Action item: Supply chain challenges make "Logistics Playbook" a necessity

With 19.5 percent of companies reporting little to no integration of supply planning systems, and 10.8 percent of companies confirming their transportation and distribution functions are separate, the need for a playbook to strategically align logistics and transportation is of high importance.

10/24/2007



So says the 16th annual Logistics Playbook , a report coauthored by Capgemini U.S. LLC , Georgia Southern University, and the University of Tennessee.
Logistics Playbook results were released at the Council of Supply Chain Management Professionals annual conference, during which 1,376 supply chain executives from numerous industrial sectors participated in the study.
The 2007 report lays out a playbook of actions to take based on market situations and company profile. The focus of the report is on three functions: sales & operations planning, distribution management, and transportation management. With 19.5 percent of companies reporting little to no integration of supply planning systems, and 10.8 percent of companies confirming their transportation and distribution functions are separate, the need for a playbook to strategically align logistics and transportation is of high importance.
The report concludes that the playbook for a company should be based on a number of characteristics that include size, financial performance, visibility into the supply chain, and strategy. However, there are four overarching plays that most companies should take in some manner:
1. Understanding how your supply chain meets the needs of customers.
2. Recruiting the best talent, and giving them access to real-time information.
3. Working together with customers and suppliers on logistics-related tasks. Participants suggest they spend 10 percent or less of their time collaborating with customers, suppliers, and other departments across the company. 4. Using a few key metrics.
Says Peter Moore, Supply Chain Services Leader for Capgemini, "Globalization and economic shifts have made supply chains too complex to manage without strategic planning and a playbook that accounts for different possible situations."
Other key Logistics Playbook findings:
• In 2007, 29.2 percent of participants said they spent more than 5 percent of sales on domestic transportation.
• For all the different categories of Strategic Planning and Operations information, 70 percent or more of respondents receive information in real time, or are updated daily.
• Only in 36.6 percent of the cases does a single manager control both transportation and distribution, while 43.7 percent of all distribution volume is sent directly to the customer.
• The biggest companies—those with $3 billion or more in annual sales—have more integrated systems across all functions than small and medium-size companies report.
"While leading companies have turned complexity into competitive advantage, many have made little progress over the past six years in integrating basic logistics processes," says Karl Manrodt, study coauthor and Associate Professor of Logistics at Georgia Southern University. "This is not a reflection of the lack of technology; to the contrary, software capabilities have improved greatly. What is missing is taking a true process view of the organization's internal and external processes, and the ability to manage them."
The full 2007 Logistics Playbook is available online at Capgemini U.S. LLC .





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