LOGISTICS,
THE BEGINNING OF THE NEW POTENTIAL
Executive
Summary
Too often, business is viewed from the “oversight or high level”,
consequently not enough attention is given to the critical operating
components necessary for growth and ongoing performance.
The speed at which events occur sometimes causes us to lose
sight of the critical micrologistics components necessary for
logistics excellence and commercial success.
Sight may also be lost with respect
to the impact that each functional responsibility, micrologistics
component or department has on each other and therefore the company
as a whole.
The corporate view from the logistics perspective offers every
enterprise the opportunity to identify and recognize each department,
discipline and respective relationship. By understanding these
relationships and managing them effectively, the corporate enterprise
immediately gains an excellent resource. This resource can become
an entirely new and highly energized “corporate knowledgebase”.
In order to harness this energy and focus its attention on business
challenges, we must accept that interdepartmental and interdisciplinary
relationships must exist. Next, a process should be created that
will channel the challenges through the corporate knowledgebase.
In addition to the standard dictionary definition of logistics,
“managing the flow of raw material through the finishing process”,
it could be said that, “Logistics can manage, integrate and control
the flow of information, material and money”. In our previous
white paper, “The
Dichotomy of Logistics” we established the two primary
components of logistics:
Macrologistics is the study and management of the overall aspects,
process and workings of logistics
Micrologistics the study of the operations and the application of
the components of logistics, such as transportation, inventory,
warehousing, purchasing and customer service
By understanding the two primary components, it becomes clear
that they are highly capable of managing and operating complex
relationships simultaneously. Micrologistics components give
macrologistics its pervasive license to transport itself across
and through every department, both internal and external.
The
Purpose Of This White Paper is to demonstrate the importance of macrologistics
and micrologistics as both a resource for corporate performance
and as a tool for assisting management in identifying, recognizing
and understanding the interdepartmental and interdisciplinary
relationships and corresponding benefits.
Description
of the Situation
Business is dynamic! As each element changes so will the business!
For this reason alone, each professional practitioner must understand
and appreciate the importance of their role and relative role
in driving corporate performance and success. Even though reporting
responsibilities are usually identified, recognized and followed,
it is highly probable that the original interdepartmental and
interdisciplinary relationships initially responsible for the
growth, development and success of the company are no longer known
and therefore incapable of being practiced. This esoteric loss
manifests itself in a multitude of unknown disconnects which seriously
affect corporate performance. As time goes by and events occur,
the distance between the company’s operating departments causes
the disconnects to widen to such a point that effective and meaningful
discussion becomes less and less achievable. This loss perhaps,
is one of the most significant obstacles to harnessing the intellectual
resources necessary for achieving excellence.
The
View from the Macrologistics Perspective
In our white papers, “Logistics
is not a Chain” and “The
Dichotomy of Logistics”, we identified and spoke to
the two primary components of logistics: Macrologistics and Micrologistics
(MML). When consideration is given to all of the micrologistics
elements and the multitude of sub-elements, it should be clear
that interdepartmental and interdisciplinary relationships are
achievable and they are also manifold. Implementing a sound macrologistics
strategy coupled with the appropriate micrologistics components
should identify and continue to identify the critical interdepartmental
and interdisciplinary relationships that are responsible for corporate
performance and success.
When a company is viewed through the macrologistics perspective,
the interdisciplinary and interdepartmental connects and disconnects
are highly visible and obvious. The high visibility gained through
this perspective is actually achieved by virtue of the pervasive
ability of the micrologistics components, such as transportation,
to penetrate departments and disciplines, both internal and external.
As an example, product shipment involves, at least, three entities,
the shipper, the consignee and the carrier. By tracking the data
and information of a shipment transaction across and through these
entities, the various departments and disciplines that are involved
become obvious.
Micrologistics
and Interdepartmental and Interdisciplinary Relationships
Because business is dynamic it is dependent upon the interaction
of a multitude of events, functional performance and the inter and intra-departmental and inter and intra-disciplinary
relationships and of everything relevant between the vendor and
the customer. Therefore, a sound corporate strategy is required
that is capable of continuously processing information that is
collected in the transaction stream. The dynamics can then be
effectively understood and managed. Because MML is a focus through
which continuously refreshed data flows, coupled with its ability
to manage complex relationships, it is best positioned to address
these concerns. The relative position of the Logistics Department
as it relates to the entire company and its role as a functional
provider of services, such as transportation, allows it to deliver
information to the corporate knowledgebase and report any deviations
rapidly. As an example, a consulting engagement with a prominent
cosmetic and fragrance firm demonstrated that failure to include
the logistics discipline into the corporate knowledgebase resulted
in an immediate report. However, the damage had already been
done; the promotion was complete and ready to ship.
