Art of Supply

“Folks from Dell to HP to Nike to Hasbro to Sony to Apple to Google to Goldman, they're all looking back at India and saying, let's go double down, triple down and build a presence here.” - Samir Kapadia, Managing Principal at Vogel Group and Founder and CEO at India Index

Most companies are obsessed with moving their supply chains out of and away from China - whether it is for regulatory, risk, or human rights-related reasons. That obsession is so strong, that in some cases, they are willing to embrace an “ABC strategy” as you will hear from this week’s guest: anywhere but China.

Samir Kapadia is a managing principal at Vogel Group, a lobbying and trade organization based in Washington, D.C. In 2019 and in 2020, he was ranked the number one tariff exemption lobbyist in Washington D.C.. Samir is also the founder and CEO of a B2B marketplace called India Index, which helps U.S. companies source from India, so he is uniquely qualified and also entirely willing to be honest about the opportunities and challenges of looking to India as an alternative to China.

In this episode of the Art of Supply podcast, Kelly Barner takes the opportunity to ask Samir for his professional opinion on:

• Why China looms so large over global supply chains
• The mindset and culture that play into corporate decisions about where to source internationally, and when to make a change
• Reasons India deserves serious consideration as an alternative to China as well as what companies should be aware of before they make new plans

Links:

• Samir Kapadia on LinkedIn
• Kelly Barner on LinkedIn
• Art of Supply LinkedIn newsletter 
• Art of Supply on AOP
• Subscribe to This Week in Procurement

“The way we were running distribution, the processes we were using, it wasn’t a matter of, ‘Well, just incrementally improve what you’ve got.’ “We needed to rethink, take a step back and say, ‘Are we really set up the way we need to be set up?’” - Marcia Brey, VP of Logistics for GE Appliances (via the WSJ)

GE Appliances recently made news for a series of planned investments in their supply chain. As interesting as their efforts are today, they are the next step in an ongoing series of advancements and adjustments… and advancements and adjustments.

Now owned by Haier, a Shanghai-based company, GE Appliances has been on both sides of the outsourcing - reshoring divide. As they respond to macro conditions and competitive pressures, their supply chain is what connects production with customers, and the top line with the bottom, regardless of continual change. 

In this episode of the Art of Supply podcast, Kelly Barner addresses three key questions about their operation:

• Is GE Appliances really (successfully) reshoring manufacturing?
• How is the Department of Transportation’s FLOW program helping them manage potential supply chain disruptions?
• What role do metrics play in how they manage high stakes decisions about labor and inventory?

Links:

• Kelly Barner on LinkedIn
• Art of Supply LinkedIn newsletter 
• Art of Supply on AOP
• Subscribe to This Week in Procurement

Procurement and supply chain professionals rely upon competitive market dynamics. After all, competition drives innovation, cost savings, efficiency, and - profit.

Anything that changes the dynamics around the benefits associated with disclosed innovation has the potential to alter how companies invest, how much of that information they make public, and, ultimately, the value and diversity of solutions available to consumers of all kinds.

In this week’s episode of Art of Supply, Kelly Barner welcomes back Wen Xie. Wen is a Washington D.C-based patent attorney who is tuned into how changing policies and regulations alter the value proposition associated with the patent process, one that exists to benefit the general public in exchange for certain protections.

In this episode of the Art of Supply podcast, Kelly and Wen discuss:

• The basic premise behind the current U.S. patent system
• Pending changes to how the government gets involved in patents they invested to support
• How changes in cost and associated protections may affect how and when companies invest in patents

Links:

• Wen Xie on LinkedIn
• Guarding Private Incentive to Innovate featuring Patent Attorney Wen Xie
• Kelly Barner on LinkedIn
• Art of Supply LinkedIn newsletter 
• Art of Supply on AOP
• Subscribe to This Week in Procurement

“The trouble with most of us is that we would rather be ruined by praise than saved by criticism.” - Norman Vincent Peale

The Art of Supply podcast regularly covers topics that come with a bit of discomfort: allegations of child labor and greenwashing, the role of government regulations in bringing about change, and China, and absolutely anything to do with China.

