Logistically Speaking: Another sleepless night

Aug. 10, 2005
In the world of logistics today, just managing to get through an entire work day without a major crisis has become a core competency. Whether your company

In the world of logistics today, just managing to get through an entire work day without a major crisis has become a core competency. Whether your company looks upon supply chain management as the be-all and end-all of its corporate strategy, or whether it chooses to outsource most of its logistics operation to a third party, you as a logistics professional always seem to be in the middle of one contentious situation after another, don't you? Maybe that's just the nature of the job.

What we can say with confidence is that there is a solid sense of fraternity within the logistics community. That spirit of "we're all in this together" explains the spirit of continuous improvement that motivates logistics professionals to seek out answers to their questions from their peers, and in fact it's the engine that drives Logistics Today, where every day we report on the latest trends in keeping the global supply chain in good working order.

For better or worse, logistics professionals share many of the same problems and concerns, and to illustrate that point, I put together the following David Lettermanesque Top Ten list for logistics managers (the main difference being that my list isn't particularly funny):

Top Ten Reasons Logistics Managers Don't Sleep At Night

10. Consolidation
Will the companies you're doing business with today still be around tomorrow? Does it matter that less-than-truckload (LTL) carriers Roadway, USF and Yellow are all owned by the same company now? Do you wonder if UPS will be able to seamlessly integrate Overnite's operations into the vast UPS network? Are you a former J.D. Edwards or PeopleSoft customer still waiting for a straight answer from Oracle as to its long-term product support plans?

9. Site selection
How much are you spending to run your warehouse? Are you spending too much? Have you optimized your distribution network? Where are the best places to locate your distribution centers?

8. ROI
How eager is your boss to invest more money this year in transportation? Is logistics considered strictly a cost center, or does it have strategic value to your company? And what about all the technology you've been throwing money at? What's the timeframe for achieving a return from your investment in radio frequency identification (RFID) tags and readers and printers? And what about all those software packages you've lobbied for? Are they working as promised?

7. Third-party logistics (3PLs)
What's your company's core competency? (Do you have a core competency?) Are you using 3PLs in any facet of your transportation or distribution network? How well are you able to evaluate their performance? Are you saving money by using a 3PL?

6. Supply chain management
How closely are you working with your key suppliers? Just as importantly, how much visibility do you have into your customers' supply chains — and they into yours? Do you have strategic plans to work with any of your competitors? Whom do you benchmark yourself against? Do you benchmark at all? How do you define best practices at your company?

5. Globalization
Do you have a "China strategy"? Have you personally been to China, or are you planning a visit in the near future? How quickly will you be able to reconfigure your supply chain network if political turmoil or epidemics erupt in Asia? What's your company's attitude toward CAFTA? Is Eastern Europe an area under consideration for your sourcing?

4. Fuel costs
Can you do anything about the cost of fuel? Are you paying fuel surcharges? What happens to your company if fuel prices stay high and go even higher?

3. Congestion
What percent of your imports/exports go through the Ports of Los Angeles/Long Beach? Are you looking at any other West Coast ports? Have you looked into bypassing the West Coast altogether? What impact will new tollroads have on your private fleets or carriers? How are you contending with ever worsening big-city traffic?

2. Security
How much time does your company invest in security training? Are you up to speed on C-TPAT, CSI, MTSA and other national initiatives? Are you and your carriers fully compliant with hazmat, FDA or other appropriate industry regulations? How long does it take for your goods to clear Customs?

1. Capacity
How easy is it for you to get trucks these days? What would happen if your preferred carrier told you they don't want your freight? Do you have a private fleet? Have you jump-started your peak season this year to get a jump on Wal-Mart and the other big retailers who monopolize the port terminals every fall?

Pleasant dreams...

Dave Blanchard,
[email protected]

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