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L ast week, SCDigest Editor Dan

  1. 1. SUPPLY CHAIN TRENDS AND ISSUES L ast week, SCDigest Editor Dan Gilmore gave his review of the A Decade of Supply decade in supply chain, focusing Chain Chronology on key trends and changes through- out the 3000-2009 period. As promised, below you will find a year-by-year chronology of the most important news and events of the decade – and quite a decade it was. A Year by Year Recap of 2000 the Decade’s Biggest Stories in Supply Chain Oil prices are in the $18-20 per bar- rel range for the year. Feared technology disasters associ- ated with year change to 2000 is and Logistics avoided, as Jan. 1 comes mostly without any blips, in part resulting from massive IT spending in the prior few years to avoid the problem. How- SCDigest Editorial Staff ever, “Y2K” related spending plus e- commerce mania set stage for tech bubble collapse the following year. panies and their suppliers to re- years. port carbon emissions in a public Imports from China into the US and standard way. Group rises in China is admitted into the are $100 billion; by 2008, they are prominence, especially in second World Trade Organization, $338 billion. half of the decade. providing another catalyst for its export strategy and rapid rise in In a huge company push, supply export levels. chain software provider i2 Tech- nologies says it reaches $1 billion 2001 Cisco writes off an astound- in sales for the year, in part from a ing $2.1 billion in inventory series of frenzied deals near year end Price of oil bottoms at just over $15.00 per barrel; from as it fails to anticipate tech to reach that target. A subsequent spending slow down. The debacle accounting scandal and several re- there, it begins a multi-year climb that dramatically impacts leads to important change in statements over the next few years supply chain practice, as Wall later show actual sales in 2000 were supply chain costs. Street analysts start paying a much, much less. lot more attention to com- Internet bubble bursts, pounding technology stocks and pany inventory levels to find Before anyone much cared, the Car- the next Cisco-like risk, and bon Disclosure Project is launched in dramatically reducing supply CEOs, CFOs and supply chain ex- London, with a goal of pushing com- chain software adoption for two Supply Chain Digest Jan. 19, 2010 1 www.scdigest.com Copyright 2010
  2. 2. SUPPLY CHAIN TRENDS AND ISSUES ecs find the need to get inventory re- September as an arm of GS1, ligion in response. taking over from the work 2002 Yellow Freight announces plans to buy Roadway Ex- press, its larger rival in the LTL West coast terminal operators engage in a lockout of the Longshore- shipping market. Additional ac- men’s union in an on-going labor quisitions and down freight mar- dispute, paralyzing imports and ex- ket lead to big financial troubles for the new YRC Worldwide later ports for 10 days, causing some com- panies to increase use of non-West in decade. coast ports to reduce risk. In a bid to grab a big share of the US market, DHL announces Blue jeans icon Levi’s announces it is shuttering all its US production it is buying Seattle-based Air- plants and moving production to Asia borne Express for just over $1 are lifted, leading to a surge in – a move many other manufacturers billion, but planned synergies sourcing from China in those and market share growth never will emulate throughout the rest of categories over the next few really materialize, while losses the decade, deciding to become years. “brand, design, and distribution com- mount over rest of decade. panies” – not producers. In December. Oracle an- After a 15 year career in supply nounces it is buying People- chain, Editor Dan Gilmore Almost a decade in the making, the Soft, which itself had acquired Alameda Corridor opens, providing launches Supply Chain Digest JDEdwards, as the ERP market a 10-mile long, underground rail sys- in late 2003. His first column: consolidation continues and Ora- tem to move containers away from “The sorry state of ASNs.” cle starts its multi-year buying the ports of Los Angeles and Long spree. Earlier, PeopleSoft and the Beach without needing over the road ERP provider PeopleSoft an- US Trade Commission had trucks. nounces it is buying rival sought to block the deal, leading JDEdwards. to documents showing there had Leading supply chain software pro- been some light discussions be- vider McHugh Software changes its The Federal Motor Carrier Safety tween Microsoft and SAP about a name to become RedPrairie. Administration (FMCSA) merger. changes regulations for com- mercial truck drivers related Vinod Singhal of Georgia Tech Ports generally and LA/Long to hours of service (HOS), and .Kevin Hendricks of The Uni- Beach specifically become versity of Western Ontario publish the which modestly limits a driver’s overwhelmed with import vol- first in a series of articles on how availability to work in some areas umes, leading to large delays in supply chain disruptions impact (while actually increasing the getting cargo ships into port and number of hours they can drive shareholder value. The research be- containers out of the terminals. comes a key driver of the growing in a day from 10 to 11). HOS “Santa’s not stuck in the chimney focus on supply chain risk manage- rule change seems to dominate – he’s stuck in Long Beach” ment in the rest of the decade. the transportation news and was writes AMR analyst Greg Aimi generally opposed by carriers, over huge delays getting contain- but in retrospect the impact of ers of goods for Christmas sea- the changes seems to have been 2003 almost unnoticeable. son in. In subsequent years, re- tailers and manufacturers start In June, Walmart announces plans bringing in containers earlier, use for RFID tag mandate, later says it 2004 additional ports, to mitigate the expects all vendor pallets and cases congestion. Problem largely gone will be tagged within a few years. by 2006. Quotas restricting textile and EPCglobal organization formed in apparel imports from China Council of Logistics Management Supply Chain Digest Jan. 19, 2010 2 www.scdigest.com Copyright 2010
