CSCMP's Supply Chain Quarterly
December 11, 2017
Supply Chain Executive Insight E-Newsletter
Each week the Supply Chain Executive Insight e-newsletter will include brief articles about developments that are often overlooked by other supply chain publications. We will present you with summaries of the latest research as well as new ideas on how to make your supply chain operations more effective. And we'll offer commentary that sheds light on what's happening in supply chains today.
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Share your ideas with CSCMP's Research Strategies Committee

Supply chain professionals work in a fast-paced environment that values innovation. That's one reason why CSCMP's Research Strategies Committee (RSC), chaired by Dr. Nancy Nix of Texas Christian University, is charged with identifying and delivering new information of interest to the supply chain leaders of tomorrow.

The RSC also develops products that address the broad range of perspectives required for effective supply chain management. Among the topics it has investigated are supply chain innovation, new product development, global challenges, environmental sustainability, organizational design, and supplier relationship management, to name just a few.

There are a variety of ways the committee shares information with CSCMP members. In some cases, the group engages experts to develop a topic for CSCMP Explores… or asks them to focus on a particular region of the world for an issue of CSCMP Global Perspectives. These publications were developed under the leadership of former RSC Chair Dr. James R. Stock as a means for quickly getting important information out to members.

In other cases, the committee sponsors indepth research to develop new ideas and approaches in supply chain management. For instance, in 2007 CSCMP commissioned a team of researchers from the University of North Texas and the software firm SAS to complete a project on integrated supply chain costing. Look for the results of this groundbreaking research at CSCMP's Annual Global Conference 2008 in Denver, Colorado, U.S.A.

Much of the RSC's work is what might be termed "nontraditional." Podcasts, openenrollment workshops, and webinars are a few of the options for bringing information on "quick hit" hot topics to a broader audience in new and different ways.

The RSC is made up of a diverse group of CSCMP members, with representatives from academia, consulting, retailing, manufacturing, and sourcing organizations. It is now developing an equally diverse research agenda based on input from the supply chain community. Through an August 2006 member survey and a research forum conducted at CSCMP's Annual Conference, the RSC has been soliciting ideas that will guide research strategies for the next three years.

Your input and participation will help the Research Strategies Committee accomplish this objective. If you have ideas for research topics or would like to get involved in future projects, visit the committee's web site. You may also contact the RSC at CSCMPResearch@cscmp.org or the CSCMP Research Project Coordinator at


First Student Showcase a great success

By Erika Roberts, student assistants chair, CSCMP 2007 Annual Conference Planning Committee

For years, CSCMP'S Annual Conference has offered attendees an informal avenue for prospecting new talent by way of the Student Assistant Program. This program allows Roundtables to hand-pick students from their regions and sponsor them for the conference, where they split their time between behind-the-scenes work and learning. This year, however, we brought student opportunities to the next level with the inaugural Student Showcase.

The Student Showcase was a one-day, prominent display of students' résumés, projects, and papers that also afforded attendees the opportunity to meet with students and conduct interviews on-site. Because these students are selected based on their scholastic performance, passion for the profession, and participation in extracurricular activities, this was a unique recruiting opportunity for companies that want to connect with the supply chain stars of tomorrow.

Although this was CSCMP's first year hosting the Student Showcase, more than 25 companies conducted over 50 interviews—and countless attendees gathered résumés to take back to their organizations. The event was so successful that we will formalize and expand the program for next year. We plan to include booths for all-day interviewing by a single company, keep the Student Showcase open for the duration of the conference, and improve on-site, "soft-copy" résumé filtering. In addition, we anticipate keeping elements that made this first year's event so successful, such as online résumé viewing and allowing human resource representatives to participate without attending the entire conference.

If you have comments or suggestions about the Student Showcase or are interested in helping us further develop this exciting program, please contact Sherrie Nauden, CSCMP's Manager of Roundtables, at or +1-630-645-3466. We look forward to seeing you at our 2nd Annual Student Showcase!


New program recognizes professional achievements

The advancement of the supply chain profession is job one at CSCMP. It's a mission that's much in evidence as the organization debuts a new recognition for professional achievements, the Supply Chain Professional and Senior Supply Chain Professional designations.

Unveiled at CSCMP's Annual Conference in October, the program provides a framework for formal recognition of excellence in the supply chain profession. It was modeled after similar recognitions developed by CSCMP members who work at companies like Intel, Ericsson, and IBM.

CSCMP Director of Education and Research Kathleen Hedland and her staff, in concert with committee members representing both private business and academia, developed guidelines for the skill set and professional achievements needed to attain those honors. Nominees must demonstrate: high levels of supply chain experience and expertise, contributions and influence both within the company and in industry, and standing as a role model, mentor, or coach. Companies will select employee nominees based on CSCMP's criteria; the organization will then review the applicants and award the designations.

