LTD Management
Logistics & Supply Chain Management Consulting Global Solutions That Work

Logistics
DON'T BE A RODNEY DANGERFIELD

By THOMAS CRAIG
President LTD Management
www.ltdmgmt.com

Logistics is the most difficult responsibility in a company. It isconstantly being pushed and pulled from many directions, both internal andexternal. Sales, Accounting, Operations, Purchasing, Customers, Vendors, Carriers. Making the challenge even greater is the conflict in Logisticsresponsibilities--control costs and maximize service. Many company executives do not understand what logistics is or what it really does.

Logistics success is difficult to measure. It can be difficult to show yourcontribution to the company and the value-added you create. You have to jumpto many different data, sources and measures. Some costs are on the P&L. Some, like inventory, are not on the P&L; they are on the balance sheet.Service is not on any financial statement. But logistics effectiveness ismore than costs and cost reduction. That is a very narrow and incorrect view.

You can develop measures. But they may be viewed with skepticism and asself-serving. It may be that the only thing many in the company may rememberis the last problem or mistake which occurred with an order or shipment. Incertain situations, it can be a no-win.

If this wasn’t enough stress, adding to the situation is the perception inmany companies that logistics is a necessary evil and it does not take muchskill to do it. On some days, you can feel like Rodney Dangerfield. You don’t get no respect.

Feeling sorry for yourself will not resolve the problem. You have to takethe situation into your hands. If the company and its systems do not helpyou to define your contribution and its value, then get to work with theinternal players.

Look at scope of internal interactions.
Logistics interacts with practically every department in a company. Someactivities are infrequent. Some are daily. With this broad scope ofinteraction is a corollary issue--the organization chart. The emphasis may beon supply chain management activities or on reengineering. These are flatorganization concepts. They require integration and teamwork - which are theopposites to what the traditional organization chart, and its functionaldefinition of tasks and responsibilities, dictate.

Study internal interactions.
Look at your interactions and ask yourself some serious questions. It can belike a law of physics. For every action, there is an equal and oppositereaction:

- Does your company culture promote teamwork or finger pointing?
- Who are the key players to accomplishing your responsibilities, both
organizationally and politically?
- What do they expect of you?
- What do you expect of them?
- Do they really understand what you do?
- Do you really understand what they do?
- How do they perceive you?
- How do you perceive them?
- What positives/strengths do you contribute to their efforts?
- What negatives/problems do you contribute to their efforts?
- How well do they know you and your organization?
- How well do you know each of them and his/her organization?
- Where are the key interfaces?
- How well do these interfaces work, from their perspective?
- How well do these interfaces work, from your perspective?
- If there are difficulties, what are they, from their viewpoint?
- If there are difficulties, what are they, from your viewpoint?
° How do you address problems which are raised by other depart-ments? Is it
a memo-writing contest between the two groups with no real problem
definition and resolution?

Is it done with teamwork, defining the real problem and finding ways tocorrect it?- What have you done to teach others what logistics is all about?

- What have you done to learn how others need you and how they view you?- How often do you and your people meet with each of these departments?° Is it only when there is a problem?° Is it only annually with some type of formal meeting?° Is it regularly, monthly or even more frequently?° Is it formal, with a purpose and agendas?° Is there informal interaction?

Do something about it -
Define and Redefine Logistics.
Don’t sit there feeling frustrated. Stop feeling sorry for yourself. Stopyour “circle the wagons” feeling. Get up out of your chair. Do somethingpositive. Go start to correct the situation. It’s more than tooting yourown horn. Start making friends and building allies. Remember perception canbe stronger than reality.

Define who you are and what you do. Logistics is not shipping. It’s notwarehousing. It is much more. It is a process which stretches from yourvendors through to your customers, from the vendors shipping door to thecustomer’s receiving door.

Then once you have defined logistics to your company, redefine it. If thecompany does not think in terms of logistics, then you must think in thesame terms as does the company. Look at your impact and think in the sameterms as does the company. Look at your impact and contribution to customersand sales. Look at ways to help to grow sales and increase customersatisfaction.

