THE FORCE IS STILL STRONG
You likely heard about Force Friday. It happened Sept. 1 with all manner of merchandise inspired by and celebrating the latest Star Wars movie (Star Wars: The Last Jedi) hitting the stores (both brick and online). We’re talking everything from T-shirts and fashion accessories to collectibles and, of course, toy, toys, toys; lightsabers, figurines, playsets, plushies …
You likely heard about the crowds and camper-outters attracted by not only the goodies but special sales, events and activities at participating retailers looking to promote and profit from Force Friday, The Sequel—as they had the first Force Friday in 2015.
It’s just as likely you heard absolutely nothing about the good people in third party logistics and supply chain outfits that bore the responsibility of making sure that every Chewbacca throw blanket and Poe Dameron Electronic X-Wing Pilot Helmet showed up where it was supposed to be and when it was supposed to be there, and heard absolutely nothing about the myriad connections, structures and technologies they employ to ensure that happened.
And absolutely nothing could have made them happier.
“If we’re doing our job right, we’re pretty much invisible,” says Doug Surrett, chief product strategist at BluJay Solutions. “We’re in the background with our clients. Everyone knows who Hasbro and Apple is, no one knows who they’re using for TMS.”
Unless, of course, they screw up. In this way, 3PLs and supply chain outfits are not unlike offensive linemen in the NFL, i.e. you only notice them when something goes wrong. In the lineman’s case, that would be giving up a sack; with 3PLs, that would be a Force Friday II bereft of Yoda Head cufflinks because, yes, that’s an actual thing.
The fact is manufacturers expect a lot more from their supply chain partners these days. They want them to be good at what they do and they expect them to do more, i.e. everything. They want a one-stop shop that can handle everything, be technologically advanced, available, transparent, domestic and international, to know the ropes culturally and the regulatory rules, they want companies that do everything, do it quick, dependably, don’t have to think about.
They want that because that’s exactly what their customers are demanding from them, an expectation that things will be handled immediately, quickly and seamlessly. It’s what Jeff Tucker, CEO of Tucker Worldwide, calls the “Amazon effect” that is an assumption that once a transaction is made everything will be handled perfectly, quickly, completely every single time.
“It’s the ‘I need it now!’” Tucker says. “We’re just seeing an explosion in demand not to mention increasing expectations when it comes to a quick turnaround.”
In many ways, that level of expectation can be connected to an event that happened 40 years ago: the release of the original Star Wars.
As you may be aware, Star Wars not only helped to revolutionized the movie industry when it came to the idea of a blockbuster franchise but also when it came to merchandising. When Star Wars creator George Lucas came to an agreement with 20th Century Fox to exchange his $500,000 director’s salary for the film’s licensing and merchandising rights, people thought he’d lost his mind. Forty years and untold billions in sales later …
Star Wars not only would go on to change the toy industry—it is pretty much singularly responsible for saving the Lego company—it signaled a step up in consumer devotion and expectations. So much so that the initial release of Star Wars merchandise is to the supply chain business what the Titanic is to the cruise industry.
Kenner, the original company to license Star Wars tie-ins, was so overwhelmed by the unanticipated success of the film and subsequent demand for its toys following the May 1977 release that it almost immediately ran out of stock. Six months later, at Christmas, the company still hadn’t caught up and was forced to issue “Early Bird Certificate Packages” that were basically an empty box with an IOU for action figures that would ultimately be available in the spring.
Still, by the end of 1978, Kenner had sold more than 40 million Star Wars action figures and a whole new world was born.
Celeste Catano remembers that old world. Coincidentally enough, she started in the logistics business 40 years ago. Now BluJay Solutions’ Global Product manager for Customs, that old world is best summed up for her by one word: paperwork.
“Piles and piles of paperwork,” she said. “You did paperwork and you helped your customers do paperwork. When I see where the [logistics] industry is today, the big change is in automation. You did everything yourself, by hand. There were people back then, all they did was make calls all day to see where shipments were. Now, of course, we have the technology to not only know where a shipment is at all times but what kind of condition it’s in. Back then, you were just kind of blindly calling and asking ‘Hey, where are they?’”
Of course, that doesn’t work these days. Manufacturers expect their goods to be the object of constant vigilance and care. They want, at any time, to be able to know the location and condition of their products, want to know that they can be informed of everything from customs to warehousing by a couple key strokes on a computer or smartphone, all of it driving 3PLs to get better, faster and more transparent at what they do.
“Consumer buying trends are driving businesses to operate their supply chains faster, cheaper and more efficiently, as shoppers now inherently expect two-day, free shipping,” says Fred Loeffel, executive vice president of Sales and Marketing at Geodis. “Predictions show the surge in direct-to-consumer shopping trend isn’t slowing down anytime soon. That’s forcing supply chains to adapt.”
