“We urge Congress to exercise their power to step in to keep the flow of goods moving and avert an avoidable economic catastrophe. Such a significant interruption of supply chains at this critical time would have a broad and dramatic effect, while interfering with retailers’ ability to provide customers with the items they seek during the holidays and beyond,” said RILA President Sandy Kennedy.

Retailers rely on an efficient rail transportation system to move products to distribution facilities and stores every day of the year. Freight rail is a crucial to the movement of retail goods and any disruptions in that link would be destructive to the retail industry’s ability to deliver their goods in a “just in time” fashion.

“A national railroad shutdown would force retailers to shift the delivery of their goods to trucks, increasing costs, time of delivery and congestion on our nations already crowded roadways,” added Kennedy.

In letters to House and Senate Leaders, RILA urged “we strongly encourage Congress to preemptively impose the terms recommended by the Obama Administration Presidential Emergency Board to avoid the potential disastrous negative impact.”

RILA is the trade association of the world’s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.
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“METRO GROUP is very optimistic about RFID-based EAS,” said Dr. Gerd Wolfram, managing director at METRO SYSTEMS. “We’re confident that RFID builds on the usability of traditional RF EAS both for loss prevention as well as inventory visibility, enabling us to better serve our customers.”

RFID Overhead EAS is a key component of an integrated solution delivering real-time inventory and related benefits, while serving as an enhanced EAS system, improving operations at the point-of-exit. It leverages open-standards RFID technology and delivers several new, important benefits for apparel retailers:

• Leverages a single RFID tag for inventory visibility and loss prevention. The Overhead Solution uses one tag for multiple purposes, increasing efficiency at point-of-sale and cost-effectiveness over the long-term.

• Provides an open entrance. Installed either suspended from the ceiling or fully concealed within it, the Overhead Solution enhances the store entrance’s appearance.

• Enables retailers to know what was stolen. The Overhead Solution enables retailers to actually know what was stolen, the quantity and the dollar value, helping them to maintain shelf availability and respond smarter to a theft event.

• Enables retailers to fight all sources of theft. Apparel retailers now have the potential to distinguish among the actions more typical of a casual shoplifter from a professional thief or organized retail theft group, enabling them to take action based on the size and scope of the event.

• Enhances theft deterrence. Combined with Checkpoint’s Merchandise Visibility Solution™, apparel retailers can enhance deterrence by displaying an image or description of the items that were stolen, warning shoplifters of the presence of a more sophisticated system, and causing them to recalculate the risk.

• Increases alarm integrity. By leveraging encoded tags, retailers benefit from the Overhead Solution’s ability to “ignore” tags from other retailers, helping associates respond confidently to alarms, and increasing customer satisfaction.

The RFID Overhead EAS Solution builds on the success of Checkpoint’s high-performance series of RF and dual RF/RFID systems, and encompasses hardware, software and tags. A key advantage is a unique combination of patented hardware and software technology called Wirama Radar™, which ensures data integrity by eliminating stray reads. This technology uniquely enables Checkpoint to deliver unprecedented accuracy and context in reporting the location and directionality of movement of tagged merchandise, providing insight much like commercial radar informs air traffic controllers, meteorologists and the military, while adhering to EPCglobal standards.

The RFID Overhead EAS Solution joins the previously announced Handheld Visibility and Open EPC Number Management Solutions as part of Checkpoint’s solutions portfolio to deliver increased Merchandise Visibility to apparel retailers. Beyond this point-of-exit solution, Checkpoint plans to add several additional solutions in the coming months to provide value for the growing number of apparel retailers that seek to leverage RFID to reduce out-of-stocks, reduce working capital, increase sales, as well as enhance loss prevention and the customer experience.

Checkpoint developed its RFID Overhead EAS Solution to address apparel retailers’ needs to leverage RFID both to maintain inventory at the speed of fashion, as well as to reduce shrink, notable for the apparel industry due to its #2 rank among all retail verticals for shrink as a percent of sales, according to the Global Retail Theft Barometer.

