The News: The Logistics Institute at Georgia Tech University formally announced its program to benchmark for participating companies variability of “lead times” for international and related domestic goods movement.

The Impact: With the huge rise in offshoring, most companies do not have a good understanding of lead-time variability, which adds cost and leads to lost sales and other problems. This program can help companies better understand and manage this variability.

The Story: The Logistics Institute at Georgia Tech has announced the formation of the Global Shipment Network (GSN) Database, which will help companies better understand lead-time variability and benchmark their results against other companies.

As Georgia Tech notes, “Global enterprises are increasingly dependent on supply chains that have become longer, more complex, and more congested.  While there are very large amounts of supply chain data being collected, much of the data associated with the global shipment network is too fragmented to support either strategic decisions regarding future global supply chains or operational decisions regarding synchronized commerce.”

It also notes three major concerns:

• The future ability of the global transportation network, particularly the port-rail-truck lanes in the US, to meet the escalating demands of global commerce. 
• The threat of disruption of the transportation network, due to terrorism, weather issues, or other factors, requiring the ability to diversify routing of global shipments. 
• Recognition that lack of adequate information regarding the variability in time for product to move from its origin in one country to its destination in another significantly increases cost, strains customer relationships, and can seriously impact operations and sales

Companies can benefit enormously from better understanding the level and sources of lead-time variability. But even the largest importers often do not have their hands on good data related to lead-time performance, due in part to the complexity of the various moves and third parties involved. Don Ratliff of Georgia Tech in early research has found a substantial level of variability in global goods movement – often more than the companies themselves realized. Almost no one has a good understanding of how their lead-time variability compares to others.

In Georgia Tech’s Global Shipment Network Database program, companies will send information to a secure database about each leg in the series of moves from origin overseas to ultimate destination. The database will “normalize” the data for cross comparison purposes, and also bring in data from ports, railroads, drayage companies and other infrastructure players on events or other factors that might have impacted transit times.

Ratliff believes there are a number of benefits to companies that choose to participate in the benchmarking program. These include:

• Getting better estimates of shipment time distributions and a basis for benchmarking shipment time variability
•  Better information regarding lanes they are not currently using to determine how using new lanes can mitigate their risk of disruption
• Dramatically better data for inventory optimization and for future supply chain design and planning

Individual company data will of course be completed protected, and there is no charge for participating companies for the basic level of involvement and analysis.

To learn more, you can contact any of several Logistics Institute faculty or program managers: Don Ratliff (don.ratliff@isye.gatech.edu), John Langley (john.langley@isye.gatech.edu), or Harvey Donaldson, (harvey.donaldson@isye.gatech.edu )

Do importers need a better handle on lead-time variability? Do you think a database like this makes sense? Let us know your thoughts.