In this prolonged recession, logistics and transportation professionals have faced the challenges of streamlining operations, enhancing efficiencies, restructuring operations, bolstering customer service, reducing overall costs, and improving supply chain readiness. As supply chains have become longer and more complex, the risk factors - fear, uncertainty, and doubt - have increased. This will force (and has forced) logistics and transportation professionals to react, rather than be proactive, as supply and demand trends bring both opportunities for and threats to their organization. On the other hand, the slow economy has meant some downtime for many logistics and transportation professionals. Now is the time to both study and invest in people, processes, and systems that will help you get through any current difficulties and position your company to profit from the economic rebound that is to come. How? By being able to rapidly adapt to new supply chain business requirements by changing internal logistical process rules and quickly reacting to the external supply chain environment.
By way of example, getting greater control over your carriers and warehouse docks is the one of the most important steps you can take to improve operations. Connecting transportation management to related software applications such as an order management system can create new efficiencies in preparing loads for shipment. Further integration with a warehouse management system allows you to automatically determine when an order, based on the number and dimensions of products, should be sent via small-parcel, less-than-truckload, or full-truckload. One of the biggest challenges facing us, for example, is to receive and/or ship goods in fully loaded trucks, to achieve lower costs per item. This could be accomplished by better load planning and/or taking advantage of shipment consolidation opportunities. Another challenge is to arrange for backhaul trips to avoid the cost of running empty mileage.
During the past two years, an adverse logistics financial impact has occurred because of large inventories forcing transportation tradeoffs in time and cost as supply chain strategies and models are being challenged. In the past we have been used to quickly reacting and rebounding in the face of supply chain risk - it’s just that today your sensitivity to turbulent conditions must have a more heightened sense of awareness than ever before. In a world of fear, uncertainty, and doubt, preparing for alternate scenarios can provide focus on things you can't avoid as well as things you can avoid. Look at how logistics, distribution, warehousing, inventory and transportation assets, resources, and processes can help your business through your constant questioning of how you will anticipate and respond to turbulent conditions. Sometimes it’s easy to forget that opportunities are usually created by difficult conditions. Remember, logistics and transportation professionals get paid to manage the exceptions, not the just the routine.
Therefore, I advise you to think about alternative scenarios and how you would respond to them before they occur. Scenario planning tests whether a current strategy makes sense, and points out the limitations for doing business in turbulent times. Logistics and transportation professionals need to become more observant about each individual logistics function when viewing their supply chain. How?:
Become hyper-vigilant of the more discrete elements of your supply chain environment
Look for patterns amidst your everyday routines
Regard any out-of-ordinary patterns as a possible risk or intentional distraction
Focus on incongruent people, equipment, processes, methods, material flow, etc.
Look beyond what you are shown or told and,
Do not tune out familiar surroundings - look deeper for things that you may have missed
This article part of the monthly series authored by ISM’s Logistics & Transportation Group Board Members, who are current practitioners, consultants and educators. In future columns they will be sharing their views on a number of Supply Chain topics.
Thomas L. Tanel, CTL, C.P.M., CISCM, is the President and CEO of CATTAN Services Group, Inc., specializing in Logistics and Supply Chain issues. He is also the Chair of ISM’s Logistics & Transportation Group and can be reached at tanel@cattan.com or (979) 260-7200. Membership in the Group is open to all ISM members who are responsible for or have an interest in the Logistics & Transportation fields.
By way of example, getting greater control over your carriers and warehouse docks is the one of the most important steps you can take to improve operations. Connecting transportation management to related software applications such as an order management system can create new efficiencies in preparing loads for shipment. Further integration with a warehouse management system allows you to automatically determine when an order, based on the number and dimensions of products, should be sent via small-parcel, less-than-truckload, or full-truckload. One of the biggest challenges facing us, for example, is to receive and/or ship goods in fully loaded trucks, to achieve lower costs per item. This could be accomplished by better load planning and/or taking advantage of shipment consolidation opportunities. Another challenge is to arrange for backhaul trips to avoid the cost of running empty mileage.
During the past two years, an adverse logistics financial impact has occurred because of large inventories forcing transportation tradeoffs in time and cost as supply chain strategies and models are being challenged. In the past we have been used to quickly reacting and rebounding in the face of supply chain risk - it’s just that today your sensitivity to turbulent conditions must have a more heightened sense of awareness than ever before. In a world of fear, uncertainty, and doubt, preparing for alternate scenarios can provide focus on things you can't avoid as well as things you can avoid. Look at how logistics, distribution, warehousing, inventory and transportation assets, resources, and processes can help your business through your constant questioning of how you will anticipate and respond to turbulent conditions. Sometimes it’s easy to forget that opportunities are usually created by difficult conditions. Remember, logistics and transportation professionals get paid to manage the exceptions, not the just the routine.
Therefore, I advise you to think about alternative scenarios and how you would respond to them before they occur. Scenario planning tests whether a current strategy makes sense, and points out the limitations for doing business in turbulent times. Logistics and transportation professionals need to become more observant about each individual logistics function when viewing their supply chain. How?:
Become hyper-vigilant of the more discrete elements of your supply chain environment
Look for patterns amidst your everyday routines
Regard any out-of-ordinary patterns as a possible risk or intentional distraction
Focus on incongruent people, equipment, processes, methods, material flow, etc.
Look beyond what you are shown or told and,
Do not tune out familiar surroundings - look deeper for things that you may have missed
This article part of the monthly series authored by ISM’s Logistics & Transportation Group Board Members, who are current practitioners, consultants and educators. In future columns they will be sharing their views on a number of Supply Chain topics.
Thomas L. Tanel, CTL, C.P.M., CISCM, is the President and CEO of CATTAN Services Group, Inc., specializing in Logistics and Supply Chain issues. He is also the Chair of ISM’s Logistics & Transportation Group and can be reached at tanel@cattan.com or (979) 260-7200. Membership in the Group is open to all ISM members who are responsible for or have an interest in the Logistics & Transportation fields.
