Smart supply chain professionals make the most of transportation and logistics
When APICS was founded, the organization’s original logo was a stylized representation of an automobile rear axle and differential. About 60 years later, the movement of products from point A to point B (and often back to point A again) via planes, trains, trucks, and more remains an integral part of supply chain and operations management.
The merger of the American Society of Transportation and Logistics (AST&L) with APICS further illustrates the stature of these essential distribution resources. The key message is this: Production and inventory control is not an island. We depend on the effective functioning of the inbound and outbound supply chain in order to deliver customer value. In other words, transportation and logistics is an integral piece of the global supply chain puzzle, and organizations can only meet today’s business challenges if they take into consideration the full, end-to-end supply chain.
The shift of vision from the plant to the supply chain as a whole is not really a change but, rather, a broadening. It is the recognition that what a customer buys is not just a product but an entire experience. Think about the definition of a perfect order from the APICS Dictionary, 14th Edition:
“An order in which the ‘seven Rs’ are satisfied: the right product, the right quantity, the right condition, the right place, the right time, the right customer, the right cost.” The plant can’t do all that by itself.
Success in manufacturing, or any other business, demands professionals who recognize and cater to the customer’s perception of value. If customers are unwilling to pay for something (the ultimate measure of value), then it’s simply not worth doing.
Conversely, anything we can do to enhance customer value will encourage sales, revenue growth, and satisfaction. There isn’t a product on the planet that is purchased strictly on the value inherent in the physical item all by itself. Price, promotion, and place all play crucial roles.
As you deal with everyday internal issues such as production schedules, material availability, and planning, don’t forget that we all are a part of the global supply network. Our friends in transportation and logistics are critical to delivering the value that our customers expect. Winning supply chain management is all about coordinating activities with these partners and collaborating for improved performance.
Enterprise Insights by Dave Turbide, reprinted with permission from APICS magazine | Sept/Oct 2015