Life in the Fast Lane

There used to be those who viewed logistics as a slightly sleepy business. Sure, we worked against the clock, we moved things along, we met our customers’ timetables, we worked very hard to get products safely and on time to the places they had to be. But the pace, compared to the way we move today, was almost leisurely.

In those days, warehousing was buried deep in the supply chain—and usually at the end of a long decision chain. Changes evolved in three-to-four month cycles. Warehousers reacted to directives that came from a remote decision-maker and a strategic process in which they played no part.

Those days are long gone.

Today, logistics is no longer an isolated function. Forward-thinking business managers are delving into the incredible strategic potential embedded in their supply chains. They want answers, they want results—and they want them now!

Customers expect start-ups to happen in 30 days. They want dependable data on the spot. They want supply-chain expertise delivered instantly.

First, information technology has turbo-charged the pace. The amazing amount of information and data we can know real time accelerates learning, expands knowledge, and crystallizes decisions. Innovative interfaces make it possible for our customers to know precisely what their inventory is at virtually every moment. And inventory is measured and moved in increasingly small increments. With many customers, we’ve gone from truckloads, carloads, and pallets to cases, partial cases, and eaches—all with their own data-exchange challenges.

The second major change (and this one is huge) is that our customer’s ultimate customer—the consumer—is driving the business. And rightfully so! Today’s consumers expect to get whatever they want, whenever and however they want it. Online shopping and swapping intensify the need for speed. The e-commerce consumer knows that anything his or her heart desires is only a click away. E-businesses compete on how quickly and how efficiently they can get products into the consumer’s hands, so e-fulfillment is a whole new breed of logistics. It is demand-chain management at its most demanding. Logistics and supply chain partners with experience and hands-on knowledge become a crucial competitive advantage to any type of business, especially one that’s starting up or tranforming the way it does business.

How do we succeed at mega speed?

Our organizations must be flexible and poised for change. Our capabilities must be re-designed and reconfigured constantly so they can be deployed rapidly when customers’ needs change. Aligning with like-minded strategic partners, we form networks of capabilities and value-producing systems capable of achieving results far beyond those we could achieve alone.

Second, our IT infrastructure must enable us to leap to the front edge of the learning curve, with sensors attuned to our customer’s customers and to even subtle changes in the business environment. Knowing more, knowing earlier, and being ready to use and share that information are what drive these value-producing systems. If we are up to speed, we may identify our customers’ needs and opportunities before they do!

Third, process management becomes more important than ever. In a world that moves fast and changes often, applying systematic and proven processes in new combinations is not only smart, it’s absolutely critical. We must conceptualize the work of the organization through process, use process instead of procedures wherever possible, hold people accountable for outcomes, identify and propagate best practices, and be able to apply our core processes in radically different situations.

So we go forward—fast—with our processes, with our expertise, with our customers, with our partners. And the truth is, we do it better together than any of us could alone. We exchange data. We explore creative solutions. We share knowledge.

And in the spirit of sharing knowledge, I’ll return to this column in the July issue. Between now and then, tell me what you think. What’s next? What planet does this rocket called logistics land us on tomorrow? Will we be ready?