increase their competitiveness with respect to both cost-effectiveness and impact on the environment. LSPs can also add value by helping their custom-ers to measure their green footprint and make operating decisions that achieve both economic and sustain-ability benefits. While not wide-spread as of yet, incentives such as carbon pricing and carbon taxes

Country

LPI Rank

LPI Score

Customs

Infrastructure

InternationalShipm

ents

Logistics Com

petence

Tracking &

Tracing

Timeliness

Development

Classification

Singapore 1 4.13 4.1 4.15 3.99 4.07 4.07 4.39 B*

Hong Kong, China 2 4.12 3.97 4.12 4.18 4.08 4.09 4.28 B

Germany 4 4.03 3.87 4.26 3.67 4.09 4.05 4.32 A

Netherlands 5 4.02 3.85 4.15 3.86 4.05 4.12 4.15 A

Japan 8 3.93 3.72 4.11 3.61 3.97 4.03 4.21 A

United States 9 3.93 3.67 4.14 3.56 3.96 4.11 4.21 A

United Kingdom 10 3.9 3.73 3.95 3.63 3.93 4 4.19 A

France 12 3.85 3.64 3.96 3.73 3.82 3.97 4.02 A

Canada 14 3.85 3.58 3.99 3.55 3.85 3.86 4.31 A

Chinese Taipei 19 3.71 3.42 3.77 3.58 3.68 3.72 4.1 B

Republic of Korea 21 3.7 3.42 3.74 3.67 3.65 3.68 4.02 B

China 26 3.52 3.25 3.61 3.46 3.47 3.52 3.8 C

Mexico 47 3.06 2.63 3.03 3.07 3.02 3.15 3.47 C

Table 1: 2012 LPI Global Ranking and Scores

*A – Developed, B – Newly Developed, C – Developing.Classification from International Monetary Fund (2012).

will sometime in the not-too-distant future eliminate the distinction be-tween economic and sustainability benefits and costs. Future-thinking LSPs will be the first movers ready to take advantage of that coming era.

■ Global Logistics Performance

Logistics can be either a barrier or an enabler of trade between coun-tries, and logistics-related costs are a key component of total landed cost. The Logistics Performance In-dex (LPI) developed by the World Bank measures key indicators of the efficiency and effectiveness of logis-tics across countries. The 2012 LPI global ranking and scores shown for selected countries in Table 1 reveal that countries whose economies are well developed and/or highly depen-dent on trade have high-performing logistics components. China has im-proved its LPI and ranks well above all of the countries now competing for low-cost-country sourcing op-portunities. Notably, Mexico ranks far behind Canada. While LSPs can-not directly influence logistics infra-structure, LSPs are a core repository of logistics competencies that impact the quality of customs, timeliness of movements, accuracy of tracking and tracing, and seamless movement of international shipping. Global sourcing patterns are thus influenced by logistics competence overall, and the success of special global sourcing decisions is critically dependent on the availability of competent logistics providers, no matter what the overall LPI is for the country. LSPs in coun-tries ranked low in the LPI should look at this as an opportunity to be the exception above the average.

■ Challenge and Opportunity Awaits Global LSPs

Global LSPs play an important role in global trade, as they are the logistical links across the global supply chain. They must be aware of trends in global sourcing and international trade, and use that information strategically. They need


What is theInternational Warehouse Logistics Association?

IWLA is the trade association for warehouse-based 3PLs. Member companies are warehouse operators serving thousands of customers – from food and pharmaceutical manufacturers to construction companies and e-tailers. The association counts everything from single-site warehouses to some of the world’s largest warehousing logistics companies among its members.

Clients of IWLA members can feel confident that their 3PLs will deliver the best-possible services because members have access to:

• IWLA education in warehouse safety, technology, operations and cost assessment;

• IWLA-retained counsel for legal and regulatory compliance;

• specialized information for warehouses that have rail service, handle chemicals or pharmaceuticals, embrace sustainable practices, and/or carry food products;

• a network of IWLA-member warehousing leaders across North America; and,

• more than 120 years of industry-association expertise.

If you own a warehouse-based 3PL and are not an IWLA member, you are missing out. Contact [email protected] to join today (or visit www.IWLA.com for more information).

If you are sourcing a warehouse-based 3PL provider, make sure you sign on with an IWLA-member company. Find one via www.IWLA.com. You’ll be glad you did.