“The ability for a single RFID tag to deliver benefits both for inventory management as well as loss prevention is an important advantage for apparel retailers seeking to maximize the value of their RFID investment,” commented Dr. Bill Hardgrave, dean of Auburn University’s College of Business. “Determining the static location and dynamic directionality (movement) of merchandise are essential to truly addressing data integrity and loss prevention.”

“As apparel retailers increasingly adopt RFID to increase sales, reduce out-of-stocks and reduce working capital, they are also considering the impact that this technology can have on their loss prevention practices,” noted Per Levin, Checkpoint Systems’ worldwide president, Merchandise Visibility Solutions. “We’re providing apparel retailers with solutions that offer a pathway to achieve promising benefits, independent of their individual starting point.”

The RFID Overhead EAS Solution is now being field-tested by major retailers, and will be available in early Q3.

About Checkpoint Systems, Inc.

Checkpoint Systems is a global leader in shrink management, merchandise visibility and apparel labeling solutions. Checkpoint enables retailers and their suppliers to reduce shrink, improve shelf availability and leverage real-time data to achieve operational excellence. Checkpoint solutions are built upon 40 years of RF technology expertise, diverse shrink management offerings, a broad portfolio of apparel labeling solutions, market-leading RFID applications, innovative high-theft solutions and its Web-based Check-Net data management platform. As a result, Checkpoint customers enjoy increased sales and profits by improving supply-chain efficiencies, by facilitating on-demand label printing and by providing a secure open-merchandising environment enhancing the consumer’s shopping experience. Listed on the NYSE (NYSE: CKP), Checkpoint operates in every major geographic market and employs 5,600 people worldwide. For more information, visit www.checkpointsystems.com.

CONTACT:
George Cohen (for Checkpoint)
GCC, Inc.
617-325-0011
george@gccpr.com

IBM is replacing Danone’s existing network to increase the flexibility and responsiveness of its business-to-business (B2B) commercial interactions to improve its overall customer experience.

Part of IBM’s unfolding Smarter Commerce portfolio, IBM’s Sterling Collaboration Network, is being rolled out across Danone’s global business units, each including multiple sales and distribution points and factories. The large-scale deployment involves the onboarding of up to 600 trading partners to the IBM network and management of nine million messages a year.

The project supports the full spectrum of Danone’s order-to-cash processes, including ordering, invoicing, delivery and logistics. The solution provides traditional electronic data interchange (EDI) across a diverse range of formats required by Danone’s partners, allowing third party data to be integrated with Danone’s warehouse data.

IBM’s solution was selected by Danone to improve flexibility in its ability to respond to the individual needs of its customers, which include large retailers. By delivering real-time visibility and control over the business processes shared with its community of customers and partners, IBM’s Sterling Collaboration Network brings Danone accuracy and speed in responding to customer demands, largely enhancing the customer experience.

“IBM’s Sterling team was quick to react to our requests for increased flexibility in meeting trading partners’ needs,” said Hans Vollebregt EDI solutions at Danone Information Systems. “The company also has a proven track record in Europe in providing B2B integration as-a-Service. And the team’s willingness and ability to meet our needs is what made all the difference in our choice of a B2B partner.”

Danone also looked to gain greater reliability and availability from its B2B network provider to lower costs. The increased B2B network reliability ensures that Danone does not suffer any downtime in its B2B operations, while enhanced visibility improves performance and control over operations. Coupled with the ability to onboard new Danone business units and trading partners quickly, these improvements drive down costs for Danone.

“Success in the fast-moving consumer goods sector depends entirely on the ability to communicate immediately and effectively with different partners across the supply chain to gain control over processes and inventory,” said Ronald Teijken, IBM EMEA manufacturing industry executive. “With its large trading partner network, Danone will reap the benefits of providing an optimized trading network with streamlined business processes.”

