Logistics must become more nimble, more flexible and more creative
By editor on May 3, 2012 Andrew Austin, CEO of Priority Freight examines some of the latest trends affecting the logistics industry.
Logistics – or at least the traditionally narrower definition of Transport – was long known as the barometer for industry, and an indication of the well-being, or otherwise, of the economy. Increasing demand for logistics services would normally be the immediate precursor to an improved sense of well-being, followed by an increase in consumption in the marketplace.
The relative simplicity of this model has been replaced by the more complex supply-chain, where the shipment of goods itself is only one part of the equation. The supply-chain itself involves the multiple stages of collection of raw materials, the manufacture of products, to the eventual distribution of these products for their eventual sale or use, as well as coordinating the related marketing and IT requirements that such goods may generate. This complexity, together with the distances involved over which the supply-chain operates, has, at times, highlighted the vulnerability of the constituent parts and the various participants themselves.
The impact of recent natural disasters on the effectivity of the supply-chain has been well documented, but significant disruption can resulted from human error, of course, as well as for overtly political reasons. Recent changes in the issuing of road haulage permits and in Russian customs procedures has led to significant queues of vehicles being formed on the approaches to the Russian border, thus delaying the effective transit of goods into that country. Apart from being expensive in terms of idle trucks sitting awaiting resolution, the capacity in the marketplace reduces.
Additionally, the recent explosion at the plant producing Nylon-12 resin in Germany - which is widely used as a product to coat automotive braking systems – has brought another challenge to the sector, and created a potential supply-chain interruption of some magnitude, due to the market share of production requirements that the product held, and the immediate difficulty in sourcing a replacement.
Some will read this and be unaffected by these two specific events, and others will be, of course, and that is the nature of this broad church of logistics. In reality they only serve to illustrate that all of us engaged in the supply-chain will, at some point, and possibly regularly, meet and have to deal with such challenges. That much is well known, but our response requires more than a knee-jerk response to the given situation, but instead a measured and determined one.
Much has changed in the logistics industry – global events carry more significance than they once did, and bring with them the need to understand the complexities of operating in these global markets. Additionally, the cost and time components of the global supply-chain mean that logistics now receives a higher profile within most organisations, and with it, a commensurate expectation to deliver and perform appropriately.
It is as an industry, therefore, that those involved in logistics seek to exceed the expectations of those who commission us, and invest in the appropriate intellect and experience to provide the requisite continuous improvement within our businesses. Increasingly the sector is required to show that it has the wherewithal to operate efficiently on a global stage, with a comprehensive knowledge of local operating nuances, too.
All very well, you say, but I can’t afford that, and I can’t presume to argue with you. All I can say is that events over the last few years have shown us, as an industry, that we continue to need to be more nimble, more flexible, more creative. Logistics has got to keep on moving.