Hedland explained at a special session during the conference that this is not an exam-based certification program, nor does it displace any existing professional recognitions. Instead, it is designed to help corporate management value the critical role of supply chain professionals in their companies' success and to encourage professionals to expand their cross-functional experience.

For more information about the program, send an e-mail to


2007 Annual Conference Report

One of the great values of attending CSCMP'S Annual Conference is the chance to hear the latest thinking from some of the world's leading logistics and supply chain management practitioners, consultants, and academics.

During the conference, which drew some 3,500 participants to Philadelphia in October, some of the profession's most highly regarded thought leaders spoke about everything from environmental and ethical issues to demographics and security concerns. Also on the agenda were educational sessions that focused on some of the nuts and bolts of managing supply chain operations, including transportation, warehousing and distribution operations, and procurement. Other notable events included the election of a new slate of officers and the announcement of annual academic and professional awards and recognitions.

What follows are some of the highlights of the 2007 Annual Conference, as reported by the editorial team of CSCMP's Supply Chain Quarterly.

New officers take their seats
An important part of every Annual Conference is the passing of the baton to a new slate of officers who bring their energy, enthusiasm, and ideas to CSCMP's Board of Directors. CSCMP's 2007–2008 leadership will continue to work closely with President and CEO Rick D. Blasgen:

  • Chair of the Board of Directors: Richard Murphy, president and CEO, Murphy Warehouse Company
  • Immediate Past Chair of the Board of Directors: Ed Huller, president, Alden Consulting Group
  • Board Chair-Elect: Roger W. Woody, General Manager, Transportation Logistics, EMBARQ
  • Board Vice Chair: Robert Silverman, Vice President-IT Business Systems, Tommy Hilfiger USA Inc.
  • Secretary and Treasurer: Keith Turner, General Manager, Alumina and Bauxite Sales, ALCOA, Inc.

View a list of the committee chairs who have been appointed to the Board of Directors.


CSCMP recognizes excellence

A number of special achievements were recognized at the Annual Conference. Here is a brief rundown of the awards that were presented for excellence in business and academics:

  • The 2007 Distinguished Service Award was presented to Dr. Thomas W. Speh, James Evans Rees Distinguished Professor of Distribution at Miami University in Oxford, Ohio, U.S.A. Dr. Speh, the author of more than 50 scholarly articles, research monographs, and textbooks, is a former president of both CSCMP and the Warehousing Education and Research Council (WERC).
  • The 2007 E. Grosvenor Plowman Award went to Yuliang Oliver Yao, assistant professor, Lehigh University, and Yan Dong, assistant professor, and Martin Dresner, professor, both from the University of Maryland, for their co-authored research paper, "Managing Supply Chain Backorders Under Vendor- Managed Inventory: A Principal Agent Approach and Empirical Analysis."
  • The 2007 Bernard J. La Londe Best Paper Award was presented to Thomas J. Goldsby, associate professor of supply chain management, University of Kentucky, Stanley E. Griffis, assistant professor of logistics management, Air Force Institute of Technology, and Anthony S. Roath, assistant professor, University of Oklahoma, for their co-authored paper, "Modeling Lean, Agile, and Leagile Supply Chain Strategies."
  • Dr. Arunachalam Narayanan, assistant professor at the Dwight Look College of Engineering, Texas A&M University, is the recipient of the 2007 Doctoral Dissertation Award. Dr. Narayanan's winning manuscript was "Improved Formulations, Heuristics and Metaheuristics for the Dynamic Demand Coordinated Lot-Sizing Problem."
  • Julie Hoopes received the 2007 CSCMP Undergraduate Paper Competition Award for "Deciding to Offshore: Incorporating the Cost of Lost Flexibility." She received her Bachelor of Science CSCMP recognizes excellence degree in logistics management and marketing, with a minor in economics, from The Ohio State University's Fisher College of Business.
  • The Supply Chain Innovation Award was presented by CSCMP and Global Logistics & Supply Chain Strategies magazine, to the Aidmatrix Foundation.
    The Aidmatrix Foundation and the National Association of Free Clinics developed an Internet-based collaboration network that has facilitated over US $50 million in donations of products that would otherwise have been discarded and over US $1 million in savings from collaborative buying and real-time data integration with suppliers.
  • CSCMP partnered with the U.S. Environmental Protection Agency to present the SmartWay Excellence Awards to 34 companies and organizations for their leadership in conserving energy and lowering greenhouse-gas emissions from their transportation and freight activities. (See photo at left.) CSCMP is an Affiliate Member of the SmartWay Transport Partnership.
  • Fifteen graduate students were presented with scholarships from the George A. Gecowets Graduate Scholarship Program. Each received an award in the amount of US $2,000 and two CSCMP research publications. Upon completion of his or her graduate program, recipients will receive a complimentary registration to CSCMP's Annual Conference and a one-year CSCMP membership.

