Interview with Dan DiMaggio
ASCET:
What are some of the biggest technological challenges facing supply chain managers
right now?
DiMaggio: In order to truly optimize a supply chain, you've got to ensure both visibility and collaboration with both suppliers and customers — both of which are dependent on technology. And there is still a lot of work to be done in those areas, from a systems perspective and an operations standpoint. Although visibility of goods along the supply chain is continuing to improve, I think 100 percent real-time visibility is still the exception rather than the rule, primarily because of the diversity of trading partners involved.
With so many different supply chain partners using their own legacy systems, getting those systems synched up to communicate with each other is a huge obstacle. And it's an obstacle often made even more difficult by a culture of resistance to sharing information with business partners. Collaboration comes when all parties view sharing as a win-win situation.
ASCET: How does UPS plan to stay ahead of the technology curve?
DiMaggio: Technology is an extremely critical piece of the puzzle for UPS going forward. Our organization invests very heavily in technology every year. It's especially crucial for our supply chain solutions, where advanced technology is key to a truly integrated solution. In order to offer our customers optimized supply chains, we've got to have the technology to connect trading partners.
We've traditionally relied on a combination of both custom-developed and best-of-breed applications to diversify and round out our technology offering. Our customers look to us to stay ahead of the curve so that their supply chain performance continues to improve.
ASCET: Looking forward, what factors do you believe will set apart the true leaders in third-party supply chain management?
DiMaggio: If you look at this industry up to now, you've seen a real melting pot with a lot of providers of varying sizes and many different niche players. We believe that going forward, the emergent leaders will be those companies that can provide a truly integrated, end-to-end solution. That means being able to handle any size shipment, any order, anywhere in the world. It means overseeing all three lines of global commerce: goods, information and the funds attached to those.
Companies need to look at supply chain management strategically, focusing not just on cost-cutting, but financial matrices like cash-to-cash ratios, asset utilization, and cash flow. We're focusing on the overall picture with UPS Supply Chain Solutions.
ASCET: And that brings up a good point. The "UPS Supply Chain Solutions" name is new, so does it represent a departure from what UPS has been doing in the supply chain arena?
DiMaggio: It's not a departure, but really more of a next step. UPS has been aggressively growing its supply chain management offering — both organically and through acquisitions — over the past 10 years. Among others, we've added service parts logistics companies, a freight forwarder, customs brokerage companies, mail service companies, and a bank. Before the creation of UPS Supply Chain Solutions, these were operating independently to provide supply chain services.
UPS Supply Chain Solutions unifies the expertise that's required to build a
comprehensive solution of logistics, global freight, financial services, consulting,
and mail services — all under one roof. And it more accurately highlights
what we feel is really an unmatched portfolio of supply chain services for UPS,
whether you are moving goods, information, or funds.
