It's time to innovate
Francis J. Quinn, Editorial Director -- Logistics Management, 10/1/2002
Logistics professionals know all about top-down management. Faced with unrelenting pressures on revenues and margins in a tough economy, company leaders are seeking out every possible opportunity to cut costs and streamline operations.
So when a logistics manager gets the marching orders from above to slash outbound transportation costs by X percent, or cut deadhead fleet miles in half, or reduce order processing time in the warehouse, how is he or she to respond? The answer is to innovate. And while that answer might sound simple, it is anything but.
Innovative approaches to logistics challenges must include two key components: 1) a thorough analysis of the current situation and 2) a willingness to collaborate with others to improve that situation. Most logistics people understand the analysis part. They know that developing a baseline knowledge of what you do and how well you do it is the essential first step in identifying potential areas for improvement.
The second part of the innovation mandate, however, is a little tougher to fulfill. All too many managers remain hesitant to ask for help or advice from the outside, somehow believing this reflects badly on their ability to come up with the answers. But that's where the best opportunities for logistics innovation lie—in two parties' working together openly to find a solution or capitalize on an opportunity.
And collaborative opportunities do, in fact, abound. Talk to your carrier partners and explain your need to minimize rates while keeping service levels high. Sounds like an impossible task? It would be, if either you or the carrier attempted to do it alone. But by working collaboratively, maybe you can identify pockets of waste in the relationship that can be eliminated. Or perhaps you could change shipment routings in a way that would benefit you, your carrier and your customer.
Are you getting pressure to cut warehousing costs or reduce order processing time? Ask the warehouse operators and pickers who are actually doing the work how the operation could be streamlined. These front-line personnel are one of the most valuable—yet typically most often overlooked—sources of innovation and improvement.
Collaboration should extend to other functional areas within the organization as well. Establish a personal and professional relationship with your colleagues in the purchasing, sales, customer service and IT departments to identify and then leverage any potential points of synergy.
The nice thing about the kinds of opportunities suggested here is that they don't require massive investments in capital or human resources. They just take a willingness to do the basic homework, reach out beyond your department, and say to others openly and sincerely, "How can we do things better?"





















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