But do not do the redefinition by yourself. Look at the company’s plans.Listen at how the president talks. Meet with Sales and other key groups.What are the issues they talk about? Then look at what your role is withthese understand. Logistics, from its early days as traffic, has haddifficulty being understood. Logistics speaks a different language. Freightrates per hundredweight or cube utilization, for example, have no meaning toanyone in the company except for Logistics. So stop it. Talk like the restof the company does.

They may not know logistics. But they may know supply chain management orcontinuous replenishment. Fantastic. This is a great opening for logisticsto show what they can do.

Once you have stated this definition and redefinition, keep it up. Meetregularly with other departments. Don't just meet when there are problems.Meet when there are no problems. See what is going on with them. What arethey doing? Can you help?

Travel around the company. When you travel, meet with your company plantpeople. Meet with the regional sales people. Get to know them. Get to knowwhat makes them tick, on a one-on-one basis.

Carry some presentation aids, charts, transparencies, or whatever to explainlogistics. Show people your organization and what they are responsible for.Show them what all Logistics does. Let them know who they can contact whenthey have a need. Learn who your people should contact when they have needs.Build your internal network.

Become proactive. Develop and present programs that help the company, yourinternal allies and logistics. Get internal support, then make it happen.Implement and keep everyone updated on what you are doing. Do this formallyand informally.

Conclusion. Logistics in many companies is not really understood. It can beviewed in wrong or narrow terms. To change the perspective, define whatlogistics is and does. Then define it in terms consistent with how thecompany talks. It is not an easy task. It is not a one-shot effort. But itcan be beneficial, especially when outsourcing is an option to the company.(section)

LTD Management has a page on the Web at www.ltdmgmt.com address. LTDManagement provides Logistics, Transportation, and Distribution consultingand services for both international and domestic. Interested visitors cansend e.mail inquiries to LTD from the page on logistics topics such asSupply Chain Management to Global Logistics. Visitors can also link to LTD’sLogistics article in each issue of WWS/World Wide Shipping magazine which isalso on the Internet at www.wwship.com address.

LTD Shippers Association is on the Web at www.ltdmgmt.com address. LTDShippers is an association for small-mid-sized companies importing from Asiato the U.S. and Canada. LTD provides competitive ocean container and LCLrates for members. Members are manufacturers, wholesalers/distributors,retailers and other beneficial interests. Visitors can review theAssociation’s operating program and complete the membership form andactivity overview.

The site was prepared by Net Logistics, Inc. which has established analliance with Microsoft and Compaq for logistics/transportation software andequipment, on the Web.) (section)

COUNCIL OF LOGISTICS MANAGEMENT PUBLISHES 1996 LOGISTICS SOFTWARE

The Council of Logistics Management has just published the 1996 edition ofits annual Logistics Software survey, which has been conducted for theCouncil by Andersen Consulting every year since 1980.

The survey is available in a 908-page, soft cover book format and includesdetailed information on over 1,600 software packages of interest tologistics personnel. Individual sheets for each software package show suchthings as:

° The system name° Vendor (complete address and phone number) Contact° Price° Maintenance fee° Installations (number and date first installed)° Update (frequency and last update)° Hardware° Language° Databases° Processing mode° Code provided° Functions provided° Comments on what the package includes, what other functions the packagesupports, etc.° Distinguishing characteristics° Mainframe° Minicomputer° Microcomputer° Client/Server

Readers are enabled to identify quickly those packages which have thegreatest potential for their operations or companies' configurations ofmanagement information systems hardware. Information is cross-referenced intwo appendices: readers can locate the vendor if they know the name of thesoftware, or locate the software if they know the name of the vendor. Anintroduction to the survey offers several suggestions for evaluatingsoftware. In addition to the publication readers will also receive theSoftware Selection Aid, the new electronic version of the survey. The costof the Logistics Software is $75. for members and $100. for nonmembers. Toorder, call (630) 574-0895 or write: CLM, 2803 Butterfield Rd/380, OakBrook, IL 60521.