CSCMP session sampler

If you weren't able to make it to the 2007 Annual Conference in Philadelphia—or you were there but couldn't get to all of the educational sessions you would have liked to attend—the following summaries will give you a taste of what you missed. Session presentations and video interviews from the conference are also available at CSCMP's web site through December 31, 2007. All of these informative presentations require a member log-in.

Carly Fiorina: Supply chains drive change
Could integrated supply chains provide a model for governments and other institutions for how to collaborate on initiatives to thwart terrorists or respond to disasters? Former Hewlett-Packard CEO Carly Fiorina suggested as much in the conference's opening keynote address.

"What you folks do in the supply chain is tough," she told her audience. "Companies and organizations are naturally oriented vertically. Supply chains have to be horizontal, so what you do cuts across the grain of the entire operation."

Fiorina noted that she firmly believes horizontal thinking is critical to business success in the 21st century, and she went on to point to successful supply chains as the best example of that. She explained that when she took over at HP, it had 87 separate business units, each with its own supply chain. "I don't know how the company could have thought 87 different supply chains was a good thing," she said. "It not only kept us from being able to focus clearly enough on the customer but it also meant we couldn't leverage the scope of our company."

Under her stewardship, HP boiled down its operations to five supply chains. That improved customer service and saved the company upwards of $1 billion annually. It also taught Fiorina a lot about the difficulty of change and the importance of collaboration. "I've been the subject of change in an organization, and I've been the leader of change," she said. "It's never easy. It's naturally resisted. That's one of the reasons I have so much respect for what goes on in logistics and supply chain. The supply chain cuts across all aspects of a business. As a result, logistics and supply chain represents one of the principal drivers of change in the business world today."

Integrating 87 disparate supply chains into just five also required a good deal of internal collaboration. "We had a wonderful set of products and services that were available to offer the customer an integrated solution to their needs," she explained. "But because of our supply chains, we could not get the integrated solution to the customer in a simple, unified, and integrated fashion. Essentially, our customer service performance didn't match the capabilities of our products. We were not paying attention to how our internal processes benefited—or more often, didn't benefit—our customers."

Fiorina believes the lessons HP learned about the value of collaboration can be applied beyond the world of business. She pointed to Hurricane Katrina and the 9/11 attacks as cases in which government agencies' failure to collaborate resulted in less than desirable performance. In the case of 9/11, for example, there was a notable lack of coordination among organizations like the FBI, the CIA, and local and state law enforcement agencies, she said. "Because all these entities were operating in their own operational silos, we missed some clues as to what may be coming and we may have missed a chance to stop it."

Supply chain at center stage
For most of the history of commerce, managing transportation was a primary focus of what we today call supply chains, said Dr. Donald J. Bowersox during an education session at the CSCMP conference. It was not until the 1950s that business managers began to develop "total cost awareness." Then came customer service, outsourcing, globalization, and integrated supply chain management. Bowersox, who is professor of business administration and dean emeritus of the Eli Broad Graduate School of Management at Michigan State University as well as one of the profession's pre-eminent thought leaders, offered his views at a session on the evolution of supply chain management.

What's developing now, Bowersox said, is the concept of responsive supply chain management. The supply chain is not an organization, but a strategy that provides a framework for organizing the pieces of the supply chain into collaborative relationships, he said. He added that developing collaborative relationships on a broad scale was not possible until the development of enabling technologies.

Supply chain managers are important to business success, he told his audience. "We don't always recognize how important we are."

But Wall Street may. It's taking a growing interest in how well—or how poorly—businesses manage their supply chains. Why? Charles Poirier, a partner in the consulting firm Computer Sciences Corp., told an educational session later in the conference that investors understand that a supply chain can increase shareholder value.

Poirier reported on a study conducted by CSC jointly with Michigan State University that asked managers to rate their own supply chains in eight categories. Using the results, the researchers divided companies into three categories: leaders, followers, and laggards. One of the key factors differentiating the laggards from the leaders, he said, was that laggards focus primarily on controlling supply chain costs, while leaders have turned their supply chains into a means of generating new revenue. Leaders recognize that looking solely at costs leads to diminishing returns, he said. But only about 25 to 30 percent of companies have looked at revenue generation through their supply chains, he added.

Supply chain managers can affect revenue through efforts to improve customer service and to get better forecast accuracy with improvements in sales and operations planning as well as through collaborative analysis of data with customers and suppliers. "What separates the leaders is that they are breaking down silos," Poirier said.

