This year’s crop of supply-chain innovators ran the gamut from planning to supplier relations to order fulfillment and delivery. They encompassed human capital as well as the latest in technological advances. They involved a wide range of industries, including healthcare, high-tech, consumer goods and logistics. What they shared was a determination not to settle for the status quo — to be constantly in search of ways to cut costs, streamline operations and, most importantly, enhance the customer experience.
To back up for a moment: each year, SupplyChainBrain joins with the Council of Supply Chain Management Professionals to bestow the Supply Chain Innovation Award. Following written submissions, the top innovators participate in a live competition at CSCMP’s annual EDGE conference, during which a panel of judges from SupplyChainBrain and CSCMP joins with conference attendees to hear the presentations. The winner and runner-up are announced on the conference’s final day. The most recent EDGE, held in Anaheim, California, marked the award’s 14th year.
INNOVATION OF THE YEAR: Snap-on Tools and FastFetch Corporation The toolmaker saves big on shipping costs with the help of AI and new logistical processes.
Finalists: AGCO and 4flow Erie St. Clair LHIN and TransForm SSO F|Staff and States Logistics Lodge Manufacturing, EVS and Supply Chain Coach
This year’s winner was Snap-on Tools and FastFetch Corp. Snap-on is a leading supplier of hand and power tools. Together with FastFetch, a provider of order-fulfillment systems, the two partners employed artificial intelligence and innovative logistics processes to slash shipping costs by 5%, amounting to nearly $1 million a year, at a Snap-on distribution center in Crystal Lake, Illinois.
AI allowed Snap-on to determine ideal carton dimensions for its wide range of products, leading to a sharp drop in wasted space, dunnage materials, and the shipping of “air.” By analyzing historical records, the new system can identify the right size of box for every shipment. Moreover, the system ensures that the correct carton is available to the packer as soon as it’s needed on the line.
Runner-up Intel is on a mission to diversify its product offering beyond traditional PC and server markets. Eyeing data-centric opportunities, the company set out to build a partnership between supply chain, its business units, and sales and marketing teams. The idea was to enable the design of new products expressly for supply-chain markets. The solution lay in development of the SupplyChain@Intel (SC@Intel) program. Over a period of four years, it has delivered more than 70 “deal wins” — agreements with customers that forecast future buys — and generated millions of dollars of new revenue.
SC@Intel built out a website to orchestrate a worldwide network of supply-chain subject-matter experts. Included in the site is a series of best practices on topics such as big data, analytics, the Internet of Things, cloud and artificial intelligence. The whole effort puts supply chain firmly at the center of Intel’s business-unit strategy.
Lodge Manufacturing, a maker of cast-iron skillets, found its venerable product to be newly trendy. As a result, it lacked the production capacity to meet surging demand. Along with construction of an additional foundry and new distribution center, it needed a modern-day warehouse management system (WMS). The old system was paper-based and inefficient, requiring too much manual effort and needless management of exceptions.
Lodge turned to Supply Chain Coach, a Rockfarm family company, for a ground-up approach to order handling. It devised a series of innovative techniques for prioritizing, assembling and picking orders. By building optimized pallets guided by new WMS software, Lodge saw a 25% drop in cost per pound. At the same time, picking accelerated by 350%.
AGCO, a leading designer, manufacturer and distributor of agricultural equipment, has embarked on a journey toward supply-chain digitization and strategic network planning. Teaming up with 4flow, a neutral partner offering logistics software, optimization and supply-chain management, the company implemented the AGCO Smart Logistics initiative. In just five years, AGCO and 4flow created a fully integrated supply chain with marked improvement in network transparency and performance, not to mention significant cost savings. In the process, they successfully integrated more than 3,000 suppliers across AGCO’s international inbound supply chain.
F|Staff, a provider of commercial truck drivers on demand, found a creative way to link carriers with the pool of available drivers. It devised an app that directly connects the two parties — carriers with seats to fill, and drivers looking for loads. Similar in nature to the platform created by rideshare pioneers Uber and Lyft, the app sends out a call for drivers, detailing the route and freight to be hauled. The first qualified driver to respond gets the job. The technology was designed to address the nation’s severe driver shortage, which is estimated to exceed 174,000 by 2026. In addition, the F|Staff app provides driver profiles, real-time tracking, and the ability of carriers and drivers to rate one another’s performance. Among the app’s early adopters is third-party logistics and warehousing provider States Logistics Services.
Erie St. Clair Local Health Integration Network (LHIN) called on Canada’s TransForm Shared Services Organization (SSO) to streamline, automate and optimize the process by which it supplies patients within the community as well as in their homes. In addition to an enterprise resource planning (ERP) system, TransForm provided Erie St. Clair with modern-day inventory controls, end-to-end automation of its supply pipeline, and a coherent strategy for managing supplier contracts. The transformation resulted in first-year cost savings of US$680,000, on approximately US$2.2 million in spend. The principals view the initiative as essential to keeping pace with new quality and safety requirements, as well as broader trends in patient care and Canada’s health system.
SupplyChainBrain congratulates all of the finalists in this year’s SCIA competition. And we look forward with keen interest to next year’s crop of innovators. Check back this week to read the six case studies.
Tomorrow:Tools Distributor Uses AI to Perfect Packaging (Snap-on Tools and FastFetch Corporation)