Failure
to recognize the importance of interdisciplinary relationships
resulted in an unnecessary freight expense in excess of $1,000,000.
“It is very typical for the Sales and
Marketing departments to develop promotional products. By the
time the promotion was ready for shipment, the Transportation
Department discovered that the packaging for express or parcel
mode exceeded the maximum size requirements by two (2) inches.
Consequently, the promotion was forced into motor freight transportation,
and each of the thousands of shipments incurred a minimum charge
that far exceeded the cost for express or parcel service.”
Departments within an organization must be held together.
How they are held together is one of the key challenges that every
administration must effectively deal with. If an organization
believes that glue is the agent, others might believe that it
is too binding and therefore restrictive. On the other hand,
if the cohesive agent is fluid, one that lubricates the process
and also has the appropriate binding capacity to allow reasonable
freedom so as to achieve the flow of information, the probability
of utilizing the relationships effectively is significantly increased.
Micrologistics
Provides New Opportunities
Logistics, for many years, existed and perhaps continues as
an oversight or high level understanding of a business process
or operating component that remains, by performance that which
only describes an entire process. For too many, this word remained
and still remains “bundled” and accepted singularly as a complex
process. In an attempt to better understand and to apply the
principles of logistics, some clever people conceptualized “logistics
as a chain”. However, as shown in our white paper, “Logistics
is Not a Chain” we presented the natural dichotomy of
logistics. By breaking logistics down into its two primary components,
MML, logistics practitioners have been given a new freedom and
ability to better understand and utilize more of the discipline
and in more ways than ever before.
With the restrictive chain being thrown aside, transportation,
as an example, is now a micrologistics component and it is therefore
capable of taking on far more meaning than it had in yesterday’s
role. In one of its new roles, it can be a “penetrator” that
is a device that can travel through and across departments and
disciplines, placing and extracting data and information, but
always collecting and processing as it moves. By studying and
managing the overall aspects, process and workings of the transportation
component, macrologistics is positioned to identify, recognize
and understand the inter and intra-departmental
and inter and intra-disciplinary relationships.
Logistics,
Managing the Flow of Ideas and Information
Macrologistics and micrologistics, has positioned us to understand
that logistics is not only capable as a business tool in its traditional
form; it has allowed us to understand that, as a discipline, it
could be used to manage the flow of information, and the flow
of ideas. After all, since we know of its performance ability
to manage the flow of raw material through the finishing process,
it is not a quantum leap to consider the process as being capable
of managing other flows. Logistics’ inherent ability to manage
complex relationships simultaneously, clearly makes it the best
candidate to identify and manage inter and intra-departmental
and inter and intra-disciplinary relationships.
In order to achieve and sustain success, the logistics practitioner
must be fully conversant, at all times, with the MML process and
components. Their recognition of the component coupled with their
understanding of its function along with its relative role within
the company provides a perspective uniquely available to the logistics
professional. This perspective empowers the practitioner with
the ability to identify, recognize and understand the
inter and intra-departmental and intra-disciplinary relationships.
The natural advantage of this process enables optimization of
the corporate knowledgebase.
Conclusion
Logistics is a highly robust business discipline capable of
providing industry with important tools and a new corporate knowledgebase.
Its inherent capabilities offer industry a platform from which
the intellectual promise of cross cultivated intelligence can
be realized. This fresh look through the newly discovered macrologistics
management process and the micrologistics components, coupled
with the pervasive nature of logistics identifies the internal
and external interdepartmental and interdisciplinary relationships
capable of driving the next wave of successful companies.
Continuation
Please consider this white paper as a continuum in this subject
area, succeeding white papers will address common issues and address
them with common solutions. We encourage our readers to
direct any specific questions or comments to
papers@transportgistics.com
Disclaimer
The information presented herein represents
the opinion of the author but not necessarily the opinion of TransportGistics,
Inc. nor is it presented as a legal position or opinion.
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are reserved. The authors of the articles retain the copyright
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authors and/or TransportGistics, Inc. (papers@transportgistics.com)