Autonomous Vehicles (Robot Trucks) Will Redesign the Entire Supply Chain

By Tom DePaoli

Many supply chain professionals do not completely understand the disruption and improvements that autonomous vehicles, specifically what I call robot trucks, will create. Most cannot get past the pitfalls and possible barriers to robot trucks and push back any pre-thinking about the impacts. I define robot trucks with a broader perspective. I include trucks of all sizes and even internal plant material handling equipment like fork-lifts and automatic guided vehicles (AVGs).

The biggest leap that will happen is that robot trucks will learn! Many doubters cannot get past this. Although not complete artificial intelligence (AI), robot trucks will adapt on their own, to conditions and circumstances, and build a memory of what to do. Major advances in Simultaneous Localization and Mapping (SLAM) are accelerating.  Here are some aspects to think about.

Warehouse placement and location will be completely challenged. Many logistics people spot warehouses placement based on a 500-mile deliver radius or circle. Robot trucks will at least double this radius to 1,000 miles. Some warehouse placement is to enable the semi-truck drivers to return home for the night.  Obviously robot trucks do not need this.

Robot trucks will directly compete with domestic air freight and rail. Next-day delivery of 1,000 miles or more is feasible with robot trucks. In fact, rates may be based on how fast a material is delivered down to the minute. Some trucking companies may even adapt a spoke-hub concept or meld with an air freight company. 

Labor shortages of truck drivers will become less of an issue. The design of a robot truck will not have to accommodate for creature comforts (driver) which can be as much as one-third of the total cost of a manned truck. Driver limitations of 10-11 hours driving will not be a factor.

Smaller local delivery robot trucks will compete with more exotic delivery methods such as drones.

Truck delivery dock design and layout may have to be modified or adjusted to meet robot truck capabilities. 

SLAM will be enhanced for internal plant vehicles, like fork-lifts, and automated guided vehicles. (AVGs). Material handling costs can be as high as 30-40% of a product’s cost and is pure waste. The greatest leap will be the interconnect-ability of the equipment and communication with inbound and outbound freight delivery vehicles.  

I believe one of the biggest barriers to robot trucks will be that fact that we are a litigious society and accidents will be aggressively litigated. However all the data point to fewer accidents with robot trucks not more. Legislation will be needed to deal with this issue. Unfortunately, legislative bodies are rarely proactive in creating laws for emerging technologies. 

I offer as evidence of this failure to act legislatively with this statement, “Heavy-duty rigs make up between 7% and 10% of vehicles on the road but consume more than 25% of the fuel”, according to Dave Cooke, Senior Vehicles Analyst at the Union of Concerned Scientists. Yet there is still no coherent national energy policy to consider alternate fuels for these rigs.

Fuel choices include hydrogen, natural gas, electricity and methane. They all have distribution and environment footprint issues that need to be addressed.

In summary, supply chain professionals must rethink their entire logistics strategies both eternally and internally with the emergence of robot trucks.

.Measuring Up Your Suppliers

Measuring Up Your Suppliers

            Suppliers that have had experience with non-traditional purchasing concepts, alliances and partnerships definitely have an advantage when it comes to developing a deep relationship with them. Make sure you take the time to explain your procurement or supply chain strategy to them and to take the time to understand their strategy. They need to know what’s in it for them. Make it clear and measurable. Feeling good about each other will not get to the bottom line. Appearances do count.  You can size up a supplier’s partner quotient a lot by actual site visits and talking to their employees at all levels. Smiling faces are better than growls and disgruntled remarks. This new frontier with suppliers has some particular characteristics.  These characteristics include most favored customer contracts, elimination of incoming inspection, reduction of supplier base, early supplier involvement in design, value engineering, mutual cost reductions, targeting of non-production company costs, the complete integration of key suppliers into the business, and extensive use of cross-functional teams.   This quantum leap philosophy with suppliers requires the education of purchasing personnel, rapid access to information and supplier empowerment. Cross-functional business teams and a constant dedication to improve and to reduce time to market are key elements.

            Quantum leaps are usually made by actually listening to the supplier and implementing their recommendations. Rarely do they occur from internal suggestions. Suppliers are the experts on their particular parts or service not you. Heed their suggestions.

            We once had a supplier recommend a simple design change on an iron casting. Not only was it cheaper but the production line was ecstatic because it was much easier to assemble. The former appendage of the old design had often broken off during assembly.

Become a Transformer!

https://www.amazon.com/author/tomdepaoli

Try these transformational books!

Why Women Are Much Better at Breakthrough Negotiations!

Why Women Are Better At Relationships.

Women are far superior in relationship building and getting people to cooperate and problem solve together. Negotiation at the strategic level should not be considered a "contest" or sporting event. Unfortunately, many men view it in this manner. At the strategic level it is more about making breakthroughs together and getting a unique competitive advantage, that your paying customers cannot ignore. You desire what I call "leapfrog" breakthroughs, not wins and losses. Again, we do not want to stereotype, but from my experiences, most women have far superior relationship building skills. Don't confuse this with the old fashion beat up your opponent adversarial negotiation methodology. This is appropriate for some situations. But it rarely results in breakthroughs.
I explain this in more detail in my books.

