The business world is changing so rapidly that supply chain professionals can no longer depend on their normal process to manage change that can literally greet you tomorrow morning. Major change can come from internal initiatives such as new product introductions, new business unit acquisitions, new stack integrated technology or new corporate objectives.
External influence from competitors (known and unknown), supply chain partners and the economy also force change.
Many are still living with the pain or can clearly remember it from recent supply chain disruptions. The phrase “a chain is only as strong as the weakest link” is more important than ever in 2011 even though the phrase was first published in 1786.
Your own supply chain history is powerful and relevant enough to help you make future decisions as problems and opportunities arise, but history is not repeating itself as the business world is increasingly competitive on a global and technological basis.
If you can honestly answer yes to these questions, you are better prepared than most to Command and Control your supply chain:
• My company’s IT department puts as much emphasis on Supply Chain as it does on HR and Finance
• If we acquired a company tomorrow with a totally different logistics process that was not using our same database software, we could match the data of both companies within a week to determine how to improve the two halves as a whole
• We can currently tell a customer exactly when they will receive product offered, in stock or not, with ninety nine percent accuracy
• We manage, negotiate and control over ninety percent of our transportation whether it is outbound, inbound or third party
• Primary, secondary and tertiary process are agreed upon and documented for extreme situations
• We have solid vendor relationships and open two-way communications that assure they will be strong next year
• Carriers are all on current contract(s) that anticipate price and volume changes
• The dashboard we are using lets us recognize and correct exceptions
• Customer purchase order, product number and carrier tracking numbers are all tied together so our customer, customer service, warehouse, supply chain vendors and sales team can work seamlessly together
• We are at or below our quarterly budget expense
• Distribution centers are managed to with centralized controls that are measurable and monitored on objectives but decentralized on subjective opportunities
• I am more than willing to tie my bonus to the above
If, like most, you cannot answer all of these questions positively, you need to seriously consider how to be much better positioned. It has become popular to outsource the whole process to a third party logistics firm that has a solid track record. Often the expense of outsourcing is significantly underestimated, so it should be carefully compared with what resources are available to master this internally.
In today’s world, cloud computing has risen in prominence and essentially incorporates sophisticated software and an array of servers sold on a transaction basis as SaaS (Software as a Service). These technology solutions are available to manage logistics by specific modes using analytical data creating a transportation management solution (TMS) tailored for a specific Shipper. Combining the right team of your own analytical and business savvy employees that are capable of reasoning with real time data, a strong internal alignment with your finance and purchasing teams and a solid relationship with your partners (manufacturers, distributors, retailers and carriers) may provide the right combination of flexibility, strength and wisdom to truly Command and Control your supply chain.
The marketplace is not static and waiting for you to move forward. There are some events taking place to consider:
1. Small package volumes continue to escalate as consolidations are broken apart so customers don’t have to buy and store inventory.
2. Residential deliveries have increased largely because of the web and will grow faster in the future, because of mobile devices. There are 5b mobile devices in use worldwide. These devices are estimated to generate 7t (trillion) text messages in 2011. Some already act as electronic credit cards.
3. With fuel costs looking like they will never settle down, going green may end up costing less than not.
4. Decisions are being made using accurate data, not just assumptions.
5. Because the whole world slowed down production in 2009; when the market began accelerating in 2010 most manufacturers were delayed because of supply chain issues making critical parts less available.
6. Small package rates and particularly ancillary surcharges like dimensional weight factors and fuel surcharges continue to move up higher. A package picked up in Austin and delivered the next business morning in Boston that weighs ten pounds and is one cubic foot costs over $110 right now.
7. Transportation spend is now ranked in the top four expense line items for most manufacturers and distributors.
The final result we all strive for is the delivery of product to a happy customer who is in turn pleased enough to order the solution (product and service combined) repeatedly. Calling customers to ask how it is going is like putting money in the bank. Lead by example and make those calls a routine habit.
