Sometimes, shipments get delayed—it’s just a fact of life, and it's the cost of doing business when you enter the global supply chain. Often, the cause of the delay will be fairly obvious on the outside: a hurricane blocks off a shipping route that usually goes through the Gulf of Mexico, or a strike in France brings all shipping through French ports to a halt. Just as often, however, the reason for the delay seems completely mysterious: despite ideal traffic, weather, and trade conditions, your cargo just doesn’t make it to the right place at the right time.
Where does risk come from? Is it an external force? Something from within? Or is it what happens when you’re not prepared for an unexpected event? In our experience, it’s the combination of all three of these forces, acting on your weekend plans, your work project, or your supply chain. How do you address these risks? Reactively, by waiting for the disruption to occur and then working feverishly to repair the damage and return everything to normal operation? Or proactively, by defining plans and processes so that when a disruption happens, you and your team can follow the established steps to return to normalcy? Again, we would posit that it’s in finding the right balance between these options, allowing you to proactively plan for any contingency you may have to react to, that you’ll find risk management success.
Remember your last car trip? You spent all that time planning your route to maximize the sights you would see. Then you organized your equipment and snacks and packed the car just right so everything was easily accessible. Can you imagine what would have happened if you went to leave and the car didn’t start? Now your whole itinerary is thrown off, you have to call roadside assistance, change the hotel reservations, not the way to start a great vacation. The analogy to the transportation leg of your supply chain is clear—if you neglect one segment the whole system can come crashing down. In order to optimize your end-to-end supply chain, you need to pay close attention to the transportation network. This is often the place where systems break down and costs can spiral out of control. On the other hand, just as doing preventative maintenance on your car eliminates the possibility of the failure of your vacation, optimizing your transportation network can eliminate cost overruns and other disruptions to your smoothly functioning supply chain. Follow these best practices and you’ll be off to a great start.
There’s been a big push towards lean manufacturing and logistics in the past few years, with manufacturers doing everything in their power to reduce inventory levels and rely less on their buffer stock. Because there’s a considerable element of risk involved in a truly lean supply chain, virtually all supply chains stop short of completely lean workflows. The one significant exception? The newspaper industry. While newspapers aren’t usually thought of as manufacturers in the traditional sense, they do produce a product in a systematic way in order to be shipped to end-users—with the crucial difference that anything resembling a buffer stock or inventory is rendered useless by the impossibly short lead times, as papers become obsolete just hours after they’re distributed.
A few years ago, three days was considered a reasonably quick shipping turnaround. Today, for many consumers three days is considered glacial, two days is considered standard, and only shipping times shorter than one day really count as fast. These changing expectations have put numerous businesses, from manufacturers to logistics providers, in a position to either optimize their transport processes for greater efficiency or cede transportation management as a competitive advantage. The latter is obviously not something that any business really wants, but the former can be a tall order.
Let’s say you’re trying to become a healthier person. Seems simple enough, right? You just need to choose healthier foods and exercise a few times a week—it’s just a matter of making a new weekly schedule that includes time set aside for exercise and for cooking a few health-conscience meals. Right? Well, maybe not. When you set down to actually create this new schedule, you realize that you’re not sure how much exercise you’re getting currently or how many calories you’re burning during that exercise. As a result, you determine that you need to get a Fitbit to track to your current exercise levels. By the same token, you find that you need a food scale to help you measure out portions for your new recipes, and you need to do a lot of advanced research on the actual calorie counts and other nutritional information for various foods.
Logistics 4.0: buzzword, or critical concept for the future of supply chain management? We might be a little bit biased over at flexis, but we’re pretty sure it’s the latter. As the global supply chain becomes every more complex and ever more digital, businesses are going to need a new framework for making decisions, developing shipping plans, and creating cohesion between their various IT choices. We think that Logistics 4.0 is going to provide that new framework, and we think that after you’ve had a chance to peruse some of these interesting facts, you’ll heartily agree.
Raise your hand if you’ve ever played a game of telephone. For those of you who are unfamiliar, the game starts with a number of players sitting in a circle; one player whispers a word or phrase to the person next to them. That player, in turn, whispers the word or phrase to the next adjacent player, until the word or phrase has cycled back to the original player, who tells everyone else what the original word or phrase was. Usually, players find that the phrase has morphed into something else entirely over a series of mis-hearings and miscommunications—which is the entire point of the game.
When you play chess, you’re supposed to think several moves ahead. This means that whenever you move one of your pieces, you should be anticipating the possible moves that your opponent will make in response, and what you’ll do in response to your opponent’s next moves. Since at each stage there are multiple possibilities, the possible scenarios you need to keep in your head at any given time begin to multiply pretty quickly. And yet, for each scenario it’s imperative to be able to look at the entire board in your mind and consider all of the hazards and opportunities that present themselves. In this way, it’s a little bit like logistics planning.
If you sat down to compare the experience of taking a cross country road trip now vs. thirty years ago, what might come to mind? Probably, your first thought would be about how the rise of GPS systems (and, relatedly, smartphones) had made navigation much easier. Gone are the days when drivers need to purchase physical maps and chart their courses by hand. You might also think about the ways in which modern cars are better suited to this kind of journey, often featuring built-in GPS systems, Bluetooth hookups for playing music or receiving navigational instructions from your iPhone, and improved safety features like alerts if you're drifting out of your lane. All of this is undoubtedly true, but do all of these convenience-adding features also make traveling cheaper?