  3. 3. SUPPLY CHAIN TRENDS AND ISSUES (CLM) announces in July that it is torical averages. Leads to In- changing its name to Council of ventoryDeLoad, ReMix and Supply Chain Management Pro- other programs that largely fix fessionals (CSCMP) effective Jan. the problem within a couple of 1, 2005. It’s a lot harder to say, for years. sure, but a sign of the mainstreaming of supply chain in business and Ocean shipping rates con- probably an overdue move. tinue to climb, up 5-7% for the third straight year. The Supply Chain Operations Refer- ence Model (SCOR) is expanded to Trucking capacity is ex- add a new process: Return. tremely tight; shippers pay bounties to get truckload carriers The ocean shipping world starts to during peak fall shipping season. see the delivery and commissioning of a new generation of “mega- New York Times columnist Tho- ships,” capable of holding 10,000 or mas Friedman releases “The more TEUs/containers. Some ports World is Flat,” both capturing unable to handle these behemoths. and catalyzing globalization. load. Surprisingly, as these Cites “Supply Chaining” as key things go, JDA largely retains the enabler. Book is highly influen- Manugistics brand. 2005 tial. Motorola acquires wireless and Oil prices end the year in the $70 EPCglobal adopts so-call “Gen auto ID hardware provider Sym- range, with predictions for “$100 per 2” EPC/RFID standard, which bol Technologies. barrel” prices, as concerns about the promises substantial improve- ments in EPC read performance. In a widely reported study, the cost of fuel rise to top of supply chain and even corporate radars. Fuel sur- American Trucking Associations charges start to become big issue for says that there will be a driver shippers, with some claiming carriers 2006 shortage of some 100,000 in making profit from the surcharges. five years if current trends con- tinue. Rick Blasgen, former supply chain Panama officially approves and logistics executive at Kraft and project to expand and deepen Major controversy arises when ConAgra, is named president and the Panama Canal, in a mas- Dubai World Ports announces CEO of the Council of Supply sive project expected to be com- plans to make acquisition that Chain Management Professionals pleted in 2014. The move will would give it ownership of six in Chicago. enable larger ships to get US ports. Political fallout results through the canal and reach the in deal falling apart. Germany’s Deutsche Post, after eastern areas of the US from having acquired DHL earlier in the Asia and also expand overall ca- decade, now acquires British- pacity. based Exel Logistics, which also 2007 has a major US presence. JDA Software announces it Wall Street Journal publishes will acquire Manugistics, a negative article on Walmart’s Walmart lets inventories get out supply chain software and opti- RFID program efforts, leading to of control, with inventory levels mization technology pioneer that strong rebuttal by Walmart and a growing in 2005 at almost 90% of like competitor i2 ran into finan- few of its suppliers, but as sales growth, after being over 90% in cial troubles in the decade, espe- events unfold article appears to 2004, both far above company’s his- cially in the form of a big debt Supply Chain Digest Jan. 19, 2010 3 www.scdigest.com Copyright 2010
  4. 4. SUPPLY CHAIN TRENDS AND ISSUES have hit the nail on the head. Independent truckers going Mattel becomes poster child for con- out of businesses by the thou- cerns about offshoring generally and sands, as slowing freight vol- product safety for goods made in umes and soaring fuel prices China specifically as it has to recall take their toll. Rumors of inde- millions of toys due to lead in paint pendent trucker “strike” never and other issues. Some politicians really materialize, however. call for new “import czar,” but this never happens. CSCMP conference is Denver held the same week as col- Boeing announces the first of what lapse of Lehman Brothers, will be many delays to the launch start of financial crisis, and stock of its new Dreamliner 787 air- market collapse, making it hard craft, as a supply chain strategy of to really focus on conference as Factory utilization reaches post outsourcing for the first time produc- world seems to be falling apart -Depression low of 65% in US. tion of a huge percent of the new outside the convention center. plane’s components backfires; plane Ocean shipping and trucking is more eventually more than two After mostly unending problems rates plummet, often said to be years late, and Boeing says costs for since its acquisition of Airborne at or even below variable costs snafu will exceed $2 billion. Express, parent Deutsche Post to operate. announces DHL is pulling out Prices of virtually all commodities of the US express market, as Walmart’s RFID program soar through mid-year, leading to many anticipated. seems to go into total limbo; the term “agflation” to describe rising Procter & Gamble ending what it prices for corn, wheat and everything Food safety and supply chain calls a “successful” test of tag- else agricultural. Metals prices also concerns are big news item all ging promotional displays sends spike. Many companies cite rising year, as there is confusion over major signal. inputs costs when missing earnings source of salmonella contamina- targets. “Rice riots” occur in parts of tion in fresh salsa ($100 million A “cap and trade” bill passes the world protesting soaring cost of in tomatoes recalled, only later the US House, but sees no ac- food. Some companies move to verti- to have tomatoes cleared as tion in the Senate. cal integration or sign unusually long- source of bacteria). Tainted Chi- term contracts with suppliers to lock nese milk proves deadly later in Everyone looks forward to in access to commodities. the year to some. 2010 – perhaps most difficult year to forecast in decades. 2008 Wall Street collapse has some wondering in the US and Europe What are your thoughts and Dell pulls big surprise by announcing if there should be a return to reaction to this chronology of more of a “product economy” Supply Chain events in the in April quarterly earnings call pres- entation that it is entering the retail and less emphasis on services. 2000s? Anything especially market and largely abandoning its hit you in retrospect? Any- legendary build-to-order supply 2009 thing we missed? Let us know chain model, saying it is too costly. your thoughts at the Feed- It’s mostly survival mode for back button below. Price per barrel of oil soars, reaching businesses, as companies mas- peak over about $147.00 in July. sively cut supply chain staff and By end of year, it is down to the high inventories. $30s following the financial crisis. Supply Chain Digest Jan. 19, 2010 4 www.scdigest.com Copyright 2010