In September I took my third trip to Park City, Utah for the Material Handling & Logistics Conference (MHLC). I did not present this year, but I did have the privilege of serving on the planning committee. Looking back at this year’s program. I’m again very pleased and continue to be impressed by the quality of this event.
Full disclosure, this event is hosted by Dematic along with a handful of their partner sponsors. If you’re looking to shop the material handling marketplace and compare vendor offerings, this is not the place. However, I will give Dematic a lot of credit for making this a
quality program with broad appeal and an objective set of topics and speakers. You will always know that Dematic is your host, but you will not be disappointed by the level of hospitality and the of the event execution.
So here’s a quick recap of some highlights and overall impressions, beginning with the headline speakers and entertainment. Without going on for too long, but more as further evidence of the overall quality level, Condoleeza Rice was the dinner speaker on Monday evening, and everything wrapped up Tuesday night with a private concert by ZZ Top (a personal favorite I must add). Both were exceptional in their own way.
In prior years there was a lot of conversation about economic recovery and “are we there yet?” I didn’t really hear that this year. Most attendee companies are growing and expanding and many are considering or already implementing major capital projects. Nobody really questions the recovery, I think most have accepted that some things have changed permanently since 2008 and the good ones have adapted and excelled. Stuart Varney, in has talk on The Global Economy noted that while we have largely recovered from the crash of 2008, it has permanently affected how we think and act.
As in prior years, the conference sessions are organized in six tracks, so there was a lot to choose from, and unfortunately you have to make some tough decisions at times. I focused on a few areas of interest with a main focus on topics related to E-Commerce and fulfillment.
Here are my noteworthy takeaways:
Foretracking – Mike Honius (OHL) spoke about a common-sense approach to operations management. Foretracking involves a closed loop set of numbers that allow operators use sales forecasts and generate a forward look at activity levels and labor requirements by functional area. Given the high demands for fast order turnaround it is essential to be appropriately staffed to handle the peaks and valleys. This is great example of the fundamental handle on operations and operational drivers that many companies are lacking.
The Customer is now in Control – Mark Wulfraat’s (MWPVL International, Inc) presentation on E-commerce made the case that we are now in the age where the customer is in control. Since the 60’s and 70’s, the power in the retail supply chain has shifted from the manufacturer to the retailer and now to the end consumer. This is evidenced by the level of service being offered in the E-commerce world, led by Amazon. Amazon represents about 20% of the E-Commerce market and a quick audience poll showed about 90% of the 80 or so in the room were Amazon Prime members.
Mark has spent countless hours over many years digging through every shred of public information on Amazon to compile a detailed picture of where Amazon has been and where they are going. From next day, to same day to 1 or 2 hour delivery windows, Amazon is setting a service expectation that few (if any) can match. Nobody, including Amazon to this point, can do so and also make a profit.
The question for everyone else in the room is how to meet customer expectations for speed and flexibility of delivery at a reasonable price? We’re all waiting to see how long Amazon can continue to operate at a loss and still enjoy the favor of Wall Street.
Four Perspectives on Taking the E-Commerce Plunge – A panel discussion involving leaders from Dillards.com (Tony Bolte), Giant Eagle (Chris Kelly) and Abercrombie & Fitch (Todd Vallely) highlighted the challenges E-Commerce companies face in trying to meet those high customer expectations while also managing profitability. Each of these companies have robust brick and mortar operations (unlike Amazon) and have employed omni-channel strategies to offer the customer options for order pickup and for returns. Delivery pricing policies are set to drive customer behavior in more economical directions.
Another theme of the panel discussion was automation and planning around increasingly sharp peak demand periods. While more automation is being deployed, temp labor is still a major tool in flexing capacity to meet seasonal peaks and valleys. Our colleagues in Marketing don’t show any sign of slowing down the heavy promotions on Black Friday, Cyber Monday, Green Monday, etc. As operations managers, this is a business requirement and the expectation is that it will be met with minimal reduction in service.
The MHLC is a very well done event. It hits a lot of my priorities, both professional and personal:
• Interesting Sessions – across a range of topics, I can always find a interesting speaker on a subject relevant to me
• Featured Speakers – the program includes 4 or 5 top notch speakers addressing specific topics such as economics or innovation and things to help in personal development, leadership and motivation
• Networking – The crowd size, venue and social agenda provides many opportunities to engage in conversations with industry peers
• Outside activities – Go early and enjoy what Park City has to offer. Best known for skiing, but in mid September this is one of the best mountain biking locations anywhere. There’s also golf, horseback riding, fishing, rafting and more.
• Entertainment – If you’re a music lover, particularly the classic rock genre, you can depend on a big name act in a small venue
There were a number of interesting topics that deserve more attention and I hope to delve into those further in the coming weeks and months.