East Coast railroads, transit agencies gear up for blizzard

With winter storm Jonas expected to pummel the East Coast this weekend, several railroads and transit agencies have announced preparation plans and service modifications.

The announcements come as at least four states have declared states of emergency in light of the potentially crippling snowfall.

The Washington Metropolitan Area Transit Authority (WMATA), for example, will suspend all rail service starting at 11 p.m. today. The agency’s rail operations will remain offline until Sunday, WMATA officials said in a press release.

In the meantime, WMATA will protect hundreds of rail cars by storing them in tunnels during the storm, they added.

As much as 30 inches of snow could fall on Washington, D.C., which is slated to be the “bulls-eye” of the blizzard, The Washington Post reported.

“This is not a storm that anyone should take lightly, and I would urge all residents to plan to get to a safe place before the storm arrives Friday afternoon,” said WMATA General Manager and Chief Executive Officer Paul Wiedefeld. “The actions we are taking today are all in the interest of our customers’ and employees’ safety, and will help us return to service once the storm passes and the snow is cleared.”

Meanwhile, the Virginia Railway Express (VRE) is running only “S” trains today. The agency is monitoring the weather with its host railroads, the National Weather Service and the Virginia Department of Transportation, VRE officials said in a weather advisory update.

While most of Amtrak‘s Northeast Corridor service will operate as scheduled today, several routes will be cancelled or modified tomorrow and on Sunday.

MTA New York City Transit (NYCT) also is preparing for potential snowfall. The agency will activate the incident command center in its subway system and place personnel to communicate with outlying local storm fighting centers. Additionally, NYCT will use a tool for tracking field reports on snow removal and station conditions, as well as a database of essential resources such as salt, sand, and generators to enable better collaboration and response time.

Although NYCT staff will be ready to drop salt and clear platforms and stairs of snow, the agency urged customers to “use extreme caution while navigation the system,” agency officials said.

Furthermore, NYCT has added more third rail heaters and snow melting equipment at critical points throughout its system, agency officials said. Currently, the agency has more than 1,000 remote-controlled third-rail heaters, as well as 494 manual ones.

On the freight side, Norfolk Southern Railway yesterday released a service alert informing customers that there could be delays of 24 to 48 hours on traffic moving through the Southeast, Mid-Atlantic and Northeast regions.

The Hipster Hardware Store That Has Home Depot Scared

Jason Ballard remembers the time some guys from Home Depot came poking around in TreeHouse, his eco-conscious home-improvement store in a strip mall in southwest Austin. They were wearing suits and trying to act nonchalant, a ruse undercut by their questions to Ballard’s employees. How much of this does the business keep in inventory? How much of that did it sell last week?

“So I marched up and said, ‘Hey, I’m Jason! How can I help you?'” Ballard recalls. With a little small talk, he got them to say they were in town from Atlanta. Then he asked where they worked. They admitted they’d come from the big-box home-improvement giant. Ballard wished them well and cautioned his employees to say nothing more.

A wafer-thin 33-year-old with a deep East Texas drawl and boyish grin, Ballard doesn’t look like a threat to Home Depot. So far, TreeHouse has only the one location. It is on track to do about $10 million in sales this year, compared with Home Depot’s $83 billion.

But many of the most innovative brands in smart-home technology and sustainable design have embraced TreeHouse in a big way. TreeHouse is reportedly the largest single retailer of Nest products, for instance. It was among the first retail partners and is by far the largest of the much-admired Kentucky company Big Ass Fans. Perhaps most impressive, TreeHouse will be Tesla’s sole retail partner for the launch of that company’s highly anticipated Power Wall home battery.

TreeHouse’s biggest investor, Container Store co-founder (and fellow Texan) Garrett Boone, is fond of telling Ballard, “If TreeHouse doesn’t end up working, there is no truth in the universe.”

Boone, Tesla, and TreeHouse’s other fans like its earth-friendly mission: The bourgeois-bohemian goal of creating a Whole Foods for the DIY set. They are also impressed by an innovative approach that turns the superstore model inside out. Instead of a huge, warehouse-like facility with a vast product assortment, the company operates in a highly curated showroom with lots of space for consumer education, collaborative planning, and project-management. It’s less do-it-yourself than let’s-do-it-together. And TreeHouse’s prices are increasingly competitive with the big-box guys.

Like some of the disruptive brands it carries, TreeHouse harbors world-changing ambitions. Austin, with its wealthy neighborhoods and progressive politics, is a natural origin city for the business. But it is just ground zero for what Ballard envisions as a much larger company. “We will either be a multibillion-dollar business or we will go bankrupt,”he says. “Just like Tesla is not looking to be a boutique car company, we don’t want to be niche. This should become the new normal.”