Taking on the aging work force
If you're a speed reader, a half-dozen or so people in the United States will have turned 61 by the time you finish reading this story. (Slower readers can tack on a few more new 61-year-olds.) Statistics show that somebody turns 61 every 7 seconds in the United States, a trend that might have serious ramifications for companies that don't start to prepare now.

A presentation on "Disruptive Demographics and the Supply Chain" revealed how the aging of the baby boomer generation is a serious issue for both businesses and economies. Within the next 10 years, 14 percent of the U.S. population will turn 60. For logistics businesses, the aging of its workforce is even more dramatic. For example, CSX Transportation, a major U.S. railroad, will see 40 percent of its workforce turn 60 over the next 10 years. Replacing those workers as they retire will pose serious hiring challenges for the railroad, said Dale Lewis, assistant vice president for labor relations at CSX. Compounding CSX's recruitment problems will be the difficulty finding women to fill the often rigorous jobs on its 23,000-mile rail network and the company's policy against hiring high school students because of the physical risks entailed in rail operations.

However, CSX is out in front on the aging issue. For starters, it has found a new recruiting source, namely people returning from active military duty. More than 20 percent of its new hires have military experience.

CSX is also employing unique training and education programs for new hires, designed to lessen the injury rate and keep employees healthy. As a result, CSX's injury rate has dropped from 3.76 percent in 2003 for new hires with less than two years experience to 0.5 percent in 2007. To date, 40 percent of its employees have graduated from its training center, and the company expects that 82 percent will come through the training program by 2011.

"We're changing the whole paradigm for how we recruit," said Lewis. He called the graying workforce "a big opportunity, not just a big threat."

Like CSX, drugstore chain CVS is also finding employees in unusual places. The company filled many vacancies at its Texas distribution center by working with SER National, a nonprofit organization that helps place mature Hispanics in jobs. CVS is also working with the United Way to capture the interest of career changers. The company hired 1,000 people to fill positions in its distribution network last year, and 10 percent were over age 50. Kevin Smith, senior vice president of supply chain and logistics for CVS, said that 25 percent of the company's 8,000 distribution center workers are over age 50. By 2017, that number will grow to 33 percent, when the average CVS worker will be just under 44 years old.

"We have been quietly … adapting our distribution network for an aging workforce," said Smith. Specifically, CVS is relying more on automation to bring goods to order pickers, thereby reducing the amount of walking that they need to do. The drugstore chain is also employing pick-to-light and voicedirected picking. In addition, it has implemented process changes to make it easier to move carts and dollies of products, and it has staggered hours to accommodate older workers.

Suppliers go better with Coke
At the Coca-Cola Co., suppliers are treated like good customers.

At first blush, that may seem backwards, but the Atlanta-based beverage giant maintains that it's a formula for success. Coke's supplier relationships are based on customer relationship management (CRM) systems, said Martha Buffington, manager, procurement process improvements for the beverage giant. "We are using value to sell them on doing business with us," she noted during a well-attended educational session.

Coca-Cola holds an Annual Conference for its biggest suppliers every year, and executives on both sides of the table meet periodically to make sure they're on the same strategic wavelength. Coke also holds an "innovation showcase," where suppliers can bring their ideas for new products and process improvements. In addition, Coke helps its suppliers improve their own performance, assisting them to keep quality high and costs low.

The company does this with a specific objective in mind—to become a "customer of choice" for suppliers of sugar, flavorings, containers, and other ingredients and supplies. In Coke's definition, a customer of choice consistently receives preference for resources from strategic suppliers. By making those relationships airtight, the company expects to reduce its risk of encountering supply shortages or delays.

Coke uses a four-step approach that includes reviewing business strategies and determining which of their suppliers' capabilities could be leveraged to achieve those objectives; segmenting suppliers according to their strategic and tactical values; determining actions and the associated resources required to carry them out; and monitoring those activities and measuring the results.

It's a successful model that Coca-Cola has begun applying to its operations worldwide. Suppliers are evaluated less on volume and cost and more on a cross-functional view of risk versus rewards. The company also works with suppliers to jointly solve problems based on shared metrics and to find value in areas other than cost cutting.

Design right to limit returns

In a session on retail strategies, Professor James Stock of the University of South Florida offered an interesting take on reverse logistics. In effect, Stock recommended that, rather than trying to optimize their reverse logistics operations, companies should instead concentrate on developing strategies for eliminating returns.

As for how companies can do that, Stock offered the following advice:

  • Standardize on sizes across your catalog. If a consumer finds that medium fits in one line of clothing, for example, that consumer should be able to assume that medium will fit throughout all the lines in your catalog.
  • Train your customer service representatives to recognize the consumers who order the same item in multiple sizes, and coach the consumer to order the right size the first time.
  • View a return as a single event in an ongoing customer relationship, and optimize the relationship, not the event.

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