Straight Forward Consulting

🎄 Inventory Management Lessons from the Christmas Tree Stand 🎄 Over the weekend, I was watering our Christmas tree using one of those funnel systems. My daughter was helping me by watching the water level in the stand. When the 'bobber' raised enough and we could see the red section, indicating too much water, she told me to stop filling the funnel. Here’s the problem: the funnel still had water in it, and so did the “conveyor belt” of water between the funnel and the tree stand. By the time the remaining water made its way through, we were dangerously close to overflow. It was a near-miss, but it reminded me of a valuable inventory lesson. (Yes, I am a dork, and I can't always 'turn it off' when I see these supply chains lessons in real life!). Here are the lessons- 👉 What you see isn't always the whole picture. Just like my daughter only saw the water already in the tree stand, in supply chain, we often focus on the inventory visible in our immediate systems (on-hand stock). We don't think about the 'upstream' inventory...the inventory "in the pipeline" (orders in transit, production in process) that needs to be accounted for to avoid overstocking—or in this case, flooding. 👉 Communication and timing are critical. The delay in my daughter's signal and the water still flowing into the funnel was a reminder of how small misalignments in information or timing can lead to big consequences. In inventory management, clear signals and accurate data are essential to prevent overfilling or stockouts. This simple experience with a Christmas tree funnel turned into a great reminder about the complexities of inventory flow—and the importance of seeing the bigger picture. (Sadly, I don't think my daughter was interested in the lesson!) Has anyone else had a holiday moment that made you think about work lessons? I'd love to hear them! #SupplyChain #InventoryManagement #HolidayLessons #EverydayLean

🚚 Transportation Tuesday: The Aftermath of Yellow Corp. – Terminal Sales in Motion 🚚 The collapse of Yellow Corp. continues to reshape the LTL (Less-Than-Truckload) landscape. Recent court filings reveal that the 4th ranked US carrier Estes and #5 R+L Carriers are stepping up with combined offers of $192.5 million for Yellow’s real estate. Here’s the breakdown: 🔹 Estes is acquiring 11 properties for $142.5M, including: Major owned terminals in Cincinnati (216 doors), Chattanooga (198 doors), Tracy, CA (167 doors), and Hagerstown, MD (136 doors). Leased sites like Miami (117 doors) and Orange, CA (95 doors). 🔹 R+L Carriers has a deal for a massive 304-door terminal in Maybrook, NY for $50M. Why does this matter? 1️⃣ Capacity Shift – Key real estate assets are being snapped up, signaling changes in LTL network density and competitiveness. 2️⃣ Market Realignment – Regional powerhouses like Estes and R+L Carriers are solidifying their positions, potentially impacting rates and service for shippers. 3️⃣ Fallout Costs – Sale proceeds will help address Yellow’s $7.5B+ in claims, including pensions, backpay, and creditor liabilities. 📅 With bids for remaining terminals due January 6, expect more action as LTL players position for growth. What does this mean for shippers and carriers? Clearly Estes and R&L are moving to strengthen their already strong position. Are we entering a more consolidated LTL market? Let’s hear your thoughts below. #TransportationTuesday #SupplyChain #LTL #Logistics #YellowCorp #Freight

November Manufacturing Report: A Step Forward, But Challenges Remain The latest ISM® Manufacturing Report shows some signs of life, but it’s clear the road ahead is still bumpy. Manufacturing PMI® ticked up to 48.4%, but we’re still in contraction. New Orders Index nudged into expansion at 50.4% after seven months of decline—good news, but just barely. Supplier deliveries and inventories are improving, but demand and output remain sluggish. This ties back to what I’ve said before: the key isn’t just riding out the storm—it’s about using the time to get better. Lean operations, smarter inventory management (not just “more space”), and tighter supplier relationships will define who’s positioned for success when demand rebounds. (Some of my smartest clients used the recession of 2008 to build bandwidth and improve processes, so when the economy did bounce back, they were ready for it. I thought that was a brilliant move.) Another point to consider: the election cycle is over, and now’s the time to leverage the clarity that brings. I think many companies will get off the sidelines and get back to work. A renewed focus on aligning supply chain models (push vs. pull) with the realities of your business can create real margin opportunities. Recovery isn’t here yet, but the moves we make now will dictate how ready we are when it arrives. What are you seeing in your business? #Manufacturing #SupplyChain #Lean #EconomicUpdate #BusinessResilience