For more information, visit: http://www.ibm.com/press/smartercommerce.
Contact(s) information

Mike Azzi
IBM Media Relations
914-766-1561
azzi@us.ibm.com

Willemijn Steegenga
IBM Media Relations
+31 20 560 5794
Willemijn_Steegenga@nl.ibm.com

The automaker said it was unclear which facilities would be affected or how long the suspension might last.

The impact should be limited because the majority of parts used by its North American factories come from suppliers in North America, Toyota said. It said the facilities still are receiving parts from Japan that were “already in the pipeline” before the quake.

In a statement, Toyota said they told team members, associates and dealers that production interruptions were likely, but it is too early to predict location or duration.

Meanwhile, Toyota plants in Ontario are not ready to resume offering Saturday shifts or overtime work at their Woodstock and Cambridge plants.

Most part suppliers in Japan are already back up and running, but this isn’t enough to persuade the Ontario plants to kick back into full-gear.

The majority of Toyota and Honda assembly plants in Japan have remained shut down in the wake of the disaster.

Toyota and Honda executives said they still have enough parts in inventory to sustain normal production until sometime next month, according to a report by Reuters.

SCM has received more mainstream attention this year than ever before. Not that it has been a cover story in the media, but within both public and private sector organisations the SCM body of knowledge is being recognised and used to facilitate post-recession recovery efforts. As Trevor Miles of Kinaxis wrote, “Supply chain is becoming known as the sweet spot for affecting competitive advantage and operational and financial success.” In that spirit, here is our Weekly Link Top 10 of 2010:” Link to full article on Bangkok Post

Logistics management is no longer regionally based, but handled on a national and even global scale. Due to the complexities innate to such large supply chains, there is a significant increase both in complexity and in potential liability to the brand owner.

For example, it is not uncommon for active ingredients to be manufactured in one region of the world, packaged in “bright stock” form in another and then finally packaged for distribution in a third. If at any point in time it becomes necessary to recall that product, it can negatively impact multiple regions both nationally and globally. In response, pharmaceutical manufacturers must jump into action and react as quickly as possible to solve these issues before they spiral out of control.

Enter ePedigree and serialization mandates. By 2015 pharmaceutical manufacturers will be accountable for being able to track and trace where any given drug is in real-time, while simultaneously being able to trace its entire history throughout the manufacturing process.

Each mandate is aimed at improving patient safety, product integrity and supply chain security. Additionally, these mandates will further aid pharmaceutical manufacturers to gain full control, visibility and access to every single item in their supply chain – both inside and outside their walls. RFID technology will further enable pharmaceutical companies to track products throughout the production line and then compile robust data in an organized and reliable manner.

The goal of the mandates is simple. By 2015, when an event occurs inside the pharmaceutical supply chain, companies will be able to (and must) address the issue quickly, offer a transparent account for where every affected product is and begin to remedy the situation in a matter of hours. In preparation for the 2015 initiative, many companies are beginning to collaborate in development and implementation of flexible solutions that minimize the burden of compliance by increasing supply chain visibility and assisting in global serialization.

If they don’t, they not only risk inquiries and fines from the government, they also risk damage to their brand – damage that in today’s social media world may be irreversible.

John DiPalo

While most food safety reforms focus on the protection and prevention of contamination, traceability systems are critical to quickly identifying product origins for removal from the supply chain. According to the CDC, an estimated 76 million Americans get sick from food borne illness each year, more than 300,000 are hospitalized and about 5,000 die. With such high numbers, growers and retailers alike need to be aware of how invaluable track and trace technologies are.

As the market leader in RFID and thermal printers, Zebra Technologies’ broad experience in supply chain management and building unique RFID and barcode solutions across a variety of industries has illustrated the importance of providing traceability – especially within the food industry. The below video with David Senerchia , Director of Business Development of Zebra Technologies, highlights the importance of food traceability throughout the supply chain:

With more label and scan points throughout a dairy, produce or food growers operation and shipping, products can be more accurately traced throughout the supply chain. This provides an extra layer of protection should a food-borne illness occur – allowing growers to quickly review their records to determine if the faulty product came from any of their farms and then alert their partners.