Loeffel says that all of this has made this “without a doubt, one of the most exciting times to be in logistics.” It certainly is if you’re into change as what we’ll call the Star Wars effect has led to a tidal wave of consolidation and acquisitions in the industry as companies strive to be all things to all customers.
It’s not so much that companies are looking to get bigger as wider, to be able to wrap their arms around an increasingly growing set of expected services and outcomes, and so they are not so much looking to acquire a competitor as a partner. Take, for example, when UPS acquired logistics provider Coyote, whose technological wherewithal is seen as state-of-the-art. UPS didn’t take over, rather, as Jodi Navta of Coyote explained, “Coyote stayed as Coyote. It’s a true testament to our culture that together, UPS and Coyote are working to create a global one-stop shop for shippers’ transportation needs.”
Navta agrees that her industry is going through major changes. “There’s no question that this is an incredible and unique time to be in the logistics industry,” she said. “We are on the cusp of a new era of automation that will bring rapid change in every part of the world. These will be big changes and we all need to be ready for them.”
Which is why the likes of Yusen Logistics announced they had launched Transform 2025, a corporate-wide initiative to become a more knowledgeable and ultimately a more valuable and trusted partner to its customers. Their strategy is to not only gain insight and an understanding of their customers’ needs and challenges but the ability to apply that knowledge to give them a competitive advantage in the markets they serve.
Similarly, when BDP International Chairman and CEO Rich Bolte completed his company’s new strategic plan, BDP 2020, he said it was to “specifically address the world ahead. The pace of change is driving innovation and disruption. Companies all over the globe will have to evaluate those specific factors that are likely to disrupt their current business model and develop the appropriate strategies.
“Those plans will involve investments in information technology, but it must be coupled with an organizational commitment to doing things differently. It is easy to say that one must move faster, deliver services quicker, be more innovative and have an organizational agility to flex with the world, but it takes something quite different to lead the cultural transformation that is required to make these goals a reality.”
So, just as Lucas showed the film industry there was not only a different way to makes movies but how to market and monetize them, 3PLs are attempting to evolve on the run, most especially through technology. This can get tricky since, in olden days, the process of developing new technology involved a long process with multiple layers and tests ultimately with a big rollout to announce the shift.
“You’d sit down for like three days and write down every possible thing you’re hoping to accomplish, making sure it’s all written down on a piece of paper (again with the paper),” BluJay’s Surrett said. “Then you’d pass it around and get 17 different people to sign and then you’re ready to start building.
“The problem with that is you spend oodles of time talking through all of us this without getting anything done. These days that’s unacceptable since everyone expects the latest technology today. They used to be willing to wait, not anymore. Agile software development allows you to gather good information at a high level and get started right away and, through the process, we refine. This ultimately means a shorter release cycle, sometimes each month. That way, the magnitude is not as heavy. It provides smaller bites that are more digestible for the customer.”
A steady diet of new technology will “continue to cause seismic change in the transportation industry,” Coyote’s Navta says. “From automated processes to autonomous vehicles, the landscape of the industry will likely be redefined over the next decade. To stay relevant, [companies] will have to continue finding new and innovative ways to add value to shippers’ supply chains. Figuring out the right solutions for shippers’ evolving needs, and how to implement them, will be simultaneously a daunting challenge and a tremendous opportunity.”
And yet, as much as things have changed and will continue to change in the logistics industry, some things will never change. Face it, as innovative as the Star Wars franchise has been to filmmaking, ultimately its success rests in large part with its ability to take the happenings of a galaxy far, far away and make them connect with folks here and now. That connection is on the most basic—and intense—human level.
To that end, BluJay’s Surrett says, the business of moving product, no matter how automated, technologically advanced and global it becomes will always hinge on that which is most essential.
“Relationships still drive business, all business,” he says. “Yeah, a lot of people, especially in the U.S., are comfortable meeting over the web. But I’m telling you that in places like Europe and Asia, they’re not that way. They want to see you.”
To achieve and assure that, Surrett says BluJay CEO Doug Braun logs somewhere in the neighborhood of 400,000 miles of travel each year.
“We make quite a bit of contact with our customers, we want them to know we’re there to support them, and it’s very common for us to have daily calls with them,” Surrett said. “And they want that, they appreciate that. They want to see you face-to-face, want to shake your hand and know there’s a real human being that they can get to know and, most importantly, trust.”
Ultimately, no matter the time, place or galaxy, that is a force to be reckoned with.
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