Logistics Pros Circumnavigate the Business World

April 30, 2013
Companies finding their way out of a tough economy are using logistics landmarks to put their supply chains on the map.

Ross Perot Sr. energized the U.S. presidential campaigns of 1992 and ’96 by putting politics into a business context. On Monday morning, in a Sheraton Dallas Hotel ballroom, Ross Perot Jr. energized opening-day attendees of the Warehousing Education and Research Council’s (WERC) annual conference by putting business into a logistics context. He's chairman of Perot Systems, and he wrapped up his keynote speech on developments at the 17,000-acre AllianceTexas development by paying tribute to logistics. He did that by telling of the logistics planning that supported his successful 1982 around-the-world helicopter ride. This was pre-GPS. All he and his co-pilot had to navigate by was high-frequency radio. He said this mission’s success was one-third flying skills and two-thirds ground support.

Logistics details on the ground included arranging legal permissions and maintenance teams to support 56 landings.  The Russians wouldn’t allow him to land in their territory, so his ground support arranged for American President Lines to provide a ship off the coast of Russia for a landing at sea. The point was, this adventure required the cooperation and communications of problem solvers. And that set the theme for WERC’s conference agenda and for many of the conversations held on its “Wire” show floor.

At least that was a common theme in several of my show-floor conversations.

Mathias Frick, executive account manager for SSI Schaefer Systems, told me he’s noticed a new optimism about the business climate, but it’s being built more on proof-of-concept meetings than on leaps of faith. He said that in this recovering economy, companies have more at stake in big logistics projects. Therefore, the CEOs at client companies require the ground support offered by the supply chain executives who collaborate with SSI on the necessary engineering studies to validate their concepts.

Frick confessed he’d rather be focused on putting steel in the ground, but the growth in these projects this year means that what’s keeping him busy in conference rooms right now will result in more real-world projects later this year.

Mike Moran, director of warehouse product sales for NACCO Material Handling, the home of Yale lift trucks, told me that investing in lift truck fleets is a C-level issue in today’s environment and he is now meeting on a quarterly basis with the managers who are direct reports to that level to refresh their fleet strategy. Is the truck still right for the environment? Telemetry, fleet statistics, operator performance—all of these issues factor into safety, maintenance and finance, which are top-down strategic issues. Moran says customers are getting disciplines across the entire enterprise involved in lift truck fleet management strategy.

This wasn’t just vendorspeak. It was borne out in end-user-oriented conference sessions like the one on supply chain optimization. Kathleen Shafer is senior director of supply chain transformation for CVS Caremark. That’s not only her title, but it’s one of CVS’s top corporate initiatives. She’s involved in aligning the enterprise so that silos like merchandising and marketing have a stake in supply chain. This is an ongoing process for them, and analytics will be critical in the next stages. It will include network modeling to determine their investments in reducing cycle times and designing delivery models to store needs. CVS stores are found in a variety of markets that reflect different hours of operation, customer profiles, shopping patterns and backroom sizes and configurations. This requires new systems for inventory planning, cycle time reduction and better supply chain visibility in general.

Helping them stay the course using this roadmap will be top-down sponsorship, a cross-functional structure and a long-term horizon. Logistics helped facilitate these C-level goals, but it’s not characterized as a logistics project. It’s an enterprise initiative.

One final observation: in my discussions on the first day at the WERC conference, the state of the U.S. logistics talent pool came up. Many of the logistics pros I had these discussions with had decades of experience, but they came from many other points in a corporate enterprise and ended up in supply chain and logistics by accident, not design. They brought to their jobs everything they learned from their disparate backgrounds. Now supply chain programs at schools across the country are minting logistics pros by design. I’m thinking it’ll take them a few helicopter tours around their real world, and the right multi-discipline ground support, to help them master happy landings.

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