IWLA: We are warehouse-based

3PL professionals.

to understand how firms manage supply chain risk and supply chain flow, so as to better meet needs with the right logistics and value-added services. LSPs have to be ready to

be sustainable and help their cli-ents reduce their carbon footprint. They are a key component of the logistics sector that influence overall trade flows and the success of indi-

vidual clients. The “new normal” is now the standard for the global supply chain business environment. Change is inevitable, perpetual and sometimes rapid. The best logistics service providers are those who see the threats and the opportunities in these changes and take advantage of them.

Garland Chow, PhD, is Associate Professor and Director, Bureau of Intelligent Transportation Systems and Freight Security, Sauder School of Business, University of British Columbia. He will be the keynote speaker at the IFWLA annual con-vention in Chicago on May 19. There he will discuss in more depth his observations on many of the key issues discussed in this paper, and will provide an update on his 2010 presentation to the IFWLA, “Gate-ways to North America.”


WHEN IT COMES to conveyor operation, safety should always be a top concern. With

more than 50 workplace fatalities a year where con-veyors are the primary source of injury, and workplace accidents accounting for nearly 25 percent of all work-ers’ compensation claims, you must pay attention to industry-standard safety practices.

Regardless of the type of conveyor being utilized (gravity, belt or power roller, for example), there are rules to follow that help reduce conveyor-related injuries.

What to do and what not to do when it comes to conveyor safety:

1. DO keep clothing, body parts and hair away from the conveyor: This is one of the most common reasons for conveyor-re-lated injuries, and the consequences can be devastating. Employees should keep their hands off conveyors, and visitors to your plant should be both briefed on conveyor safety and in-spected for loose clothes or long hair that could be caught before being allowed near the conveyor line. Don’t wear watches, bracelets, or rings either.

2. DON’T climb, step, sit or stand on the conveyor at any time: It may seem like common sense, but people frequently do it, and it can lead to serious injury. It’s im-perative that workers never climb, sit, stand, walk, ride, or even touch the conveyor line. People ride conveyors because it looks fun, and because it doesn’t seem as dan-gerous as it is. They’ve even seen it done in action movies. But conveyors are not built with people in mind. Pinch points can exist that could catch clothing or people, and cause serious injuries. Capacities are not designed for a human’s weight. There are many ways for conveyors to cause injuries to anyone who sits on them. Aside from the safety factor, people riding on conveyors can cause belts to untrack or damage the system.

3. DO ensure that all personnel are clear of equipment before starting: OSHA conveyor standards state that conveyor systems should be equipped with a warning signal to be sounded prior to start-up. But companies

SAFETY

10 Ways to Make Conveyor Operations SaferFrom Cisco-Eagle

should not stop there; training should also be included about what the warning horn means and how injuries can occur if it’s ignored.

4. DON’T remove or alter conveyor guards or safety divides: Removing guards exposes machinery, gears, chains and moving parts that can be dangerous. To help ensure worker safety, lock out conveyors when in service, and operate equipment only when all approved covers and guards have been reinstalled.

5. DO know the location and function of stop/start controls: It’s imperative that anyone who works in a conveyor area be familiar with the location and function of emergency stop and start controls. Employers should

train workers about the controls, where they are, when to use them, and how to access them. The controls should be marked to avoid confusion and allow workers to make fast deci-sions about using them. Conveyor emergency stops are vital.

6. DON’T perform service on a conveyor until motor disconnect is

locked out: Avoid performing any maintenance until electrical, air or hydraulic power sources are disconnect-ed or blocked out. Lockout/tagout systems can prevent equipment from being powered up while maintenance or repairs are being done.

7. DO allow only authorized personnel to operate/maintain material-handling equipment: Only those em-ployees who have been trained to operate and perform maintenance on conveyors should do so. This ensures both technician safety and optimal conveyor perfor-mance.

8. DON’T modify or misuse conveyor controls: Con-veyor controls should never be modified by unqualified personnel. Be sure to monitor your controls to ensure that no employee has misused, modified or disconnected them. At times, employees can make modifications that work for a specific area or function, but can contribute to a less safe working environment. Be sure that they understand that conveyor controls are typically part of a larger system, and that any changes must be approved by

Making safety a priority could mean

the difference between a workplace

injury and a productive, efficient

working environment.


My clients are:• Clear on what’s important to them• Focused on results• Paying Attention to new opportunities• Intentionally creating the future, not just letting it happen

Is your business where you want it to be? Are you where you want to be? If not, call Head Coach Chip Scholz or check us out on the web to learn more about taking your success to the next level.