This can save businesses time, money and reputation. As produce growers/shippers look to obtain Produce Traceability Initiative compliance, they can look to Zebra as a reliable product partner to provide practical, mobile and desktop printing solutions to ensure multiple label and scan points to track the life of the product from farm to fork.

IDGA’s Military Logistics Summit 2010 will present updated DoD mission priorities and cutting edge information to support major deployment, re-deployment, and distribution operations. The event will bring together thought-leaders and decision-makers in logistics, sustainment, and readiness operations to discuss the latest implementation strategies and program initiatives to ensure the flexibility and preparedness of our military’s future.

“Over the years, the Military Logistics Summit has become the leading event for senior-level defense logistics professionals,” said Thomas Engleman, the event’s producer. “This year, we’re introducing an ‘Ask the Expert’ feature, where a logistics expert will be on-hand specifically to answer questions. We try to do something new every year, while keeping the same quality and standards people have come to expect.”

Specific summit topics that will be covered include:

* Changing regional priorities affecting all aspects of the defense transportation network,
* Enhancing combat unit readiness through more effective supply chain management and optimization processes
* Executing performance-based lifestyle product support for more efficient and cost-effective sustainment.

The speaker roster includes:

* LTG Mitchell Stevenson, USA, Deputy Chief of Staff for Logistics, G4, US Army
* LTG James Pillsbury, USA, Deputy Commanding General, US Army Materiel Command.
* VADM William Burke, USN, Deputy Chief of Naval Operations for Fleet Readiness and Logistics, N4, US Navy
* MG Randolph Strong, USA, Commanding General, CECOM LCMC, US Army
* An entire speaker list can be found on the event’s website.

For more information on speaking, exhibiting or attending IDGA’s Military Logistics Summit, please visit http://www.MilitaryLogisticsSummit.com or contact Erin Gilbert at ErinGilbert@idga.org.

The Institute for Defense & Government Advancement (IDGA) is a non-partisan information-based organization dedicated to the promotion of innovative ideas in public service and defense. IDGA brings together communities comprised of military, government, vendors and academia for education, networking and advancing the communities in which it serves. For more information, please visit http://www.idga.org.

Over the last several years there has been a marked increase in the use of Commercial-Off-The-Shelf (COTS) components in configuring new weapon systems. This initiative has been driven by Commanders in-theater requiring the rapid fielding of new weapon systems to fight a new type of enemy.

The traditional approach of sourcing components that are Developmental Items has been recognized by Program Manager (PM) Offices as being much too lengthy to meet the urgent needs for most new weapon systems; our Special Forces commands have been the most aggressive in using COTS based weapon systems. COTS items have been identified as the solution to field a weapon system quickly and relatively inexpensively.

System integration efforts are typically higher for COTS based systems compared to those of Development Item based systems, but due to the materially lower unit costs of COTS items, the overall weapon system is often an attractive value proposition to the PM Office.

Note that there is also a macro-issue that is driving greater use of COTS items; the commercial market dwarfs that of the defense community and contractors have been more and more “forced” to look for COTS solutions for their customers. In 1980 US defense costs were approximately 10 percent of GDP.

By 2000 it had dropped to about 3.2 percent and now is at about 3.8 percent due to our current conflict in Southwest Asia. It is estimated that in five years, due to the reduction in the current conflict and a continually growing economy, defense expenditures may fall below 3.2 percent. From all indications, COTS items will come to dominate most US defense weapon system acquisition programs.

The majority of PM Offices, working closely with contractors, have been very effective in providing field commanders with COTS based solutions. The PM’s track record in being efficient in dealing with the upgrading of COTS products, as well as in dealing with the product support of a system, has been at a lower level of performance compared to that of acquiring the system.

