Like almost all conferences scheduled after February of this year, Transplace’s Shipper Symposium (originally scheduled for May) was held last week as a virtual conference. It was a half-day event with six sessions, four of them just 30 minutes long. To paraphrase Goldilocks, it wasn’t too long, it wasn’t too short, it was just right — with half the sessions focused on the state of the transportation market and an excellent customer panel discussion with executives from Walmart, Campbell Soup Company, Emerald Kalama Chemical, and The Clorox Company.
“Today we look forward to discussing key pain points that we’re all seeing in the market, like price inflation, demand volatility, and capacity and have created an agenda that informs in these areas,” said Transplace CEO Frank McGuigan in his opening comments. The agenda certainly delivered, with very informative presentations by Matt Harding (SVP, Data Insights & Engineering) and Ben Cubitt (SVP, Network Services & Consulting) from Transplace, Bob Costello (Chief Economist at American Trucking Association), and Alan Beaulieu (President, ITR Economics).
I don’t have the time or space to review all of the conference sessions (I’ll share some additional highlights in future posts), but here are some takeaways from the opening session and the customer panel.
Transplace’s State of the Business
“If Transplace were a public company, we would be #699 on the Fortune 1,000 list,” said McGuigan as he discussed the company’s financial strength and growth. Here are some other stats that he shared:
13%: 5-year Compound Annual Growth Rate (CAGR) of Net Revenue 11%: 5-year CAGR of Adjusted EBITDA 38%: 5-year CAGR of Freight Under Management (expected to reach $11 billion in 2020) 17%: 5-year CAGR in technology investments, with continued focus on expansion into new geographies, supply chain visibility, centralized integration across modes, improved usability and design, and advanced network collaboration Transplace Network: $11 billion FUM, 350 million transactions annually, 30K carriers under contract, $23 billion planned continuous moves, $2 billion parcel freight under management Over $500 million in year-to-date savings identified for clients via continuous improvement projects Three strategic acquisitions in 2020: Lanehub, ScanData, and LeanCor Global expansion, with new offices in Europe and Mexico Underscoring the growing role of technology in the logistics service provider industry, McGuigan stated, “Bigger is not better; bigger and smarter is better, which is why we invest so heavily in the engineering and IT side of our business.”
Leigh Robinson, Transplace’s CHRO, wrapped up the session talking about the company’s employees and its partnership with Feeding America. For more details on this partnership, I encourage you to watch the Talking Logistics episode we aired earlier this year, which featured Robinson and Blake Thompson, Chief Supply Chain Officer at Feeding America: Making A Difference: Feeding America & Transplace.
Achieving a High Level of Supply Chain Performance in a COVID-19 Environment
The best part of the conference was the customer panel discussion, which featured the following executives:
Greg Smith, EVP, Supply Chain, Walmart Kelly Porter, VP, Logistics, Campbell Soup Company Dana Lukens, Director of Global Order Fulfillment, Emerald Kalama Chemical Matt Connolly, VP of Global Logistics, The Clorox Company The session was moderated by Tracy Rosser (EVP, Operations) and Mollie Bailey (VP, International) from Transplace.
“The biggest change we’ve seen this year is a major shift to e-commerce,” said Greg Smith from Walmart. “In the first half of this year, our e-commerce business has almost doubled; last quarter we were up 97%. The growth of e-commerce in the last six months is what we had expected for the next 3-5 years.”
This explosive growth has led Walmart to accelerate its omni-channel initiatives, including fulfilling orders from stores. “There’s more need for agility and speed,” Smith added. “And accuracy has to be so much greater. If you don’t have the right product in a store or fulfillment center, you are obviously going to disappoint the customer. Precision and perfection are two things we’re really focusing on. The supply chain is playing a significantly greater role on the front side of the transaction…100% available-to-promise is what we have to do to make sure we satisfy our customers.”
Referencing Smith’s comment about precision and perfection, Matt Connolly from Clorox said, “It’s really become clear over the past six months that the supply chain is all about product flow, but the flow of data is becoming almost as important. It’s this need for precision that has focused the supply chain profession on having greater visibility to [eliminate] data latency.”
Kelly Porter from Campbell Soup Company shared that they have seen “significant demand volatility during the pandemic that we’ve had to react to, so the ability to identify areas of opportunity early through demand sensing or data sharing has become even more critical.”
With regards to e-commerce, Porter added, “We’ve also seen a shift from brick-and-mortar to e-commerce, which has challenged our internal networks in terms of building out more multi-pack capabilities, as well as investing in external co-packing capabilities to build out the different SKU assortments that are needed in the e-commerce space.”
Similar to what retail and CPG companies have been experiencing, “we have also seen big fluctuations in demand, especially earlier in the year,” said Dana Lukens from Emerald Kalama Chemical. “There continues to be uncertainty about what to expect moving forward. Forecasting basically goes out the window…The need for flexing quickly in response to customer behaviour is [what’s important now].”
The ongoing volatility in demand is having an impact across the entire end-to-end supply chain, including with upstream suppliers, as Porter from Campbell Soup explains:
“Typically, forecast changes would impact manufacturing and production schedules only, but now the forecast volatility that we’re seeing also have near- and long-term implications to the upstream supply chain as well. So, we’ve had to take a step back and reeducate our commercial teams around the need to forecast early and long because it affects the end-to-end supply chain and not just manufacturing.”
“In the past, you could leverage inventory and safety stock to manage volatility either from the demand side or supply side,” added Connolly from Clorox, “but we don’t have that luxury now…Going forward, as we navigate out of this, demand sensing is going to play a much bigger role than it has in the past.”
The panelists also talked about how collaboration, both internally across all stakeholders and externally with suppliers and customers, is becoming more important.
“Collaboration with our suppliers and external manufacturers is unlike anything I’ve seen in my nearly 30-year career,” said Connolly. “At the end of the day, we’re trying to make a commitment to our customers and consumers, so we have to walk all the way back to our suppliers’ suppliers to understand the constraints.”
Internally, there is greater focus and collaboration around integrated business planning and S&OP. “We’ve taken our integrated business planning process from a monthly cadence to a weekly cadence with participation from all stakeholders because supply chain is so critical and product availability is the priority,” said Porter.
“There’s been such a rally around our overall S&OP process, the robustness of the discussions we’re having and the frequency has increased dramatically,” said Lukens. “Collaboration with our 3PLs has also become vitally important as we try to get information quicker and try to understand what is happening across the supply chain down to the consumer as quickly as we can so that we can respond as quickly as we can.”
There were many more great insights from the conversation, too many to cover here. But the key takeaway is that “the way we’ve always done things” in supply chain and logistics won’t work any more moving forward. Speed, flexibility, agility, precision: enabling these attributes will be critical for success, and it involves breaking down the silos that still exist between functional groups and business partners (and the IT systems they use ), as well as “walking the talk” on collaboration.