Work with an executive coach and look in the right places.

Success cannot be found in a box.

Call 704-827-4474www.scholzandassociates.com

management.9. DO make conveyor safety train-

ing a priority: Any facility that utiliz-es conveyors should train employees in safe operations. Regular, frequent updates and refresher courses should be included in the training program, and preventing unsafe acts should be a part of company culture. Visi-tors should also be informed of safe behavior standards if they are going to be near conveyors.

10. DON’T fail to report all un-safe conditions to your supervisor: Your company culture of safety should encourage workers to report unsafe conditions like loose guards, or people working too closely with the conveyors with unrestrained clothes or hair. Training about safe-ty issues and when to report them should be made to all employees and repeated often. Allow anonymous or “no consequences” information submissions when it comes to safe situations and behavior; the main thing is to be sure unsafe practices, equipment or people are reported

and dealt with in a way that helps make the conveying equipment safer for everyone.

Since conveyors of all types have many moving parts, anyone who works on, near or around them should be well-versed in conveyor safety and understand why each of the above rules is important and

necessary. Making safety a priority could mean the difference between a workplace injury and a productive, efficient working environment.

This article is provided by Cisco-Eagle, a national material-handling-systems and equipment provider headquartered in Dallas, Texas.


THE PROFESSION of warehouse management evolves as new laws and regulations, new customer

demands, new technology, and new perspectives on op-erations come into play.

How can you ensure your warehouse and your staff remain ahead of the curve? Developing a peer network is one of the first steps – and IWLA gives you access to a built-in community. Face-to-face gatherings, like the IWLA Convention & Expo, further solidify these rela-tionships.

Another great way to evolve is to expose your staff to continuing education specifically focused on warehouses (and the professionals that run them). As the only trade association for warehouse-based, third-party-logistics organizations, the International Warehouse Logistics As-sociation provides education tailored to its audience of warehousing professionals.

The IWLA Convention & Expo is the warehouse-based 3PL’s only dedicated convention and trade show. Each of the remaining IWLA in-person events takes a deep dive into a specific segment of the warehousing business. The curriculum is created by a group of expert practitioners – your warehousing peers – who vet the content and ensure its relevance.

Make it a goal in 2014 to discover for yourself why nearly 80 percent of members participate in IWLA’s edu-cational offerings.

(Nearly 80 percent of members participated in IWLA’s educational offerings based on results from the 2013 Member Needs Assessment.)

■ IWLA Economics of Warehousing & 3PL Sales Course

This course is an evolution of the popular IWLA Costs, Rates & RFPs Responses Course. It showcases how you can master the art of assessing your own costs and calculate your rates for the most profitable use of space. It also highlights industry-specific sales and mar-keting techniques that will bring new clients to your warehouse. Course attendees will hear from industry veterans with proven track records in creating business plans around clients’ needs while keeping an eye on in-creasing a warehouse’s bottom line.

This event is slated for May 7–8 in Orlando, Fla. Registration is now open.

■ IWLA Warehouse Legal Practice SymposiumLegal liabilities and accidents come with the territory

in warehousing and logistics. IWLA member companies know that understanding your rights under the law will determine who becomes victimized and who comes out ahead when things go awry. The IWLA Warehouse Legal Practice Symposium features top-tier attorneys special-izing in warehousing legal liabilities, insurance and labor issues. Attendees will walk away with actionable knowl-edge around real-world case studies and the latest issues to affect the industry that can protect businesses from unexpected predicaments.

Be in Chicago June 18–19 for this popular event. Registration opens soon.

■ IWLA Safety & Risk Conference

Warehouse and transportation safety are always paramount. Make safety-and-risk training a high prior-ity in your company by attending the IWLA Safety & Risk Conference. Attendees of this two-day course leave with new information for analyzing risks, creating safety plans and enforcing these processes in companies. The event includes operational, insurance and transportation experts discussing processes and procedures that foster a cultural safety-driven mindset that keeps employees in check through accountability.

This event will be on September 10 and 11, in Fort Worth, Texas. Registration opens soon.

■ IWLA Essentials of Warehousing Course

One of the longest-standing courses IWLA offers keeps its focus on improving future warehousing lead-ers in many skills areas. This four-day, intensive course brings seasoned practitioners from the industry to teach about each component of warehousing and logistics businesses: technology, safety, sales, marketing, legal and operational strategies for increasing efficiency and productivity within a company. Attendees, usually entry-level to mid-level professionals, use the IWLA Essentials course to refresh their knowledge and implement new strategies to improve performance in all areas of the business.

