MEGA Supply Chain Societies of Delaware Valley

“Supply Chain Management:

Houston, We Have Liftoff”

October 7, 2020

C . JOHN LANGLEY JR. , PH.D.

Cl in ica l Pro fe s sor o f Supp ly Cha in Management

Penn S t a te Un i ver s i t y

2

Department of

Supply Chain

and

Information

Systems

Penn State

Executive

Programs

Center for

Supply Chain

Research®

Gartner Supply Chain

University Rankings

(2020)

#1 Graduate

#3 Undergraduate

3

PSU Center for Supply Chain Research®

RESEARCHEXECUTIVE

EDUCATION

• Corporate Sponsor Meetings

• SC Leaders Forums

• SC Talent Symposium

TALENT OUTREACH

4

Yes – We Have Gone Virtual As Well

5

Presentation

Objectives

Supply Chain “Buzz”

Core Competencies

Tomorrow’s Supply Chain Leaders

“Game-Changing” Technologies

Effects of COVID-19

6

What’s For Dinner?

Who Knew That the Hardest Part Of Being an Adult is Figuring Out What to Cook for Dinner Every Single Night for the Rest of Your Life Until You Die?

7

Seven Ways the Pandemic Has Changed How We Shop for Food

1. Trips are Fewer, Lists are Better

2. Online Aisles are Bustling

3. Orange is the New Snack

4. Redrawing the Store

5. Choices are Shrinking

6. The Freezer is Hot

7. “Local” is a Bigger Lure

Source: September 8, 2020

8

What in the

world is

going on

in our supply

chains ???

9

Learning How to Create Successful Supply Chains

Demand-driven focus

Adaptable and resilient

Use of data and analytics

to simplify complex

supply chains

Balance operational and

innovation excellence

Supply chain talent

Recognize no single

organization can make a

supply chain successful

9

10

Supply Chains Moving into the C-Suite

Supply Chain StrategyAnd Operations

Corporate Boardroom

11

Supply Chains are Moving Up the “Food Chain”

Functional Excellence

Customer Service

Integrated Logistics

Supply Chain Management

Integrated Business

Management

Extended Enterprise

Supply Chains as

Ecosystems

12

“Supply Chains” Becoming Conventional Wisdom

13

Game-

Changing

Capabilities

What can we do to drive

supply chain success?

14

End-to-End (E2E) Supply Chain Focus

Supplier’s Supplier

Your Suppliers

Your Customers

Customer Customers

Your Organization

Plan > Buy > Make > Flow

Penn State CSCR®Supply Chain Model®

< < < < < < < < Return < < < < < < < <

15

Multi-Channel

Consumer buying patterns dramatically changing

3PLRetail storeRetail DC

Retailer

Food

manufacturer Last-mile

logisticsLast-yard

logistics

“Last Mile”

• Final leg of supply chain

• Does NOT always

include delivery to

ultimate user or

consumer

Consumer

“Last Yard”

• Capability needed when

“Last Mile” does not

extend to ultimate user

or consumer

16

Technology

Modeling /

OptimizationRobotics and

Automation

Mobile

TechnologiesInternet-Of-

Things (IOT)

Additive

Manufacturing

Augmented

Reality (AR)

Cloud

Computing

17

Analytics

Descriptive

Predictive

Prescriptive

AI / Machine Learning

The Path to Meaningful Use of OTIF

Lack of standard definition for OTIF

How does flexibility factor in?

What about early deliveries?

What incentives are OTIF aligned with?

How focus on OTIF can improve SC relationships?

The Rise of “OTIF”

18

Sustainability

More than just being green . . . Sustainability must incorporate

a triple bottom line into supply chain strategies

Environmental Social Governance

19

Risk Management

Need formal plans and processes for

risk management

Supply chain risks a refinement of

overall organizational risks

Shippers and supply chain partners

need to address issues relating to

risks

Risk management is a “rising star” among

strategic areas of business

and supply chains.

20

Talent

Attract, develop, and maintain the appropriate pool of talent

from entry level to executive level

Unprecedented

shortage of labor

53% of shippers rely

on 3PLs for help

79% unprepared for

labor shortage

Supply chain jobs to grow by

25% over next 10 years; 25% of

current workforce expected to

retire shortly

Results will include

significant outsourcing

of labor resources

Millennials in

the workforce

(at least

temporarily)

21

Focus on Core

Competencies

www.3PLStudy.com

22

Customer/3PL Study Special Topics Workshops/Roundtables

www.3PLstudy.com

2021 25th Annual 3PL Study

23

2021 25th Annual 3PL Study – Key Findings

24

“IT Gap” 2002 2020

89%85%

91% 90% 92% 92% 92%88%

94% 93% 94%98% 96%

93% 91% 91% 93% 94% 93%

27%33%

42% 40%35%

42%37%

42%

54% 54% 53% 55%60% 59%

65%

56% 55% 56% 54%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20

IT

“Gap”

Top IT Capabilities

TMS

EDI

WMS

Supply chain

visibility

Order

management

Web

portals

IT Capabilities Necessary Element of 3PL ExpertiseShippers Satisfied with 3PL IT Capabilities

25

42%

28% 31% 33%27%

45%

19%

51%

Transactional Strategic Partner Transactional Strategic Partner

Current Future (5 Years)

Shippers 3PL Providers

Shipper-3PL Relationships Shifting

26

3PL-Shipper Data Sharing

1. Request

for

proposal

2. Response

3.

