Dont You Like the Other Logistics Approach?

    November 5, 2004

The lose-no-matter-what-you-do predicament occurs in business as it does in domestic life. The joke about the fellow whose wife bought him two ties, and when he came down the stairs wearing one of them got caught with the question, “What’s the matter – don’t you like the other one?” rings familiar. Especially in the world of logistics, where fads in methods come and go seemingly according to consultants’ need to drum up new business, it’s hard to know which logistics method is best and when you’re better off staying put rather than moving from one to another.

After a particular approach comes and goes there’s usually a “back to basics” period in which the focus is on execution of fundamentals. In some ways the current “Lean” philosophy speaks to the desire to get rid of the fluff and do the base processes right. Even with the fireworks surrounding RFID, that appears front and center in every logistics publication and is being pushed by the biggest players in the game, many companies are taking a jaundiced view toward something for which the flame hasn’t lived up to the smoke.

For companies that see the value in fundamentals, there’s a layer of activity that is often overlooked but that opens the door to intriguing logistics opportunities. Most logistics is based on packages – the cartons, bottles, bags, or other containers that products are held in. The entire logistics activity is built around the packaging as well as packaging on top of packaging – product goes into bottles that go into cartons that go onto pallets that get wrapped or go into containers. Such supply chains ignore the product, and are built to hold and move packages in their various forms.

Companies less often look into the logistics characteristics of the products themselves. An example of a product-based logistics approach is the creation of a supply chain for liquids or similar products that share specific logistics characteristics. The difference in logistics is as basic as the difference between solids and liquids – and the way those differences are translated into logistics terms. A liquid product treated logistically as a solid – by putting it in a package – leads to a completely different logistics solution than the same product treated as a liquid. These differences are outlined at and described in detail in the book “Supply Chain for Liquids: Out-of-the-Box Approaches to Liquid Logistics” published by CRC Press.

A fundamental look at logistics, and the core changes that it can lead to, has an impact far beyond the Operations department of a company. Changed logistics provide new marketing opportunities that can have strategic implications for a company, and the financial impact of product-based logistics can also be a powerful business tool. Such a basic approach as building a supply chain for liquids or other specific types of products doesn’t “tweak” an existing system, but rather takes the core building blocks and assembles them into a logistics flow that is most effective for the company’s needs.

When faced with the choice of which necktie to wear – which inventory or logistics trend to follow – the best choice may be to leave the tie off altogether. Not only do you create a new alternative, but you can breathe deeper and focus on the basics that are essential to your success.

Wally Klatch has over 25 years experience in industry both as a management consultant with global and regional consulting firms and in executive positions of production and distribution firms. His primary focus is on the application of innovative techniques and technologies to manufacturing and distribution environments, both within companies and throughout the supply stream. His book Supply Chain for Liquids: Out-of-the-Box Approaches to Liquid Logistics is being published as part of the St. Lucie Press Series on Resource Management. Klatch received his MBA degree from Purdue University and may be reached at .