Rob Shirley is President of ExpresShip a strategic technology partner in the global supply chain rsXPship@gmail.com
External influence from competitors (known and unknown), supply chain partners and the economy also force change.
Many are still living with the pain or can clearly remember it from recent supply chain disruptions. The phrase “a chain is only as strong as the weakest link” is more important than ever in 2011 even though the phrase was first published in 1786.
Your own supply chain history is powerful and relevant enough to help you make future decisions as problems and opportunities arise, but history is not repeating itself as the business world is increasingly competitive on a global and technological basis.
If you can honestly answer yes to these questions, you are better prepared than most to Command and Control your supply chain:
• My company’s IT department puts as much emphasis on Supply Chain as it does on HR and Finance
• If we acquired a company tomorrow with a totally different logistics process that was not using our same database software, we could match the data of both companies within a week to determine how to improve the two halves as a whole
• We can currently tell a customer exactly when they will receive product offered, in stock or not, with ninety nine percent accuracy
• We manage, negotiate and control over ninety percent of our transportation whether it is outbound, inbound or third party
• Primary, secondary and tertiary process are agreed upon and documented for extreme situations
• We have solid vendor relationships and open two-way communications that assure they will be strong next year
• Carriers are all on current contract(s) that anticipate price and volume changes
• The dashboard we are using lets us recognize and correct exceptions
• Customer purchase order, product number and carrier tracking numbers are all tied together so our customer, customer service, warehouse, supply chain vendors and sales team can work seamlessly together
• We are at or below our quarterly budget expense
• Distribution centers are managed to with centralized controls that are measurable and monitored on objectives but decentralized on subjective opportunities
• I am more than willing to tie my bonus to the above
If, like most, you cannot answer all of these questions positively, you need to seriously consider how to be much better positioned. It has become popular to outsource the whole process to a third party logistics firm that has a solid track record. Often the expense of outsourcing is significantly underestimated, so it should be carefully compared with what resources are available to master this internally.
In today’s world, cloud computing has risen in prominence and essentially incorporates sophisticated software and an array of servers sold on a transaction basis as SaaS (Software as a Service). These technology solutions are available to manage logistics by specific modes using analytical data creating a transportation management solution (TMS) tailored for a specific Shipper. Combining the right team of your own analytical and business savvy employees that are capable of reasoning with real time data, a strong internal alignment with your finance and purchasing teams and a solid relationship with your partners (manufacturers, distributors, retailers and carriers) may provide the right combination of flexibility, strength and wisdom to truly Command and Control your supply chain.
The marketplace is not static and waiting for you to move forward. There are some events taking place to consider:
1. Small package volumes continue to escalate as consolidations are broken apart so customers don’t have to buy and store inventory.
2. Residential deliveries have increased largely because of the web and will grow faster in the future, because of mobile devices. There are 5b mobile devices in use worldwide. These devices are estimated to generate 7t (trillion) text messages in 2011. Some already act as electronic credit cards.
3. With fuel costs looking like they will never settle down, going green may end up costing less than not.
4. Decisions are being made using accurate data, not just assumptions.
5. Because the whole world slowed down production in 2009; when the market began accelerating in 2010 most manufacturers were delayed because of supply chain issues making critical parts less available.
6. Small package rates and particularly ancillary surcharges like dimensional weight factors and fuel surcharges continue to move up higher. A package picked up in Austin and delivered the next business morning in Boston that weighs ten pounds and is one cubic foot costs over $110 right now.
7. Transportation spend is now ranked in the top four expense line items for most manufacturers and distributors.
The final result we all strive for is the delivery of product to a happy customer who is in turn pleased enough to order the solution (product and service combined) repeatedly. Calling customers to ask how it is going is like putting money in the bank. Lead by example and make those calls a routine habit.
Rob Shirley is President of ExpresShip a strategic technology partner in the global supply chain rsXPship@gmail.com
