Future shock: It's already here

By Staff -- Logistics Management, 5/1/1998

"The millennium is already here," says Dr. Bernard J. LaLonde. LaLonde, professor emeritus of transportation and logistics at Ohio State University, says that many of the dramatic changes predicted for business in the next century are well under way even now.

In his remarks at the Naples, Fla., spring membership meeting of NASSTRAC, a shippers group that focuses on issues affecting less-than-truckload shipments, LaLonde outlined how he believes business relationships will look in the early part of the 21st century:

* Businesses will collaborate in developing performance metrics. LaLonde says that differs from today's typical practice, in which each partner has its own standards. "Now there will be a way to measure what both want," he reports. The shift toward mutually developed standards will mean a change in the way sales personnel work, he adds. "Salespeople are becoming relationship managers. Some can't handle that." Businesses also will have to re-examine how sales personnel are motivated and rewarded, he says.

* Customers will determine acceptable service levels. "Since the 1950s, the United States has had a 'push' economy," LaLonde says. "Since the 1970s, we've had a one-size-fits-all mentality." But as some major customers, such as Wal-Mart in the retail business, gain purchasing power, they will determine how suppliers will be measured. "More and more, your customers are going to tell you what to do."

* Organizations will become more horizontal and customer focused. According to the annual Ohio State survey of logistics career patterns, 72 percent of companies have cross-functional teams in place, and 88 percent expect to have them within two years.

LaLonde says business historically has been modeled on the hierarchies of the church or the military. That's changing, he says, as a result of technology and the need for companies to respond rapidly to changing business conditions. The problem, according to LaLonde: "I don't know any company that has figured out how to do cross-functional teams."

* In order to manage costs, businesses will have to measure them differently, using such techniques as activity-based costing. "The old general ledger won't cut it any more," he says. "If you're going to get your requirements from a company like Wal-Mart, you had better know your costs."

* LaLonde also expects to see total integration of information systems--both within companies and between partners--to become the business norm. Transportation providers and third parties will have to be included in any such integration, he says. "There's not a doubt that we'll see information integration," he adds. "It's the cheapest thing in the channel."