The IWLA Essentials Course returns to the University of Maryland in Adelphi from October 7 to 10.

IWLA EDUCATION PREVIEW 2014

Continuing EducationIWLA Provides Warehousing-specific Learning Opportunities


aggregate global revenues for the 3PL sector continue to rise, Latin America saw slowing of growth compared with last year. One con-sistent finding throughout the 18 years of Annual 3PL Studies is a rel-atively predictable “ebb and flow” of outsourcing vs. insourcing in the 3PL marketplace. Shippers and 3PLs are about equally satisfied (70 per-cent and 69 percent, respectively) with the openness, transparency and good communication in their rela-tionships, and 66 percent of shipper respondents judge their 3PLs as suf-ficiently agile and flexible to meet future business challenges.

Shippers reported an average lo-gistics-cost reduction of 11 percent. The average inventory-cost reduc-tion was 6 percent, and the aver-age fixed-logistics-cost reduction was 23 percent. These figures are down modestly from those reported in last year’s study, but confirm the reasons 90 percent of shippers reported that their relationships with 3PLs gener-ally have been successful. Consistent with past studies, transactional, op-erational and repetitive activities tend to be the most frequently outsourced, in relatively stable numbers, but this year’s results suggest some modest in-creases in the prevalence of outsourc-ing some activities that are strategic, customer-facing, and IT-intensive.

For more information on the study and to download the cur-rent and previous studies, visit www.3PLStudy.com.

Melissa Hadhazy is Senior Manager at Capgemini Consulting.

STUDY from page 29

you’re tacitly giving advice and try-ing to influence your conversation partner’s answers. Your partner may experience this as manipulative and become resistant.

Table 1 identifies the differences in how these questions are asked.

Confrontational questions can be open, as long as your conversation partner believes you’re trying to be helpful. Timing, tone of voice and other cues will establish your motive.

■ Process-Oriented Inquiry

Leaders practice process-oriented inquiry when their focus is the con-versation itself. This may be helpful when a discussion starts badly. You can explore solutions by asking:• “What’s happening right now?”• “Are you feeling defensive?”• “Have I offended you in some

way?”• “Are we OK?”• “Anything else we need to say

about this?”• “What should I be asking now?”

■ Conquering the Countercultural

As the researchers who inter-viewed Dr. Schein reinforce in Acad-emy of Management Learning and Education: “In most cultures, ask-ing and accepting help from a subor-dinate or admitting not knowing the answer to a subordinate’s question

disrupts the normal social order. It is ‘countercultural,’ thus often ‘not done,’ and might be felt by the leader as a loss of face and even career-threatening in highly political organizations.”

The underlying attitude of com-petitive one-upmanship that plagues senior leadership teams will continue to stifle inquiry until you shift your attitude. Focus on being curious about others, without letting per-sonal expectations and judgments cloud communication. Enjoy the benefits of asking meaningful ques-tions in a psychologically safe work environment.

It takes discipline and practice to allow yourself to appear vulnerable. Consider working with an executive coach to break through any vulner-ability barriers and perfect the art of humble inquiry.

■ Quote of the Month:

The two words “information” and “communication” are often used interchangeably, but they sig-nify quite different things. Informa-tion is giving out; communication is getting through. – Sydney J. Harris

Chip Scholz is head coach of Scholz and Associates, Inc. and serves on the IWLA board of directors. This article originally appeared in The Scholz Report. It is republished here with permission.

Table 1

Confrontational Open

“Did that make you angry?” “How did that make you feel?”(feelings and reactions)

“Do you think they sat that way because they were scared?”

“Why do you suppose they sat that way?”(causes and motives)

“Why didn’t you say something to the group?” “What did you do?”(actions)

“Were the others in the room surprised?” “How did the others react?”(shared systems and situations)

INQUIRY from page 31

■ IWLA Technology & Operations Solutions Conference

Advanced technologies are criti-cal to warehouse-based 3PL suc-cess. Identifying needs and areas of improvement and sorting through a multitude of technologies and software can be an overwhelming task. This course brings together the latest innovations and products (and their manufacturers) with the

best warehouse IT and operations leaders. The conference is full of peer-to-peer sharing of business and technology challenges and discus-sion about solutions.

Spend November 12 to 14 in Chi-

cago for the 2014 IWLA Tech/Ops Conference.

For more information about IWLA education, please contact [email protected] or call (847) 813-4699.