Evaluation

4. Contract

5.

Implementation

6. Continuous

improvement

27

Supply Chain

Effects of

COVID-19

28

93% Supply chains impacted

32% Exceeded 50% of operations

Degree of Impact on Supply Chains

46% Back to normal in 3 months or less

16% 12 months or more to recover

Time to Recover

1. International Transportation & Logistics

2. Manufacturing

3. Supplier Networks

Top 3

Areas of Impact COVID-19 revealed weaknesses in current supply chains, with wild swings in demand and supply, throwing global networks into

chaos.

Few Shippers Escaped the Impact of COVID-19

29

Shippers Reported Feeling the Impacts Slightly More than 3PLs Particularly in Both Warehouse and Driver Labor

Warehouse or other Operational Labor Shortage

Personal Protection Equipment Shortage

Cleaning & Sanitization Supplies Shortage

Driver Shortages

Operational Equipment Shortage (trailers, containers)

56%

46%

42%

30%

29%

35%

32%

40%

23%

17%

3PLsShippers Areas Impacted

30

Shippers and 3PLs – Areas Needing Improvement

Shippers

Rank

1 Readiness & Continuity Planning

2 Data Analysis & Visibility

3 Risk Management

4 Demand Forecasting

5 Scenario Management

6 International Transportation

7 Inventory Management

8 Labor Management & Scheduling

9 Capacity Forecasting & Planning

3PLs

Rank

1 Readiness & Continuity Planning

2 Data Analysis & Visibility

3 Risk Management

4 Scenario Management

5 Labor Management & Scheduling

6 Capacity Forecasting & Planning

7 Demand Forecasting

8 Domestic Transportation

9 International Transportation

31

COVID-19 Revealed Supply Chains Have Become Too “Brittle”

42%

49%

0%

10%

20%

30%

40%

50%

60%

Agree (YES) Disagree (NO)

Supply Chains Have Become Too LEAN

56%

41%

0%

10%

20%

30%

40%

50%

60%

Agree (YES) Disagree (NO)

Supply Chains Must Rebalance to More Local/Domestic Ecosystems

32

Emerge and RecoverDeveloping Capabilities to Facilitate Recovery

Example shipper and provider

capabilities to facilitate supply chain

recovery and resilience

Accommodating COVID-19 precautions

Improvements in advance shipment planning

Use of digital technologies

Use of automation

Ability to innovate and transform supply

chains

33

Future

Supply

Chain

LeadersHow are today’s students being

developed to become tomorrow’s

supply chain leaders?

34

Penn State Supply Chain Students

Undergrad MBA

Full-time students 970 63

Internships and Co-ops 87% 100%

Project-based for external organizations 22% 100%

Technology training (supply chain

applications)

100% 100%

Full-time jobs

Prior to graduation

0-3 months post-grad

Longer

Capable – Energized – Excited

77%

18%

5%

100%

97%

2%

1%

100%

35

Undergraduate Supply Chain Courses

SCM 406 – Strategic

Procurement

SCM 405 – Manufacturing

and Service Strategies

SCM 404 – Demand Fulfillment

BA 342 – Social Responsibility

and Sustainability

MIS 441 – Business Intelligence

for Decision-Making

MIS 431 – Business Data

Management

SCM 301 – Supply Chain

Management

SCM 450 – Design and

Management of Supply Chains

MIS 446 – Information

Technology and Business

Strategy

BA 411 – Analyzing Business

and Industry

SCM 421 – Supply Chain

Modeling and Analysis

36

Talent Strategy Recommendations for Organizations Recruiting University Students

Prepare a company and supply chain profile for recruits

Supply chain needs and maturity

Geographic focus

Diversity and inclusion profile

Career value proposition

Build recruiting presence by segmenting recruiting focus

Different schools, size, specific strengths

Geographic priorities

Help students to understand your company experience

Appealing place to work

Example job profiles and development opportunities

Arrange meetings with younger members of your team

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Summary and Key Takeaways

Supply chains are E2E and by

definition include multiple

organizations

Supply chains are living, breathing

ecosystems

Supply chains not only need to

“outrun the bear,” but need to

know “what bear to chase”

The keys to supply chain success include

efficiency and effectiveness, and also the

ability to innovate and transform

Supply chain success also requires a

continuing supply of fresh, capable talent

We are all fortunate to be in the supply

chain business, as this is finally taking its

deserved place as a core competency for

success in most types of business

38

“ I skate to where the puck is going to be, not to

where it has been. ” ~ Wayne Gretzky

Image courtesy of Carmen's Group

Closing Thought

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MEGA Supply Chain Societies of Delaware Valley

Thank You !!!

Questions?