Today’s Top Supply Chain and Logistics News From WSJ


Story image for todays news on industry from Wall Street Journal


Hiring supply-chain managers is growing more complicated than ever, and it’s no wonder. WSJ Logistics Reports’ Loretta Chao writes that companies from technology giant Cisco Systems Inc. to consumer goods specialist Kimberly-Clark Inc. see a changing distribution and marketing landscape demanding a wider array of skills—and combinations of skills—than companies have traditionally sought in supply chains. Companies say there is a growing premium in two critical areas: comfort with technology, and the use of fast-moving data-driven analytics; and the need to work seamlessly across borders and cultures. It’s part of what Cisco Systems Inc. Senior Vice President of Supply Chain Operations John Kerns says is a “massive talent shift” in supply-chain hiring. The change here is that corporate leaders are consolidating logistics and procurement decision-making under the supply-chain umbrella, and having those managers work more closely than ever with leadership teams on executive decisions. Peter L. O’Brien of executive search firm Russell Reynolds Associates says companies are trying to have departments that once worked independently from each other work as one, an approach far more complicated that simply developing a sales strategy and asking the logistics department to push out the products while keeping inventories lean. Kimberly-Clark Chairman and Chief Executive Thomas Falk says his company for the first time is looking at how to bring together strategies from the sourcing of raw materials to later purchasing of transportation and distribution services “to get the more value out of that combined cost structure.”

Big changes in supply-chain hiring used to come about because of changes in logistics-related innovations and technology, but the drivers that companies now are seeing are coming from a different direction. According to WSJ Logistics Report’s Erica E. Phillips, Office Depot’s distribution chief Rick DiMaio says supply chains are being restructured because of the demands of “far more educated” consumers, who are putting a premium on rapid delivery, transparency and customization in distribution. Those particular demands aren’t new to supply chains, but what’s new is that the information available to consumers and to sales managers is more detailed and available more quickly than ever, and the steady shift of buying from physical stores to online sales is turning basic logistics decisions upside down. What had been accepted and unassailable wisdom—keep distribution steady and predictable, use economies of scale and keep inventories low—doesn’t fit so easily in the e-commerce box. Mr. DiMaio says the long-established view “is in direct conflict with what customers are driving us toward.”

U.S. importers gained some measure of stability with the ratification of a five-year contract by dockworkers at West Coast ports, but stability was probably the least they could hope for. WSJ Logistics Report’s Erica E. Phillips reports the pact that members of the International Longshore & Warehouse Union approved clarifies arbitration procedures and leaves terminal managers and shipping lines to fully cover new health benefits costs. But it’s otherwise little more than a holding pattern until the pact expires in 2019. That’s only a four-year wait, since the contract is retroactive to last year, and that may seem very soon to retailers such as John Deere Inc., which cited the negative impact of delays in West Coast ports cargo handling in its first-quarter earnings report. The contract does not address controversial issues such as the maintenance of chassis—the truck equipment needed to move goods off the port—nor ways to improve the reputation West Coast ports have for poor productivity compared with East Coast facilities. That’s why the ratification received decidedly measured applause. Gene Seroka, executive director of the Port of Los Angeles, said in a statement that port officials now are working on “a series of initiatives that will take cargo efficiency and velocity to the next level here in San Pedro Bay.”




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