Joint PM Offices have been the most challenged in dealing with these shortcomings. The Congressional passage of the Weapon System Acquisition Reform Act (WSARA) of 2009 is direct result of attempting to address these cost overrun issues.

Note that as a result of an abundance of supplemental funds to pay for system acquisition, as well as for paying for a good part of the product support processes employed during the early years of a fielded system, most PM Offices have had little pushback from leadership regarding the often unfavorable variance from planned Total Ownership Cost (TOC); a good fitness report for an O5/O6 is still being primarily driven by the effectiveness of fielding a new weapon system.

As supplemental funds begin to decrease in the next one to three years, due to many reasons, many of the acquisition/product support business models crafted by the PM Offices will begin to be severely challenged due to a reduction in the amount of funds that a PM Office is able to utilize to deal with “problems;” system availability levels will decrease and product support costs will increase. Unfortunately, the PM who had crafted the business model for the COTS based system will have long been gone, leaving the current PM and Product Support Manager/ILS Lead in the PM Office to cope with multiple challenges.

Vice Admiral Mark Edwards, Deputy of Naval Operations for Communications Networks (N6) in April 2008 stated below his opinion regarding the promise of COTS technology and the reality of the acquisition and product support processes.

“Millennium sailors were born with laptops in their hands…but when we get them into the Fleet, the disconnect between what they were promised and what they find will be profoundly disappointing–a veritable bait-and-switch scheme. They will discover that our “leading-edge-off-the-shelf” and “state-of-the-art” technology is at best ancient….

The two-way communication bandwidth of a single BlackBerry is three times greater than the bandwidth of the entire Arleigh Burke destroyer. Looked at another way, the Navy’s most modern in-service multi-mission warship has only five percent of the bandwidth we have in our home Internet connection…. By the time it gets to the people who need it, it is already out of date.

The important point that the Admiral was making is that our men and women in uniform are often technology savvy for COTS items; it is what they use as consumers on a day-to-day basis. Think PC, think router, think cellular phone and think GPS. Young adults, the majority of military personnel, have been conditioned as consumers to replace their technology every one to two years.

When members of our volunteer military see COTS technology, which they know is three to seven years-old, they can easily feel that they have been “betrayed” in not being provided with the latest and greatest technology to fight our enemies. As for Developmental Items, our soldiers have had none or very little experience as a consumer and cannot equate whether an item is in fact state-of-the-art.

Note that Al-Qaeda can cruise the internet for new COTS technology, place an order with a credit card and have it delivered via DHL to their country of choice within 48 hours. It is not hard to see why our Warfighters are confused as to understanding why our PM Offices cannot have similar flexibility.

Ron Giuntini

Note: A related webinar: Success with COTS Components: How to Estimate the Costs of COTS Items During the Product Support Stage of a Weapon System Lifecycle will be conducted by the author of this article Ron Giuntini, you will not want to miss his Success with COTS components webinar, taking place August 17th, 2010.

Western sellers of cars, computers, apparel and other popular consumer items must be having conniption fits. Many exist on perilously thin margins – that’s why they flocked to China in the first place – yet are facing higher supply chain costs at a time when demand for their products is anything but assured. More than a few will be booking flights to Vietnam, Malaysia and Bangladesh, in search of the next army of compliant, low-cost workers.

They’ll need to look fast. What’s happening in China isn’t a temporary phenomenon. Already we’ve seen strikes at Chinese plants making critical automotive parts for Honda Motor Co., Nissan Motor Co. and Toyota Motor Corp.; electronic components for Japan’s Mitsumi Electric Co., Ltd.; air-conditioning systems for a division of Ingersoll Rand, and beer for Denmark’s Carlsberg Group, to name a few. And let’s not forget the recent turmoil at the Taiwanese-owned Foxconn Technology Group, which boosted wages following a rash of employee suicides at its massive complex in Shenzhen. By all appearances, the summer of the Chinese industrial worker is far from over.