WHEN a third-party-logistics provider contracts with a customer to supply warehouse services

at the customer’s facility, whether it is owned or leased, the two parties sign a contract-warehousing agreement. Services normally provided through such an agreement are shipping, receiving and inventory control; it may ex-tend to cover many other value-added services provided by 3PLs.

Generally, under a contract-warehousing agreement, a 3PL’s exposure to a warehouse legal liability claim is greatly reduced, because it is not responsible for the building condi-tion, sprinkler systems, alarm sys-tems or roofing. The main exposures are mysterious disappearance, inven-tory shortage, voluntary parting, rack collapse and similar claims that could arise out of the negligence of the warehouse operator.

One of the most overlooked uninsured exposures in a relationship of this kind is damage the 3PL may do to the building, such as hitting a support beam with a forklift causing roof damage or collapse, hitting walls, or other activities that result in damage to the building or its elec-trical, plumbing or other mechanical systems.

If such an accident happens, the building owner or whoever is responsible for insuring the building will submit a claim to his insurance company. The insurance company will then seek recovery from the negligent third party, the 3PL operator. In the basic coverages that most operators carry, such as comprehensive general liability, this exposure is not covered. It is also not covered in the warehouse legal liability policy, which pertains only to goods in the care, custody and control of the operator, not to the building.

So how should the 3PL address this situation without spending additional money on insurance? This exposure needs to be addressed before you sign any contract-warehouse agreement.

There are two different possible situations.If the customer owns the building, the agreement

should include a waiver of subrogation that states who is responsible for insuring the building. The waiver should say that the building owner and its insurer waive all rights of subrogation to losses that are covered or should

THIRD-PARTY CONTRACTS

Contract-Warehousing ArrangementsBy William W. Clark, CPCU

have been covered under the building owner’s insurance policy. This eliminates the need for duplication of cover-age; the 3PL does not also have to purchase building-damage legal liability insurance. As most agreements of this nature are based on a cost-plus arrangement, this will reduce the customer’s costs through reducing the 3PL’s operating costs, a selling point for the customer.

A more-difficult situation exists when your customer is leasing the building that your company is to operate. In this case, before you sign the contract, it is imperative

that you have the lease your customer has executed with the building own-er reviewed by both your attorney and, more importantly, your insur-ance agent or broker, assuming he or she understands lease provisions that could result in uninsured liabilities.

Through this review, you will avoid being exposed to li-ability if damage to the building is deemed to have been caused by the negligence or actions of your employees, and you will not need to buy additional insurance. Sim-ple amendments can be added to the lease and/or your operating agreement with your customer that protects all parties without any increase in costs.

We came across one warehouse operator that was unnecessarily paying more than $50,000 in premiums to cover this exposure. Simple amendments would have eas-ily addressed the situation and eliminated this expense.

In all aspects of operations in which a 3PL is engaged, it is important that a complete risk analysis be done to identify any new or additional exposures the 3PL is assuming and whether or not its current insurance pro-gram addresses those exposures. If it is determined that coverage is lacking, the operator should investigate the possibility of modifying agreement wording to eliminate liability issues.

There are many ways to handle risk exposure without the need to purchase more and costly insurance. Insur-ance is only one part of a comprehensive risk-manage-ment program.

William Clark is president of WIMCO Consulting in Anaheim, California. WIMCO is an associate member of IWLA.

Insurance is only one part of a

comprehensive risk-management

program.


By Kim BiggarSeeking a “mountain they hadn’t climbed” led Timothy Anderson, director of the University of Massachusetts Minuteman Marching Band – and son of former IWLA president Joel Anderson – to apply for the band to participate in the 2013 Macy’s Thanksgiving Day parade on November 28. Accepted in March 2012, the band had a year and a half to plan and prepare for the event.

“You see marching bands at football games… most people would never think of all of the logis-tics involved in getting them there,” says Ander-son. With almost 400 members, plus staff, the band is among America’s largest college marching bands, and doesn’t go anywhere without a de-tailed plan. The Macy’s parade, though, took the need for a plan to new heights.

On the to-do list: arranging hotel rooms for 400 on a busy weekend in NY, planning meals for the three-day trip (including a Thanksgiving dinner served at the hotel on the day the band arrived in the city), preparing the songs and marching rou-tine for a 2.5-mile walk, organizing transportation to, from and within the city, and refining a precise and speedy equipment-loading and -unloading plan.

