SDI Group Tackles Competitive Issues at SELF14

SELF14, the annual executive logistics forum which was hosted by SDI Group USA Feb. 3-4, in Las Vegas, offered its 100-plus delegates insights into a variety of top-of-mind industry issues, including global trade and logistics, RFID, omnichannel delivery models and more. 

SDI, whose clients include Nordstrom, lululemon athletica, Reitmans, Hot Topic, Abercrombie & Fitch and others, specializes in material handling to include consulting, design services, software solutions and technology, implementation and after-sales support. In his opening comments, SDI president Krish Nathan (pictured) stressed the importance of long-term relationships as key to its industry partnerships (for example SDI and Nordstrom have partnered for 35 years)  as well as SDI executive involvement at the account level.

Among some of the talking point highlights from SELF14:
  • David Maloney, senior editor, DC Velocity, on talent:  "There is and will continue to be a shortage of talent in distribution systems, and some workers will be replaced by automation."
  • Steve Lamar, EVP, American Apparel & Footwear Association, on global trade: As companies seek their China plus one or China plus two strategy, "for most it becomes Bangladesh (the No. 3 supplier of apparel to the United States), Vietnam (No. 2) and Indonesia (No. 4). Vietnam is growing. We expect them to stay at No. 2 but put some distance between themselves and Bangladesh. Bangladesh is down to the number 15 supplier for footwear.

    "In Bangladesh you have two commitments, the Accord [Accord on Fire and Building Safety in Bangladesh] and the Alliance [Alliance for Bangladesh Worker Safety].  There is serious money, resources and training behind them and so that suggests for at least the next couple of years we expect Bangladesh to stay in the top five. High profile companies don't want to be seen as leaving the country before the work is done.  But if factors make the achievements difficult to achieve then you might expect people to pull out."
  • Rick DiMaio VP Distribution, Office Depot, on competing with Amazon: "We are all thinking about competing with Amazon … you have to change the offering, de-commoditize, offer new unique products and change the customer experience."

    Office Depot, which bought OfficeMax last year, has 1,600 retail stores globally and is currently ranked seventh in the Internet Retailer Top 500 guide. The company is intimately familiar with cross-channel demands in terms of customer service and has offered guaranteed next-day delivery to 90 percent of the U.S. population for the past decade. It offers retail delivery five days a week, with a 99.4 percent on time rate, and delivers 1 million parcels per week. At Office Depot, the focus has been on a move to multi-purpose facilities combining inventory for all customers, sharing a single warehouse management system and using green as acompetitive advantage, among other strategies. In total, the company achieved more than $100 million in supply chain reductions from 2007 to 2012. As to the future, DiMaio says there will be more inventory leveraging, leveraging of last mile delivery, using fewer but better positioned hubs, access to variable equipment and the seeking of opportunities to combine freight with customers. Interestingly, Office Depot uses robots from Kiva Systems in its warehouses, which was purchased by Amazon in 2012. DiMaio says they are set to keep running for now.
  • Jose Guillermo Zozaya Delano, president and executive representative of Kansas City Southern De MÉxico, (railroad) on Mexico's growth:  "The big moment for Mexico is always coming, coming … but I do think the Mexico momentum is truly coming closer. Mexico's population is still growing and we have location, location, location. … Many reforms have been adopted and better infrastructure will make Mexico more competitive as a global logistic platform.  In fact, Mexico advanced 20 places in the World Bank Doing Business Index from 2006 to 2012.

    "… Mexico exports more manufactured goods than the rest of Latin America and Caribbean combined and investments have increased in railroads, ports and airports. Now in Mexico 27 percent of goods are moved by freight train." [Editor's Note: According to the Wall Street Journal, a bill to open Mexico's railroads to new passenger and freight operators has passed Mexico's lower house of Congress and could be voted on in the Senate before the end of April. The measure's sponsors say the rail duopoly held by Kansas City Southern and Union Pacific Corp. has led to low investment and high freight costs.]

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Susan S. Nichols is publisher of Apparel and may be reached at [email protected].
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