A curious thing about these uprisings is the way in which the Chinese government is treating them. There’s been no replay of the Tiananmen Square protests of 1989; demonstrators aren’t being arrested or shot, and the military isn’t out in force. The strikes are even being reported in the state-controlled Chinese press. So what’s going on?

Consider first that the strikers are making fairly narrow, specific demands for better pay, working conditions and chances for advancement. They’re not challenging the legitimacy of the Chinese government. (Not yet, at least.) There’s even a sense that Chinese leaders are welcoming the protests as an excuse for developing a stable middle class. After all, if workers aren’t adequately paid, how can they afford the level of consumption that’s critical to a vibrant domestic economy? China has spent the last 20 years making products for world markets, but with its extensive natural resources and population of 1.3bn, it represents the biggest market of all.

And so the endless migration of global manufacturing capacity continues. Or does it? Josh Green, chief executive officer of Panjiva, suggests that it won’t be so easy for manufacturers to find “the next China.” They’ll need a location that mirrors the three ingredients to China’s amazing success: government policies that are friendly to trade, a solid infrastructure of factories and transportation capability, and a large, under-employed labor pool.

That last element is what has allowed China to keep its labor rates down even as manufacturing activity has soared. As Green points out in a recent article, “there were so many people that needed jobs that it seemed companies would always be able to find more people that were willing to work for very little.” Emphasis on “seemed,” because this state of affairs is fast coming to an end.

India, with its population of more than 1.1bn, is the obvious alternative. But total costs there are unacceptably high, says Green, thanks to a lumbering bureaucracy and lack of supporting infrastructure for trade. With its huge population and widespread use of English, India “should have been China before China was China,” Green says. But bodies alone don’t make for an attractive source of low-cost production.

And what about all of those developing countries, like Vietnam, Indonesia and Malaysia? Eager as they might be for business, they lack the populations to support a sustained environment for manufacturing. Once industrial activity gets a foothold in any of those countries, competition for labor will quickly drive up wage rates.

Leaving us, then, with the prospect that there is no “next China” on the horizon. To be sure, manufacturers will keep on sourcing in China for some time to come; even with substantial raises for its workers, the country will still be a lot cheaper than most alternatives. (Although Apple Computer might have to shave a few points off the staggering profit margins that it derives from the iPhone, iPod and iPad.) But don’t expect another part of the world to emerge as the next center for low-cost offshore manufacturing on an equally massive scale.

Instead, companies will have to look beyond the cost of labor to other aspects of their supply chains. Green says they’ll need to do a better job of working across multiple geographies. Adrian Gonzalez, director with ARC Advisory Group, sees a renewed push for continuous improvement through practices such as Lean manufacturing.

There’s still plenty of waste in most global supply chains, Gonzalez says. Now is the time to begin hunting it down. One possibility is for multiple shippers serving a common retail customer to combine loads for the more efficient use of equipment, and fewer empty miles. The idea has been talked about for years, but with supply-chain costs on the rise, its time might finally have come.

Ultimately, though, manufacturers, retailers and buyers will face an even more unsettling notion: the end of rock-bottom prices for consumer goods. Big-box retailing was built on the philosophy of deep discounting, with Wal-Mart Stores and its competitors demanding ever-lower costs from suppliers. The ready availability of cheap labor in the developing world made it possible.

The search for cost savings never ends, says Simon Ellis, practice director for supply chain strategies with IDC Manufacturing Insights, “but at some point you’re going to find that there simply aren’t adequate [low-cost sourcing] alternatives anymore … and just accept that the global economy has now emerged, and we’re going to have to pay emerged-economy labor rates.”

As consumers, we’ve been trained to expect – indeed, demand – an endless stream of bargains. Now, as we face the reality of a world marked by ever-rising costs, higher standards of living and dwindling resources, we’re in for a re-education.

- Robert J. Bowman, SupplyChainBrain