It isn’t possible to talk about topics like these without getting feedback, and that feedback often takes the form of criticism.

In this episode, Kelly Barner takes a break from the usual coverage of news stories and expert interviews to talk about criticism, and how its inevitability shapes her content and makes it better.

Listen to this week’s episode of Art of Supply to hear about: 

• The Art of Supply content creation process 
• The differences between welcome criticism and the criticism we intentionally avoid
• Our philosophy on receiving criticism 
• And why covering these complex topics is so important that it is worth the risk 

Links:

• Kelly Barner on LinkedIn
• Art of Supply LinkedIn newsletter 
• Art of Supply on AOP
• Subscribe to This Week in Procurement

There are a lot of preconceived notions about the barriers preventing electrified road freight from becoming mainstream. It is seen as too difficult, expensive, complicated, inefficient, and more.

Most of those perceptions are based on the approaches to electrified trucking that have been tried so far. Perhaps by taking a different approach we can advance the transition away from diesel.

In this episode of Art of Supply, Kelly Barner speaks with Ian Rust, the Founder and CEO at Revoy, a company looking to make electric-powered freight transport possible and affordable at scale. Rather than doing a one-for-one trade from diesel-powered to electric, he recommends being more flexible, more innovative, and more creative.

Listen to their conversation to hear:

• Why we need to accept trucking as a foundational part of freight, and introduce changes with care
• The common objections Ian hears to the idea of electric trucking and his response to them
• Where and how regulations can support the transition from diesel to electric, and when private industry should be allowed to do what they do best

Links:

• Ian Rust on LinkedIn
• Kelly Barner on LinkedIn
• Art of Supply LinkedIn newsletter 
• Art of Supply on AOP
• Subscribe to This Week in Procurement

Companies and consumers regularly rely on product descriptions to decide whether or not to make a purchase and to determine the right price for that product. 

In the case of seafood, those descriptions and tiers create choices for consumers, but they also provide a built in incentive for fraud at scale. Any time someone is willing to pay a higher margin for a premium product, someone else is willing to turn that into an opportunity for profit.

The problem is so widespread, that estimates suggest between 20 and 40 percent of all seafood sold in the United States is mislabeled.

In this episode of the Art of Supply podcast, Kelly Barner covers some stinky problems in the seafood supply chain:

• The most common sources of fish fraud
• How technology is being used to combat widespread deception and ensure consumer safety
• Lessons from the seafood supply chain that we can apply in other industries 

Special thanks to Joseph Barner for his help in making this episode possible.

Links:

• Kelly Barner on LinkedIn
• Art of Supply LinkedIn newsletter 
• Art of Supply on AOP
• Subscribe to This Week in Procurement

“Every time I don't have a delivery truck stop in front of your house, 800 grams of CO2 is never created.” - Mike Robinson, Head of Retail Solutions and a Founding Member at The Eighth Notch (T8N)

The ecommerce boom of the last few years has led to new business models and consumer experiences, but it has also added to the number of packages being delivered each day. Does the number of packages correlate to the number of items ordered? No, it does not.

Placing an online order for 7 items of clothing from one company could result in 1 package, or 2, or 3, 4, 5, 6, or 7. More packages means more tracking for the consumer, more risk of porch pirates, more doorbell rings, more packages sitting out in the rain. It also increases the number of delivery trucks on our streets, the emissions from those trucks, and the amount of packing material.

In this episode of Art of Supply, Kelly Barner interviews someone who is willing to propose a solution.

Mike Robinson is Head of Retail Solutions and a Founding Member at The Eighth Notch (T8N). He has deep retail experience including time at Macy’s and as an advisor to The Gap. Now he is attacking the chaos of retail fulfillment. 