While some marching bands have trailers fit-ted with customized racking and special carts for moving all of their musical instruments and equipment, the UMass band simply rents two 20-foot box trucks and transports its instruments in accordance with a detailed plan for placement of each piece. (It also uses space for instruments in the storage bays of the seven buses required to move band members.) The packing plan is precise and well-practiced.

The unloading process is also well-practiced, which proved to be critical to its success in the

Marching Band Logistics: Every Detail in Quick-Speed Moves Planned

Macy’s parade. Because so many performers and floats were congregating in the area near the starting point of the parade, the band’s trucks and buses had to get into and out of the area on a very tight schedule. Tubas and drums, the bulkiest of the group’s instruments, were unloaded within three minutes and in the hands of the right per-formers; the rest of the instruments followed at the same quick pace. Everyone involved had an assigned task. The band has the loading and un-loading of its instruments and equipment “down to a science,” says Anderson.

November 27 was practice day in the hotel’s ballroom. The band rehearsed their songs in seg-ments – the room wasn’t large enough to accom-modate all members – and marched in place.

On parade day, up at 3:00 a.m., the band was delivered to the Macy’s store for a rehearsal in front of the TV cameras at 4:00. UMass Band Trucking – the band’s volunteer drivers, all of whom have commercial driving licenses – then returned the students and staff to the hotel to eat and check out, and collected them later for the pa-rade’s 9:00 start. After dropping off the band, the drivers picked up a pre-ordered deli lunch for the band and drove to the end of the parade route to wait for the marchers.

“The logistics behind a marching band’s par-ticipation in a parade are hard to appreciate,” says Anderson. He and the band’s associate di-rector, Thom Hannum, spend a lot of time during the summers planning for the year ahead, taking into account any new requirements and coming events, and preparing an in-depth schedule that charts out the band’s practices. While they’re not logistics professionals, they’ve certainly learned enough on the job to pull off some pretty impres-sive logistical feats.


3PL Americas™

2014 IWLA CONVENTION & EXPO — PAGE 8

INSIDE:3PL Services for the MilitaryChemical Council Roundtable

Federal Government Contracts

THE MAGA ZINE OF IWL A IN NORTH AMERICA • FALL 2013

www.IWLA.com

PM 42128520

Future Issues of 3PL Americas

3PL Americas is the magazine of IWLA and provides members and non-members with news and informa-tion on concepts and best practices in warehouse and logistics management. The lead articles for upcoming issues are set well in advance. We welcome reader input on themes and articles for future issues.

Lead article themes and deadlines:

• Spring 2014 – Post-conference issue: Maximizing Human Capital, Part II (April 14, 2014)

• Summer 2014 – Converting RFPs to Contracts (July 14, 2014)

• Fall 2014 – International Logistics

Operations (October 17, 2014)

• Winter 2015 – Pre-conference issue: (January 16,

2015)

Suggestions for authors, articles and themes can be submitted to [email protected].

ADVERTISER INDEX

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McKenna Logistics Centres ......... 18

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Editorial and Advertising

Disclaimers

The editorial contents of this publi-cation are educational and informa-tional in nature, and not intended as minimum standards, or legal or other professional advice.

The International Warehouse Logis-tics Association has endeavored to include appropriate and accurate statements, but disclaims any and all warranties and/or responsibility for the statements or their applica-tion. Users should confer with their professional advisers for specific in-put and assistance concerning their respective projects.

Any expressions of opinion or per-spective by authors of articles in-cluded in this publication are not necessarily those of the IWLA.

The inclusion of commercial adver-tisements in this publication consti-tutes neither a recommendation nor an endorsement of the product or service advertised. Although the In-ternational Warehouse Logistics As-sociation will not knowingly publish a false or misleading advertisement, no attempt has been made to verify the contents of advertisements in-cluded in this publication unless other than as set forth in writing by IWLA.

IWLA Events Calendar★ IWLA Winter Legislative Fly-in

February 11 – Washington, D.C.

★ 2014 IWLA Convention & ExpoMarch 23 to 25 – Phoenix, Ariz.• March 21 – IWLA Executive Committee Meeting and Board Dinner • March 22 – IWLA Board of Directors Meeting

IWLA–Canada Spring ConferenceApril 30 – Toronto, Ont.

★ IWLA Economics of Warehousing & 3PL Sales CourseMay 7 to 9 – Orlando, Fla.

★ 2014 IFWLA Annual ConferenceMay 18 to 21 – Chicago, Ill.

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