All Columns Entries

Wednesday, February 01, 2012

Most companies’ manufacturing strategies involve decisions relating to landed cost per unit, cost/quality balance, and various SKUs’ compatibility with supply chain parameters—transportability, packaging, serviceability. However, one thing is often missing: insights for connecting manufacturing operations with business results. Few companies excel at understanding and optimizing the business value of their manufacturing decisions.

Rare is the news day that passes without mention of the proposed Keystone XL (KXL) pipeline. In fact, just as I was about to send this article to the Logistics Management editors, news broke that President Obama rejected the proposed route for the KXL. Of course, this is not the last we will hear of the project. The route will be revised and resubmitted for review, and we will soon revisit the issues surrounding the KXL.

This past month I was in Central America working with a natural resources firm on the negotiation of terms and freight for global supply and distribution. I was reminded again of the diversity of cultures and approaches to negotiation, contracting, and price components.

This month’s cover story on the evolving relationship between Tuesday Morning, an upscale retailer with 865 stores, and its motor carrier partner is an inspirational sign of the times—and contains a theme that we may be hearing repeatedly from other shippers if the economy kicks into high gear.

Humor aside, NBC’s Saturday Night Live (SNL), logistics, and a submerged Italian cruise ship have a lot in common.

Sunday, January 01, 2012

When it comes to the oil and fuel markets, it’s been quite a year. On the supply side, the biggest story was the Middle East and North Africa (MENA) region uprising epitomized by the Libyan revolt that led to the death of Muammar Gadaffi and the shuttering of 1.6 million barrels of daily oil production.

From a business standpoint, the first 10 years of the 21st Century have been anything but normal. Economic turmoil is almost constant, currency valuations shift with the wind, and bank lending vacillates between lenient and tight-fisted.

Faced with a tight domestic transport market that includes labor and fuel pressure on carriers, shippers are inclined to leverage volume and go for extensions of past rate agreements. I would like to encourage shippers to start thinking outside the box.

Consider this post-holiday scenario: You go to return something you received for Christmas, and when you finally get to the front of the exchange line after waiting 20 minutes, a smirking face behind the counter condescendingly tells you that “all you needed to do is pick out the right size and exchange it at the regular checkout counter.”

Our January issue features one of our most anticipated reports, Logistics Management’s Annual Rate Outlook. Not only has it traditionally been one of our best-read reports—second online only to our Annual Salary Survey—but over the past seven years the related webcast has attracted thousands of shippers looking for insight into what the coming year may hold in terms of rates and capacity.