2010 Exit Strategy

MH&L’s Editorial Advisory Board says the challenges and opportunities of the New Year will come from education, industry and government.

If the people on the MH&L Editorial Advisory Board ruled the world, 2011 wouldn’t be such a worry. Technology would be used appropriately to produce information that would help well educated and trained people predict and manage change in all sectors of the economy. And the lion would lay down with the lamb.

That last part probably has a better chance of happening than the first part—but only because people are even less predictable than animals. Nevertheless, 2011 would have a far better chance of being a happy new year if the people in power at schools, universities, and all levels of government and industry collaborated on the flow of commerce. Since that’s not likely to happen of its own accord, we at MH&L thought we'd act as the catalyst by aiming the combined wisdom of our board members at those drivers of commerce and see if we can hit a nerve. Again, those drivers, as we see it, are education, industry and government.

Education

It starts at home. People need a head start at absorbing knowledge and it begins when parents introduce their children to the work ethic. Only with that grounding can the lessons from entry-level jobs be carried forward into a career of any sort.

“An enduring challenge for the next decade will be finding good entry-level employees,” says Marine Corps Logistics Specialist Alan Will. “Those are people who show up promptly at the start of the day, every day of the week. They have a sense of responsibility for the company team, are active participants on the team and can communicate clearly with team members—and that includes listening. Some companies, however, have to invest in remedial training of their personnel. These basic personal skills should be a given in anyone entering the workforce.”

Even upon entering the halls of academia students tend to have unfocused and unrealistic goals. The solutions to the problems of 2011 and beyond can only come from people with a real knowledge of what those problems are and what they can contribute in the effort to solve them.

In recent years logistics’ art and science have been applied to deal with the aftermath of a wide variety of natural and man-made disasters, but it is still a largely “behind-the-scenes” discipline. It would seem an obvious vocation for undergraduates looking for a way to solve the world’s big problems and save it from itself. But according to University of Arkansas Professor Russ Meller, his challenge is spreading the word about the availability of logistics as a career.

“It is a challenge for those of us in industrial engineering and logistics to reach out to these students about efficiency, savings, etc., in our traditional means,” Meller continues. “Making the connection between logistics and sustainability and improving lives is critical, but we have trouble attracting them to logistics if we don’t tell them that logistics has a big impact on saving the world.”

And when we don’t attract U.S. undergrads to grad school to support their country’s research mission, we backfill with international Ph.D. students, many of whom come with the goal of becoming a professor. But Meller feels there are too many Ph.D. students pursuing academic careers and not enough jobs out there to absorb them.

There is not, at least in industrial engineering, a sufficiently large market for Ph.D. students in U.S. industry, either. Many who are marketable come from other countries and tend to take their new skills back to their homelands.

“I don’t know how it will happen, but I believe some change to the research and immigration systems would be beneficial,” Meller concludes.

Industry

Just as the solutions to social ills begin in the home, the solution to the world’s logistics ills begins in a company. But many companies don’t realize the problem-solving potential that lies within all the data they house. That’s why society needs well-educated logisticians with a real-world grounding.

“Even today there remain prominent Fortune 500 companies where supply chain decisions are made without the benefit of a full utilization of the firm’s network data,” says Rider University’s Tan Miller. “It is critical that within an operations group, there exist at least a small core group of network analysts and managers who can slice and dice any aspect of the firm’s operations within a moment’s notice. When a firm’s operational functions have this core expertise, its operations management will be able to make the best possible decisions in a timely manner based on the maximum available decision support.”

Miller believes some firms depend too heavily on canned IT and ERP reporting to do the kind of heavy lifting that can only be done by well educated and trained logistics professionals. The problem is that these firms don’t want to entrust too many employees with this precious data.

“They fear that non-IT operations users may degrade the response time of data warehouses through inefficient querying methods,” Miller explains. “The bottom line is that there remain many supply chain and logistics operations whose decision-making (and speed of fact-based decision-making) could be significantly improved through enhanced investment in decision support capabilities.”

But even when the corporate culture makes the leap of faith in the technology and talent needed to understand their supply chain, the talent often rises quickly and moves elsewhere. Without a succession plan to maintain a consistent level of talent, it’s hard to make best use of any technology.

IDAT Consulting’s Bert Moore says automatic identification and data collection (AIDC) technology and mobile computing could help address many of the issues that make workforce and supply chain management so challenging.

“The trouble is, the people who were educated about bar code technology 20 years ago have moved up/on/out and the newer people think they know everything, but they often have only a cursory understanding of the technology, standards and applications,” he says. “Even some vendors are less well-informed than one would like.”

VICS President and CEO Joe Andraski agrees, and believes this lack of attention to basic technologies and standards may be the beginning of a perfect storm in the logistics world.

“They don’t teach electronic data interchange (EDI), barcodes, or standards at schools,” he says. “GS1US bar code standards will be critical to meeting the expectations of buyers and ultimately the consumer, yet they don’t see those things as relevant. And yet fundamental supply chain management execution requires electronic movement of information. Consequently there are EDI transaction sets that people really don’t know how to use, and we have people making modifications based on what they think is important to their business, so you have a standard that’s not a standard.”

The storm comes when that lack of logistics knowledge combines with economic uncertainty and troublesome regulations.

“You have oil at almost $90 a barrel now, and it will be $150 a barrel in another six to eight months,” Andraski predicts. “You have this new regulation that will have carriers reporting driver hours-of-service violations, with those drivers being taken off the road. One major carrier told me as many as 15% of the drivers today will be taken off the road due to driver violations accumulated by the government."

Andraski says material handling and logistics professionals need to be students throughout their business careers. That means involvement not only with universities, but with trade associations and customers as well.

Industrial trainer Jim Shephard believes finding talent won’t necessarily be the problem. He foresees an ironic twist of fate, stemming from the massive layoffs suffered by industry.

“Keeping employees will become a problem when and if the market comes back,” he says. “New job opportunities may cause a major shift in the workforce and management staff.”

Government

IWLA President Joel Anderson believes the economy’s biggest challenges and opportunities are linked to this nation’s transportation system. The flow of freight through the U.S. is as vital as the blood that flows through our arteries. Getting that message across to lawmakers is an ongoing battle.

“My expectations for 2011 deal with our continuing inability, as an industry, to convince policy makers to re-invest in infrastructure for freight,” he says. “We have seen repeated authorizations for high speed rail of passengers, yet in the meantime, the very backbone of our society, trade and commerce, cannot get any traction on new highways, waterways, airports and freight rail.”

However, if there are to be any improvements in the freight infrastructure on public right of ways, the cost will have to be borne by the users, and not by picking the public purse, he adds. That means establishing a freight infrastructure bank—a concept that would increase funding by leveraging private investment.

As vice president of operations for a manufacturer with international markets, Thom MacLean puts transportation high on his list of challenges for the coming year. But for him, it’s not government that makes it challenging, it’s the nature of the beast.

“In the manufacturing sector where living ‘lean’ is our reality, transport is one of the seven deadly forms of waste,” he says. “Usually in this connotation we deal with moving materials unnecessarily during the manufacturing process since movement of material adds no value to the product from a customer standpoint. But in a broader sense, the cost of transportation in any form is a waste.

So the consensus of MH&L’s Editorial Advisory Board is that the challenge for all material handling and logistics professionals in 2011 will be managing waste—wasted talent, time and resources. And while Thom MacLean admits that waste cannot be completely eliminated, it still needs to be managed carefully and minimized.


On behalf of MH&L’s editorial staff and its advisory board, we hope you manage to have a happy new year.

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