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Pay Purchasing via the New Wave

 

 

 

 

 

Most supply chain professionals are familiar with the best practices of a supply chain organization and how to transform purchasing into a lead strategic partner in a company. These usually include a thorough spend analysis to focus on the major areas of materials and services. Another aspect includes the rationalization of suppliers and the formation of a few key partnerships with important suppliers. The institutionalization of a comprehensive sourcing methodology is also crucial. The area that is often overlooked or neglected is the investment in people!

Many purchasing professionals have been rewarded for bureaucratic and tactical behaviors for many years. The culture of risk aversion is prevalent and roles are particularly well-defined and limited. They focus on a particular material or service and become “experts” on these items. Often they work in silos and have no real connection with operations. It is usually not their choice but the expectations of the culture or of their organization.

The retraining of supply chain professionals begins with developing the capability to lead cross-functional teams not only in sourcing, but in process improvement activities such as Lean and Lean Six Sigma. Most need to reach the level of at least a green belt in a process improvement approach, and to reinvent themselves to be total product experts not just a particular material expert. You have to be a product expert to understand the Voice of the Customer (VOC) or what is really important to them. This requires striving to become an expert in an entire industry not just a narrow material. It also requires a dedication to understanding and working with operations. Performance reviews need to be tied into how well they do in predicting the market trends of their particular industry and meeting or exceeding the VOC.

All too often this training is piecemeal, unorganized and uncoordinated. Fortunately there is a comprehensive approach that has been around for 40 years that works in many industries particularly ones where employee knowledge is highly valued like the chemical, oil and process industries. The approach has been called pay-for-skill or pay-for-knowledge. Employees are paid more for each skill or knowledge area that they develop, and demonstrate their proficiency in by job performance. It does require a significant monetary investment by the organization in training employees and the organization evolves to a continuous learning campus. The word campus is critical because many organizations partner with local technical schools or universities to jointly provide the comprehensive training and courses.

Unfortunately many organizations have disinvested in training employees and would rather outsource for many skills or functions. This is deadly to the supply chain concept and process improvement, which must strive to constantly improve the entire supply chain from start to finish without breaks which may or may not be performed better by an outsourced entity.

The major objection to the pay-for-skill approach is the cost and the length of time for payback from the employees’ improved knowledge. Once in place, however; the power of this employee intellectual capital, and the momentum of continuous improvement, establishes a supply chain centric organization that is nearly impossible to beat competitively.

People transform supply chains and organizations not technology or best practices.

Why Broken Windows Management For Organizations

Why Broken Windows Management?

The biggest reason for using the Broken Windows Management method is its simplicity, speed and its success record. People have a very low tolerance for long drawn out and methodical processes to improve work. The Broken Windows Management approach offers a quick and more rational approach to improving work. It works best when the people who actually do the work participate in and make the changes.  This foundation in fixing employee dissatisfiers adds to its credibility. It is a full speed ahead solution to small improvements in quality of  work life and processes.

Who Does the Work - Advantage

            Employees should point out the issues and problems; they can also participate in fixing them. It can be one of the more participatory management strategies.

Is the Broken Windows Management the Right Tool?

            Using the Broken Windows Management in an organization that is not ready for it is a losing proposition. Employees must be convinced that management is serious about the theory and backs up the theory with visible results.

1.    Get the small projects done quickly

2.    Don’t be afraid of being overwhelmed, keep fixing and attacking the employee issues.

3.    Get leadership on the firing line or on the shop floor including executives.

4.    Get as much intelligence about what employees want as you can handle.

5.    Fix things!

Does Broken Windows Management Work?

            First off the track record of many management flavors-of-the-month is abysmal. Although the broken windows theory has be used in law enforcement and is controversial, my main recommendation for using it is t the following:

·      It actually fixes the issues that employees’ want fixed.

·      It is highly visible and can be easily tracked.

·      No expensive consultants or theories are involved.

·      It does include improving quality of work life and morale.

·      It improves the entire organization’s skill is fixing things.

·      It builds employees trust in management.

I cannot honestly point to reams of data or studies that a\say that it works. I can only say that out of many management theory options or fads it is one of the most practical and uncomplicated.

I urge my readers to give it a try.

Broken Windows Management for Business

Review from Kelly Barner!

One of the most powerful things you can do with broken windows management is to empower your employees to fix their own issues whenever possible.” (p. 35)

In his fifth business book (seventh overall) Dr. Tom DePaoli takes broken windows theory and combines it with liberal doses of lean methodology and his own no-nonsense approach to process improvement. While this is not a long book, just 70 pages long, it is a working book. This is emphasized by the pages at the back that are specifically designated for “Doodles, Notes, and Ideas.”

