Expert Insight: The Executive View
  By Gene Tyndall  
  June 9 , 2008  

Global Logistics: Complexity is Daunting, but Leaders Excel in Costs, Speed, Quality, and Risk Management


Tyndall Offers Three Key Steps to Achieve Global Logistics Excellence

Tyndall Says:
Do not outsource management. Rather, outsource logistics operations, even some planning, and even some innovation – but keep management in house where it belongs.

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Supply Chain Digest’s Dan Gilmore recently spoke with Gene Tyndall, Executive Vice President of Global Supply Chain Services for Tompkins Associates and an SCDigest contributing editor, on several topics related to global logistics.

Gilmore: What is the number one thing most companies fail to fully appreciate regarding global logistics management?

Tyndall: Complexity - and complexity comes in several forms – costs, times, quality, cultures, and risks are the primary ones. Moving and storing goods in the global environment is 10 times more challenging than domestic.

Gilmore: What separates the leaders in global logistics performance from the average performers?

Tyndall: The leaders outperform the others in many of the major categories of costs, speed, quality, and managing risk. They measure and benchmark their performance and have continuous improvement programs in place. They do better in visibility and in customer satisfaction, and they collaborate with global trading partners and strategic customers and suppliers.

Gilmore: What are some things that even leaders need to improve on?

Tyndall: Of course, no company is perfect in its global logistics performance. One reason is the dynamics of global trade – changes in sourcing locations, customer locations, routings, customs, and best practices, all can change relatively quickly. And, currency exchanges and taxation can affect all of these dramatically. The ability to move quickly with logistics changes – to better enable changes in business priorities – is the goal and the challenge.

Gilmore: Any case examples on the challenges mentioned above?

Tyndall: Companies in all industries struggle with achieving high-performing global supply chains and logistics. Supply chains are different than logistics. But, in general, automotive companies are very global – in terms of locating assembly plants in key markets – and struggle with suppliers and parts. Footwear and apparel companies seek low-cost country sourcing, then struggle with demand planning and supplier management. High-tech and fast-moving consumer goods firms are challenged by the total landed costs required for global sourcing and distribution. Medical product companies are challenged by forecasting and high safety stocks. And all companies continue to be concerned about new selling channels and weak forecasts.

Gilmore: What three things should companies focus on to best minimize the global complexities and challenges?

Tyndall: First - plan better. Work closely with marketing and finance and others to assure that supply chains and logistics are truly set up to enable the business strategy, and grow revenues. Plan for contingencies, disruptions, and problems. Second - work with the best logistics service providers for your products and your markets. Seek and build collaborative relationships, not cost-cutting ones, in order to find win-win ways to improve both businesses. Ask your Logistics Service Providers for continuous improvement ideas and reward them for it. Third - design your best balanced scorecard and use it to manage, review, and benchmark your performance. Recognize that supply chains compete, and guide yours toward segment leadership. Delight your customers with your supply chains.

Gilmore: When should you outsource global logistics management?

Tyndall: Never. Do not outsource management. Rather, outsource logistics operations, even some planning, and even some innovation – but keep management in house where it belongs. Management has to have a seat at the executive table and a voice in the business. Outsource, as mentioned above, to the best providers in your products and markets – not necessarily the largest – and then build win-win relationships so that you both benefit.

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