As predicted for the past few years, the U.S. warehouse market is seeing significant changes as we close out 2024. Vacancy rates have climbed to 7.2% (November 2024), a jump from 4.8% in 2023 and the historic low of 3.4% at the end of 2021. This shift reflects the convergence of two key factors: the surge in new capacity coming online, and the realization that inventories needed to be reduced across the supply chain. A Quick Look Back since the pandemic: 📦 2021: Record low vacancy (3.4%) fueled by pandemic e-commerce growth. 📦 2022: The 'push' supply chain effect- it was slow to react to softening demand, so new supply outpaced demand, pushing vacancy to 4.2%. 📦 2023: Continued oversupply led to a 4.8% average vacancy. Why Are Vacancies Rising? 1️⃣ High New Supply: Warehouse companies started planning their expansions during the craziness of 2020's economic boom. Unfortunately, it takes years for this new capacity to come online. Over 310M square feet of warehouse space was added in 2023 alone. 2️⃣ Softening Demand: The new capacity came online at a time of economic uncertainties and right when manufacturers and distributors realized they needed to adopt leaner inventory strategies. What Does This Mean for 2025? 🔹 Lower Rents? Rising vacancies may drive landlords to offer better terms. 🔹 Slowdown in Construction: Higher interest rates and oversupply are likely to temper new builds. 🔹 Increased Automation: Businesses will invest in efficiency to offset costs and labor challenges. The warehousing landscape is evolving, but with change comes opportunity. Now is the time for companies to refine strategies, optimize space, and prepare for what’s next. Did you see this shift coming? What trends are you watching in the warehouse market for 2025? Share your thoughts below! #Warehousing #SupplyChain #Logistics #WarehouseTrends #WarehouseWednesday #SupplyChain #Logistics #Buffalo

FROM CAR HAULING TO AN LTL CARRIER. A GOOD MOVE OR A RISKY MOVE? Jack Cooper, a prominent car hauler, is nearing entry into the less-than-truckload (LTL) sector by potentially acquiring Standard Forwarding, a regional (Illinois) LTL carrier. A tentative five-year labor agreement with the Teamsters union, covering over 350 drivers, includes a 26% wage increase, enhanced overtime, an additional paid holiday, and increased sick time. Got me thinking a bit deeper about this potential move- Opportunities: Market Expansion: Diversifying into the LTL market could open new revenue streams for Jack Cooper. Job Preservation: The acquisition may safeguard hundreds of union jobs, maintaining labor stability. Challenges: Financial Health: Jack Cooper's 2019 bankruptcy restructuring raises concerns about its capacity to integrate and sustain new operations. Standard Forwarding's Viability: Reports suggest Standard Forwarding faced struggles prior to acquisition talks, potentially complicating the transition. Things to think about: How might Jack Cooper's entry impact the LTL market landscape? What strategies should be employed to ensure a smooth integration of Standard Forwarding's operations? Or do they integrate at all? I'd love to hear your thoughts on this! #TransportationTuesday #SupplyChain #Logistics #LTL #Buffalo

I AM GRATEFUL This Thanksgiving, I want to take a moment to express my gratitude to my clients, partners, and friends. Your trust, collaboration, and support have made this year incredibly rewarding. I’m thankful for the opportunities to work alongside you and for the connections that continue to inspire and drive success. Wishing you and your families a joyful and blessed Thanksgiving! Let’s keep building stronger partnerships and brighter futures together. #Thanksgiving #Gratitude #ThankYou

Should we even use the term “Black Friday” anymore? It used to mean a single-day frenzy, when retailers can finally go into the black, but now it’s stretched into a week—or more—of deals. I remember so many people heading out into the snowy night after a Thanksgiving meal, or people getting up at 3 or 4 am to go shopping. Thankfully, we don’t have to do that anymore. Since “Black Friday” has leaked into a whole week, or more, it’s easier for us consumers, but it is easier for warehouses and fulfillment centers? Not exactly. Consider these changes that these operations need to now enact: - Extended Peak Periods: Instead of gearing up for one intense day, warehouses now operate at near-peak levels for weeks. This requires sustained labor, leading to higher costs and greater employee fatigue. - Inventory Congestion: Promotional inventory arrives earlier and stays longer. This ties up valuable storage space, making it harder to accommodate new stock or regular replenishments. - Increased Order Complexity: With extended sales come varying promotions, leading to more SKUs needing rapid picking and packing. This complexity can strain accuracy and throughput. - Labor Challenges: Warehouses need to scale staffing for longer periods, which is harder to manage without overworking employees or over-hiring for a temporary peak. - Pressure on Automation: Facilities relying on automation must ensure systems can handle sustained demand. Maintenance downtime becomes a critical risk during these extended peaks. How can retailers optimize their operations with these new changes? • Dynamic Slotting: Prioritizing high-turn SKUs near packing stations. • Cross-Docking: Reducing storage needs by moving inventory directly to outbound shipping. • Flexible Labor Models: Balancing full-time staff with seasonal or gig workers to meet demand efficiently. The shift to an extended Black Friday may reduce some chaos for customers, but for warehouses, it’s a marathon that requires agility, planning, and innovation. It’s like a mini-season unto itself. How are your warehouses handling the new Black Friday reality? Let’s talk solutions in the comments! 🚛📈 #WarehouseWednesday #BlackFriday #SupplyChain #ECommerce #logistics