Advice from a bishop.

Ballard, who grew up “behind the pine curtain” in deep East Texas bayou country, is the first to admit that his business philosophy is built on idealism and naiveté. It is those traits, he says, that have made him successful so far, despite long odds and high hurdles.

Ballard’s family comes from “the kind of poverty most Americans don’t know exists,” he says. “There are lots of people in my family who, part of their regular dinner involves possum and raccoons.” The biggest influence on Ballard growing up was his grandfather (“Paw-Paw”), a lifelong oil-refinery worker. Paw Paw lives simply —
“like Moses,” Ballard says. A kind of default conservationist, Paw-Paw has electricity and running water but otherwise lives largely off the land.

The first in his family to attend college, Ballard studied biology and ecology at Texas A&M. After graduating, he became preoccupied with the wastefulness of standard building practices. Homes in the United States are responsible for more energy and water consumption, landfill waste, and human exposure to toxins than almost any other source. With no idea what to do about the issue, Ballard started working construction for sustainable builders in Colorado — just “swinging a hammer,” as he puts it. He thought about becoming a builder. Then another possibility presented itself.

“Everyone I worked for had the same problem,” says Ballard. “There was no one-stop marketplace for everything you need. It took a lot of time and diligence to find a good product. And then it would arrive and the color on the wall would look different than it had on a computer screen.” In addition, buying sustainable materials was expensive because builders often buy for one project at a time.

Ballard lacked formal business training or experience. But he saw the solution clear as day. Why not start a company that does a ton of product research, sources the materials, buys them at sufficient scale to bring down prices, and educates homeowners and builders?

He sent his idea to a close college buddy, Evan Loomis, who had worked on Wall Street. Loomis ran it past some colleagues, and they deemed it a no-brainer. If Ballard didn’t do it, someone would. Loomis quit his job, signed on as a co-founder of TreeHouse, and set out to raise money for the launch.

This was 2009, and the home-building industry was in shambles. It took more than two years to get traction; several times they almost gave up. Ballard seriously considered going to seminary and becoming an Episcopal priest. But when he consulted his bishop, the bishop told him to finish what he’d started. “Jason, it may well be that TreeHouse is your calling, and I want you to be open to that,” the bishop said.

Investors told Ballard and Loomis repeatedly that they didn’t want to back two twentysomething upstarts with no experience in the industry. Eventually, the pair recruited a pair of industry veterans — formerly of Home Depot — to become co-founders as well.

Treehouse finally opened in late 2011 with Ballard as a vice president and Loomis as CEO. It promptly missed all of its sales targets. From there, things got worse. Ballard’s wife was diagnosed with cancer and his daughter with epilepsy. Then the board let all the co-founders go, including Loomis, and installed Ballard as the new CEO. As Ballard turned 30, his entrepreneurial dream and his family’s health were failing. On the line to save his business, he turned to his faith. “It helped me keep fear under control,” Ballard says. “I just knew that, even if the worst happens, in the ultimate sense I was going to be OK. That allowed me to make some decisions that were very unorthodox.”

Bye-bye hammers. Hello Nest.

The original strategy, honed with the help of Ballard’s more experienced co-founders, was to be a kind of green Home Depot or Lowe’s, with long aisles of light bulbs and hammers and power tools stocked deep on tall metal shelving units. But “there was too much Home Depot influence in the beginning,” says Boone. The industry veterans on the team “were great guys, but we need to be a totally different kind of store.”

Boone, who is TreeHouse’s chairman, says it was Ballard’s vision that turned around the company. Rather than organizing the store around types of equipment, Ballard split TreeHouse into three “lands” based on performance, design, and the outdoors. Performance includes things like smart-home technology and solar power; design comprises flooring and paint; and outdoors is everything from organic fertilizers to rainwater barrels.

More important, most of the tall shelving is gone. The TreeHouse experience is now less about wandering the aisles looking for that one thing you need and more about discovering new things by interacting with the staff and products. Borrowing a page from the next-gen menswear company Bonobos, TreeHouse mostly avoids inventory in the store. It keeps only the bare minimum on hand: small items like light bulbs that customers need immediately. Everything else ships from the supplier. That frees up room for spacious product displays and explanatory placards, tables, and chairs for design or project-management consultations, and lots of natural light.

