Yesterday News: Change Happened
Some people think, that the fundamental task of logistics professionals is to make sure that goods get from Point A to Point B. However, many, us included would point out that it is too simplistic a summary. It conveniently excludes the long list of requirements to be met, unforeseen circumstances to be dealt with, and not to mention the cross-cultural and continental exchanges involved, that often make it seem more like getting goods from Point A to Z.
For decades, to manage this complex process, logistics professionals developed a system of spreadsheets, ERPs and SOPs. They make extensive plannings and sign multiple contracts with logistics providers so their shipment, simply put, “is being handled. Change still happens though, and it’s unavoidable.
Causes behind these changes include:
- More Complex Products – The international product development arena changes rapidly; products are becoming smarter, better integrated into systems and have to comply with increasingly stringent standards. Take the automobile industry for example. A regular Toyota consists of some 30,000 parts, each, needing a necessary nut and bolt towards its completion. As more complex requirements arise – increase in electronics parts to support safety, performance, and comfort – more complex logistics solutions are needed.
- More Remote Supply Chain Nodes – Globally, labor cost is on the rise. Instinctively, companies react accordingly, some by moving production facilities to more remote locations to reduce manufacturing cost. Today, we see demand centers in emerging markets and more remote oil locations for instance.
- Shorter Product Life Cycles – Increased competition and changes in consumer behavior are forcing companies to develop new products at a faster pace than ever before. This trend seems to be especially true in the technology sector, where customers continually want more features and faster processors. Shortening product life cycles are causing significant changes to businesses’ supply chains, Supply Chain Digital reports. The need to replace products every few years to keep up with demand. This forces companies to streamline their networks and improve their reverse logistics.
- On-Demand Production – Many companies are trying to shift from a build-to-forecast to a build-to-order discipline. Take for example fashion, consumer electronics, automotive and commercial aircraft industry.
Has Your Ad Hoc Logistics Process Changed?
Tomorrow’s News: The Rise of Ad Hoc Freight
As supply chains come under strain, the entire logistics ecosystem becomes increasingly volatile, producing a market ripe for disruption.
Our observations lead us to believe that Spot-Buy Freight will take on a key position in new corporate strategies, if it hasn’t already.
Supply Chain Managers concede that Spot-Buy Freight used to be written-off as an irregular – albeit, costly – occurrence; it was few and far between, and did not warrant a high position on the agenda of change. But as supply chain requirements change, and demands increase…
Spot-Buy has become the new norm.
Learn how you can reduce Spot-Buy Freight costs by 30% HERE.
Some people think, that the fundamental task of logistics professionals is to make sure that goods get from Point A to Point B. However,many, us included would point out that it is too simplistic a summary.