UPS GETS CAUGHT OVERVALUING ITS LTL BUSINESS The SEC recently fined UPS $45 million for failing to accurately evaluate the value of its UPS Freight unit before selling it to TFI International in 2021. Despite an internal 2019 review estimating the unit’s value at $650 million, UPS relied on a consultant who valued the business at $2 billion—150% more than TFI ultimately paid ($800 million). This inflated valuation allowed UPS to avoid a $500 million writedown on goodwill, a balance sheet item often criticized for being subjective. Goodwill, representing intangible assets like reputation, is notoriously hard to measure and can obscure a company’s true financial health when mismanaged. I am not an accountant, but it was always difficult for me to get my head around trying to evaluate goodwill. It's too squishy, in my book. The SEC found that UPS not only withheld critical details from the consultant but also ignored Generally Accepted Accounting Principles (GAAP) that should have flagged the goodwill as impaired. The result? Misleading financial statements and a hefty penalty. UNANSWERED QUESTIONS What safeguards should be in place to prevent missteps in asset valuations? Is goodwill too subjective to play such a significant role in financial reporting? How should companies balance consultant insights with internal analysis for compliance and accuracy? How did TFI not uncover these issues during its due diligence process before the acquisition? Your thoughts? Let’s discuss! #TransportationTuesday #Supplychain #logistics

Don't Run Your Thanksgiving Kitchen Like a Bottlenecked Production Line! A week from today, many Americans will sit down to enjoy a traditional Thanksgiving meal, followed by some football. This year, the football lineup is... less than stellar, so maybe that tryptophan will do its thing and help you nap through the Dallas-Giants game. But back to the turkey... Ever notice how your mom always seemed to have Thanksgiving under control? The turkey was perfectly golden, the gravy hot, with no lumps, the mashed potatoes nice and firm (my kids still rib me about the year I made 'mashed potato soup'), the sides ready and piping hot, and somehow, the rolls came out of the oven right on time. Those days feel like a distant memory now. Nowadays, hosting feels like chaos in the kitchen. The turkey’s taking longer than expected, the green bean casserole is lukewarm, and—wait—the mashed potatoes need reheating again. It’s like we just can’t nail the timing. Some people have a second oven tucked away in the basement, but is that really the best solution? Adding more “capacity” might help in the short term, but lean thinkers know the real issue isn’t the lack of ovens—it’s the bottlenecks! It’s all about improving flow: minimizing constraints, better timing, smarter sequencing, and eliminating inefficiencies. Just like in manufacturing, the key is identifying the pinch points and planning around them. You can only fit so much in the oven at once! Prep cold dishes the day before (assuming your refrigerator isn’t your bottleneck!). Cook oven-based sides while the turkey rests (or cook them in advance, and simply warm them up while it rests). And don’t forget the power of delegation—sometimes the simplest solutions, like assigning a dish to a guest, can be the most effective. Thanksgiving dinner might seem small in the grand scheme of things, but the lessons apply everywhere—from the kitchen to the production floor. The secret isn’t more ovens—it’s better flow. How do you manage bottlenecks, in the kitchen or at work?

Purchase Price is a Horrible Procurement Metric! I still encounter far too many procurement professionals who rely on purchase price or purchase price variance as their primary metric for success. It's a narrow and incomplete measure that doesn’t tell the full story. Here’s why: 🔍 Purchase price and purchase price variance ignore critical factors like transportation costs and inventory impacts. Instead, we should focus on Total Cost of Ownership (TCO). TCO combines the purchase price with transportation and other incremental costs, providing a clearer view of the actual cost. 🔢 Every business should also develop and publish its unique cost of inventory metric. This isn't just the cost of money. It includes: Opportunity costs of tied-up capital Storage costs Additional transportation or handling needs Obsolescence risks When I shared this with a VP of Procurement, he asked, “Why isn’t it just the cost of money?” Simple: inventory costs go far beyond interest rates. 🎯 The takeaway: If your team is measuring success with simplistic metrics like purchase price or PPV, it’s time to level up. Start tracking TCO and your unique cost of inventory to make smarter, more strategic decisions. What metrics are you using to elevate procurement performance? Let me know in the comments!