Listen to this episode to hear Mike explain:

• Why retail fulfillment is currently so fragmented
• The range of benefits associated with synchronizing the post-checkout customer experience
• Changes in thinking and customer conditioning that will need to take place before these benefits can be realized

Links:

• Mike Robinson on LinkedIn
• Kelly Barner on LinkedIn
• Art of Supply LinkedIn newsletter 
• Art of Supply on AOP
• Subscribe to This Week in Procurement

On June 26th, The Wall Street Journal reported that FedEx plans to spin off their freight division - and the most interesting part is why.

FedEx Freight is the less-than-truckload (LTL) division of the company. It is the most profitable division, with a recent operating margin over 20 percent, compared to 11.8 percent for FedEx Ground and 2 percent for FedEx Express.

The company has realized that the division is so successful it will generate more shareholder value on its own. With estimated valuations between $30 and 50 Billion, it is too big to be bought, but too small of a division of FedEx to stay. Pending an internal review scheduled to be complete later this year, FedEx Freight is likely to have a future as a standalone company.

In this episode of the Art of Supply podcast, Kelly Barner covers this story in the larger context of supply chain operations, investment, and profitability:

• Providing an overview of the current LTL landscape
• Comparing FedEx Freight’s performance with UPS Freight, which the company spun off in 2021
• Considering what this move may mean for the supply chain as a whole and for procurement professionals tasked with managing LTL spend

Links:

• FedEx Ground’s Contractor Woes
• Case Dismissed: Spencer Patton Prevails Over FedEx
• Reading FedEx Ground the RICO Act
• Kelly Barner on LinkedIn
• Art of Supply LinkedIn newsletter 
• Art of Supply on AOP
• Subscribe to This Week in Procurement

According to reporting in the New York Times, about 20 million containers travel through the ports of Los Angeles and Long Beach California annually. Those containers are full of goods that need to travel to warehouses, stores, and consumer homes by truck and rail.

Unfortunately, a growing percentage of those goods never arrive, thanks to a sharp uptick in cargo theft. As Supply Chain Brain has reported, U.S. cargo thefts were up 9 percent year-over-year in 2023, with an additional increase at the end of the year.

The increase in rail cargo theft has significantly impacted Union Pacific and their customers, leaving literal debris fields around their tracks in the Los Angeles area.

In this week’s episode of Art of Supply, Kelly Barner covers the complexity and loss stemming from rampant rail container theft:

• Why trains leaving Los Angeles and Long Beach are particular targets for theft
• How Union Pacific is (and is not) attempting to stem the losses
• Why divisions between public and private security are creating an opening that thieves are eager to exploit

Links:

• Kelly Barner on LinkedIn
• Art of Supply LinkedIn newsletter 
• Art of Supply on AOP
• Subscribe to This Week in Procurement

Section 321 of the U.S. Tariff Act of 1930 contains a small provision known as ‘de minimis.’

From a Latin phrase meaning “the law does not concern itself with trifles,” this provision has become a major concern for retailers, shippers, and regulators. 

De minimis is supposed to simplify shipping so that packages under $800 can be sent to U.S. consumers from overseas without distracting U.S. Customs and Border Patrol from their core mission. With the rise in global ecommerce, however, this provision - or loophole - is proving to be far more than a trifle’s worth of trouble.

In this episode of the Art of Supply podcast, Kelly Barner covers:

• The history of the de minimis provision, including how it was intended to be used and how it is being used today
• Two foreign-based retailers that are pumping hundreds of millions of packages a year into the U.S. under the provision - and a third major U.S. retailer that looks poised to join them
• Ongoing efforts to stem the tide and increase oversight, including which organizations are advocating for de minimis reform and which are against making changes

Links:

• Kelly Barner on LinkedIn
• Art of Supply LinkedIn newsletter 
• Art of Supply on AOP
• Subscribe to This Week in Procurement