RL Bianco_JOC Review and Outlook Essay_2015
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The supply chain and logistics industry faces many challenges in 2015, including a shortage of truck drivers constraining capacity as freight volumes grow. E-commerce and omni-channel distribution are also changing how supply chains operate and are designed. This presents new challenges around securing sufficient and reliable transportation capacity at reasonable costs to keep supply chains flowing. It is also changing the nature of warehouses, with customers now seeking smaller, more flexible footprints that can rapidly respond to demand signals. While these are challenging times, it also presents opportunities for logistics providers with Lean expertise to help customers address challenges, compete successfully, and support industry growth by focusing on value creation and eliminating waste.
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RL Bianco_JOC Review and Outlook Essay_2015
- 1. Robert L. Bianco, Jr. President,MenloLogistics 2015 JOC Reviewand Outlook Essay The supply chain and logistics industry is facing a multitude of issues as we enter 2015. A worsening shortage of truck drivers in North America is constraining capacity. Trucking firms can’t hire and keep enough drivers for the freight we have today. A steadily growing economy is increasing freight volumes. And growth of e-commerce and omni-channel distribution is changing how supply chains are designed and operated. These dynamics are presenting new challenges and opportunities for logistic providers and supply chain managers. Before, customers sought us out to stand up and run traditional, centralized warehouses with sometimes millions of square feet. On the transportation side, our job was to assess their freight flows and networks, and “optimize” transportation spend for lowest cost. The paradigm has flipped. The discussion today around transportation management has shifted from one of “optimization” to “capacity management,” the objective being to secure sufficient, reliable capacity, at a reasonable cost, to keep supply chains flowing. Omni-channel and ecommerce are changing the nature of warehouses. The ask from the customer now is around speed and flexibility, seeking smaller warehouse footprints that can be brought up (and taken down) rapidly in response to regional demand signals and trends such as nearshoring; the goal being to respond to and fulfill customer demand faster and more accurately. While we are in challenging times, it is, however, also a market of opportunity -- for those 3PL’s that have embedded deeply into their culture Lean expertise, tools and resources. By deploying our Lean skills, focusing on creating value, eliminating waste, and helping our customers manage strategic and tactical changes effectively in their supply chain, we can help our customers address their challenges, compete successfully and support a growing and prosperous industry.