The function comes first

By Peter Bradley, Editor in Chief -- Logistics Management, 4/1/2000

During National Manufacturing Week in Chicago last month, I had the opportunity to sit on a panel of editors, addressing the issue of key developments and trends in supply chain management. Editors on the panel represented magazines from across the supply chain, starting with design and moving through purchasing, manufacturing, plant engineering, materials handling, and warehousing.

In preparing my remarks, I had the chance to step back and consider just where logistics fits in the supply chain. I took the position that without logistics, nothing happens. If a chain of processes is the metaphor we choose to describe business design, logistics provides the links in the chain, joining all of the other processes, and, increasingly, providing the links in the extended enterprise.

In a business environment increasingly viewed as one driven by electronic communications and information management, logistics still has to manage in the world of physical reality. Goods have to be loaded on trucks, planes, trains, or ships and move down highways, through the airways, on the rails, or across the ocean. Products can still get damaged or stolen. Schedules are subject to delays caused by accidents, congestion, weather, and more.

A disproportionate share of the burden of ensuring optimal supply chain performance falls to logistics managers. Why? Underlying most supply chain strategies is the push to compress time. And much of the time in any supply chain relates directly to goods in transit or in storage-the direct responsibility of logistics managers.

Certainly, logistics management has changed radically over the last decade or so. It is much more reliant on technology than ever before. What's important to understand is that even the best technology does not diminish the need for logistics talent, knowledge, skill, and experience. Aaron Gellman, director of the Transportation Center at Northwestern University and an astute student of this business, made the point during a logistics conference sponsored by The Conference Board earlier this year. "Shippers have done themselves a lot of harm by making the business more turn-the-crank than it really is," he says. "To think that you can turn every decision over to a model is a terrible mistake."

Managers in all segments of the supply chain and across enterprises have to collaborate to make improvements in the chain. To reach for a commonly used metaphor again, businesses have to bridge those functional silos. But that

doesn't diminish the importance of those functions; after all, the prerequisite for supply chain excellence is functional excellence. If what happens on the shipping dock falls short of expectations, what happens in the boardroom won't matter.

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