Emily Tanczyn, Big Ass Fans’ vice president of residential sales and marketing, explains that her company traditionally has relied on direct-to-consumer sales because it allows the kind of close contact with customers that ensures a deep understanding of the products. TreeHouse, she says, comes as close as it gets to replicating that relationship through a third party. As a result, “they sell tenfold what we find with other partners,” she says.

“Jason has this wonderful ability to simplify complex buying decisions for customers,” says Boone. “That’s the biggest barrier to buying home solutions.” He points to solar panels as an example. When TreeHouse opened, solar panels were stocked on a shelf in the traditional style. Customers failed to notice them or relied on installers to find the right products. Ballard switched things up, including in-store consultation and home installation in the price of the panels, plus simple financing and help with permitting. Now customers see not an intimidating product but a smart, simple way to save money. “He made it as easy as buying a refrigerator,” says Boone.

Another big change was product mix. Ballard dropped most of the basic tools and hardware — the hammers and nails — and focused on curating his ideal assortment of energy-saving, resource-conserving, and toxin-reducing products. Nest, the Bay Area maker of smart-home devices like intelligent thermostats and smoke detectors, was exactly the kind of brand TreeHouse should carry. But Nest — started by an Apple veteran and now owned by Google — worked with just four retail partners: Apple, Amazon, Best Buy, and Lowe’s. It wouldn’t even return Ballard’s calls.

Relishing the challenge, Ballard put a recurring notice on his calendar to call Nest the second Tuesday of every month at 9 a.m. After more than a year of rejection, he sent employees to buy Nest products at chain stores and document their experiences. Most of the chains’ salespeople knew almost nothing about the product or why it was worth $249. Ballard sent Nest a Power Point documenting those results and closed with a proposal for how his store would do it differently: He would work with Nest to tell the company’s story in full, provide project management to demystify the installation process, and turn TreeHouse into Nest’s largest volume retailer. Within a year, he had done just that. This success led to the Tesla relationship and others. Overall, store sales have grown an average of more than 40 percent a year since Ballard took charge.

Huge is the only option.

Ballard points out that his early options — to start TreeHouse or go to seminary — were more alike than one might think. Both were about doing good for people. And both were somehow “transcendent.”

“We just have got to find a way to shelter ourselves without permanently harming the world around us and ourselves,” Ballard says. “It’s an existential problem.” Ballard likes to say he doesn’t have a business but a goal. Building a business happened to be the best way to achieve that goal.

But a single-store, lifestyle business is not enough. To achieve a goal so ambitious, Ballard needs TreeHouse to be huge. Over the summer he raised $16 million in a second round of funding, led again by Boone. “We avoided venture capitalists altogether,” Ballard says. “I was very honest. I told people that if they needed their money back in three years, they should not invest. I said, ‘You are investing in a company whose CEO is more interested in achieving his goals than getting a quick exit for investors.'”

The money will fund the launch of at least two more stores in the next two years, in Texas and elsewhere in the West. To grow even faster, the company is considering hiring project managers in other cities, establishing networks of installers, and building a digital home-improvement platform.

Ballard is determined to avoid a Whole Foods-like reputation for high prices. That won’t be easy. Green products are often more expensive than traditional ones. And even when TreeHouse sells the same products as big-box chains, it can’t command the same prices from suppliers because its volume is so much lower. To compete, Ballard has opted to take slimmer margins, making up some of the difference by launching smaller stores, which his lean inventory model makes possible. Still, retrofitting a home tends to involve big projects, and that favors customers with means. An affluent clientele undercuts TreeHouse’s mission to be a store for everyone. The work continues.

TreeHouse is also “developing relationships with manufacturers and convincing them the only way we can all establish higher volumes is by being price-competitive,” says Boone. He points to Ballard’s doggedness with Nest as evidence of his effectiveness in such negotiations. “He’s incredibly persistent and fearless,”says Boone. “He’ll call anyone. He’ll call the president if he has to.”

While TreeHouse may still take a wrong turn or simply fail to meet its own expectations, Ballard has settled comfortably into the driver’s seat. His wife has been cancer-free for four years. She works in the store most days with her husband. And their daughter no longer has seizures.

TreeHouse’s original inspiration, Paw-Paw, has yet to visit the store. Austin is too long a drive for someone his age, he says. But Ballard recently learned that the 82-year-old widower has been traveling three hours to see a new girlfriend. “I’m proud of him,” Ballard says. “But I said, ‘If you can drive to see a woman, you need to get your butt in a car and come see TreeHouse before you die.'”