Broken windows theory is an approach to establishing and maintaining urban stability by addressing minor crimes and disturbances. Simply put, the idea is that if you fix the broken windows, the effect that has on the environment will lead to reductions in larger scale crimes. Introduced in 1982, broken windows theory has been applied a number of times, perhaps most notably by Mayor Rudy Giuliani and Police Chief Bill Bratton in New York City. It was also covered by Malcolm Gladwell in his book The Tipping Point.

Dr. Tom takes the theory and focuses on the role it can play in empowering employees by working with them and through them to improve an operation. As he wrote, “The more you fix problems, the more employees will trust you.” (p. 9) But while these changes may be minor in the grand scheme of things – access to food/drink, better parking, conveniently managed supply inventory – the reason for all of it is improved team cohesion and results.

There are two ideas that I particularly like:

Anticipatory maintenance: “Instead of having maintenance people wait around and wait for something to break, encourage them to seek out issues that bother employees and work with employees to improve them. This is beyond preventative maintenance, where you maintenance workers team up with the employees and find out the real issues that can make their quality of work life better.” (p. 31) This is a great application of broken windows management. It signals the importance of time and effort, and positions every member of the team as a valuable contributor. Since no situation is ever perfect, there is always an opportunity to make improvements. Allowing employees to make decisions about how to use that time leverages their unique perspective and sets the expectation that everyone be productive at all times.

Non-value vs Value-Adding steps: “Clearly identify the process-cycle time, delays, handoffs, and any inventories, and try to differentiate between non-value and value adding steps.” (p. 19) One of the areas where Dr. Tom’s lean experience really shines is through process discussion and improvement. And as detailed as these processes can be, teams should understand the different kinds of steps that make them up. Not all steps add value – but not all steps need to add value. By understanding the difference, management teams can focus their attention and measurement efforts where they will generate the best return.

If you are a hands on manager looking for a way to improve the performance of your team and operation, this is a great book to pick up over the summer. It is deceptively thought-provoking and actionable for its short length and will help you restore focus to the little things that are really the big things.

Storytelling Method

Dr. Tom DePaoli, Assistant Professor, Management, at the School of Business and Public Safety, has had another article published at My Purchasing Center; Use the Story Telling Method to Train Supply Chain Professionals , Dr. DePaoli describes an approach below:

“The leader of the team should lead off and share personal supply chain stories of success and failures. There should be a general framework for the stories. In our framework, we structure the stories to first give a background of the situation or issue, and then tell how resources are gathered to address the issue (approach), and finally reveal the results. Often the approach to solving the problem is more important than the actual results.”

Dr. DePaoli has published numerous books listed on his Amazon author’s page https://www.amazon.com/author/tomdepaoli  He is a regular contributor to mypurchasingcenter.com.  

One of the oldest methods of passing down knowledge is oral storytelling. Usually an ancient sage would be the keeper of the stories and pass them down to other tribe members. I highly recommend this method for supply chain professionals.

Here are some advantages of storytelling: 

• The brain stores information by stories.

• Stories are humanizing and stimulate creativity.

• Storytelling improves listening skills.

• Storytelling builds a team culture.

• It encourages collaboration.

First, creating the right atmosphere and teamwork is essential in order to establish the validity of this method. The trust of all members of the team and non-attribution is essential. The leader of the team should lead off and share personal supply chain stories of success and failures. There should be a general framework for the stories. In our framework, we structure the stories to first give a background of the situation or issue, then tell how resources are gathered to address the issue (approach), and finally reveal the results. Often the approach to solving the problem is more important than the actual results. Colleagues are encouraged to ask questions and to suggest more appropriate approaches. Supply chain professionals have many touch points or people involved throughout the supply chain. Stories should not be limited to paying customers but include suppliers, colleagues, competition, other departments etc.

Here is an example:

Background: We went through comprehensive sourcing selection process with a cross-functional team. We involved all the key stakeholders and were very meticulous in our research and selection. We were highly confident that we had selected the right water pump supplier and were expecting significant hard and soft savings. The supplier had prior experience with partnerships and alliances.

Approach: Much to my surprise after two weeks I discovered that the process was not going well. Maintenance personnel were complaining about the new supplier so I decided to investigate. I walked around the plant and talked to maintenance personnel and their department heads. I soon discovered that the issue was not the quality of the pumps. The issue was the representative that the supplier had assigned to our account. The rep just could not adjust to our people or culture. The personality was not a fit.

Results: I approached the supplier and requested that a new representative be assigned to our plant. The new representative got along well with everyone and we made great progress in savings and innovation. The lesson that I learned is that the selection team should interview the potential supplier’s representative during the selection process and ensure that they are a fit. We thus added “chemistry” to our selection process.

We used this same storytelling method after every sourcing event and continued to discover issues that we had missed. We then added them to our overall sourcing methodology or checklist. Storytelling is a powerful collaborative learning tool. I recommend taking full advantage of it.

- See more at: http://www.mypurchasingcenter.com/office-products/blogs/use-storytelling-method-train-supply-chain-professionals/#sthash.xfO90rxV.dpuf