End-to-End Supply Chain Visibility

Organizations are continuously expanding their footprint regionally and globally, making the supply chain professional’s life challenging. This continuous change is tied to an organizations desire to explore low cost production centers and reduce overall costs by placing warehouses and assembling units closer to their customers in order to meet the demand of being faster to market. This activity has resulted in an increase of volume of cross border transactions which makes an organization’s international supply chain more complex.

In a complex global supply chain, organizations are required to work with various parties within and outside the organization in order to meet the customer demands, and yet reduce costs. Having end-to-end Supply Chain Visibility becomes imperative for an organization’s success in meeting these objectives.

The Strategic Road map for Supply Chain Visibility research conducted by Gartne describes the current state of maturity as it relates to visibility, as follows

“Most supply chain organizations are at Stage 2 or 3 of supply chain maturity, and thus have an inside-out view of supply chain plans, events and data. Their current visibility capabilities are most likely departmental or functional and focus separately on data and processes for planning and execution.”

SupplyChainVisibilityStages

So, let’s take a look at the reasons why Supply Chain Visibility is so critical for Organizations.

  1. Customer Satisfaction: A demand driven market where customers are looking for a faster response rate requires organizations to improve their supply chain visibility in order to meet the customer and market requirements. Aberdeen research stated that 65% of companies bypass their own distribution centers and ship directly to stores in order to be faster to the market while meeting their customers’ expectations in satisfaction. In our current digital era, consumers expect the right product at the right price in the right place at the right time with the right quality. Visibility allows an organization to pre-emptively act on disruptions in the supply chain, by identifying any potential disruptions in advance and taking immediate actions. So in essence, Supply Chain Visibility is needed for organizations to monitor the flow of finished goods to make it available for consumers.
  1. Inventory Management: Organizations that manufacture are exploring options to keep their inventories low to improve the working capital. The “Just-in Time” (JIT) manufacturing concept has enabled organizations to keep inventory at a lower level to keep their production running and reduce their inventory costs, resulting in better working capital. Achieving the JIT concept provides organizations with opportunities in designing reliable supply chain processes to better support their customers and meet their bottom line finances for their supply chain. Supply Chain Visibility helps the manufacturer achieve the objective of fewer inventories and still meet market needs. It also provides up-to date information on the status and availability of materials and products. Per the Gartner’s survey, companies having end-to-end Supply Chain Visibility results in inventory savings of 20% of value and a decrease of inventory on stock from just over 10 days to fewer than 7 days.
  1. Supply Chain Costs: Supply chain processes in organizations require maintaining transparency of ongoing processes from the customer order, shipment planning, container booking, current location of the container, etc. Visibility to this kind of information is needed for better planning of the supply chain process and tracking costs such as:
    1. Cost of Freight and Transport
    2. Cost of Clearance
    3. Detention and Demurrage charges
    4. Advance payments

All of these elements are critical in order to have a complete control on the finances and take necessary actions to avoid any financial leakage such as duplicate charges by service providers, not utilizing complete container space in the movement of goods, and controls around free detention periods. To better control finances in the supply chain, by having historical information on these costs, with all relevant data, an organization can effectively plan and implement better controls over freight negotiations and service levels. According to Gartner’s survey, end-to-end Supply Chain Visibility helps organizations in reducing their Freight Charges from 5% to 3.5% of volume and 10% through a reduction in workforce.

  1. Risk Management: Supply chain risks generally fall into two categories: Compliance and Operations. An example of a compliance risk can be a late filing of an import or export transaction resulting in a late declaration to the government. An operations risk can occur when there is a lack of coordination between departments resulting in delayed goods arrival to a warehouse. To address both of these risks, an organizations supply chain processes should possess a complete transparent system which enables the flow of consistent, reliable, complete and validated data all through the supply chain process. Supply Chain Visibility provides complete transparency in the supply chain process and alerts the company to take the necessary mitigation steps to avoid risks in a timely manner.

The need for Supply Chain Visibility is quiet strongly felt among supply chain professionals, with the primary reasons for lack of visibility as:

  1. Fragmented Supply Chain Functions: Organizations going global means materials move across geographies before it reaches the customer as a final product. When several internal departments and external functions operate in isolation, this makes it more complex to achieve complete visibility of the supply chain. Per the Aberdeen Report on Supply Chain Visibility, 44% of companies responded that their biggest struggle is to synchronize and integrate data across various management systems and internal groups.
  1. Lack of Systems to provide Supply Chain Visibility: With multiple functions involved in the flow of goods, the systems and processes developed are largely to address the requirements of respective functions. The system limitation does not help organizations in achieving end-to-end Supply Chain Visibility to collaborate between functions.