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NO FUTURE IN THE PAST?

Definition of logistics from 1980
logistics n.pl. [with sing. v.] the branch of military science having to do with procuring, maintaining, and transporting material, personnel, and facilities.

Definition of logistics from 2000
logistics n.pl. [with sing. v.] the process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.

Upon reviewing the above interpretations of the term logistics, it is easy to see what a difference twenty years can make. Over the span of the last two decades, the word has not only taken on an expanded value, but has heavily impacted the manner in which business is done throughout the world.

Instant gratification is no longer good enough for the average consumer. The technological advances made during the past quarter century have made it virtually mandatory to know what the customer wants before they do. And because the Internet has enabled quicker methods of ordering goods and services, it has become more difficult to predict the future.

While pondering the future of warehousing, I am reminded of the title of an old song, "There’s No Future in the Past." In essence, that is true of many things, but no truer words could be said for the logistics arena. To be able to face the everyday challenges of our industry it is important to have infinite foresight.

Today’s business leaders must take on the persona of a clairvoyant. They must sense the needs of their customers, and via some magic carpet, have the product arrive at their receiving dock almost as soon as the transaction data has been entered into a computer.


Myth-
"Bad planning on your part does not constitute an emergency on my part."

If you can remember hearing this, you have been working in the industry for at least ten years because people could get a laugh using that quote back then. If you were to use that in today’s economy, it would be wise to update your resume, pack up any personal possessions that are kept at work, and be prepared to see your boss within the next few moments.

Sometime around 1990, it became increasingly more complex to please the customer. It suddenly transformed into a science, much the same practice utilized by the military, as seen in the 1980 definition given earlier. If a customer needs a specific product immediately, it indeed is an emergency for them. So you should be prepared so that it is not an emergency for you.

Being proactive is a must to stay alive in the fierce atmosphere in which we work today. Emergencies should be few in order to maintain the upper hand on your competition. Therefore, a strong leadership ability and grace is mandatory to convey to both your staff and superiors in the presence of such issues.

A customer comes to your company because they want and trust the product or service you provide. When they place an order with practically no lead-time, they expect to receive their order rather than excuses. You cannot maintain a business selling excuses.

So no matter how bad the customer’s planning may have been, you need to be prepared to react rapidly. The tools available today provide the resources to handle such emergencies.

Myth-
"The shipping department doesn’t generate dollars"

This old line should be long gone. They are the last people in their company to be able to make the customer happy and maintain a successful relationship. In fact, a shipping department is now headed by someone who has to be fully knowledgeable of all the industry trends. His employees must have a higher level of understanding in modern warehousing terminology and practices than ever before. No longer is the department run by a cigar smoking, hotheaded "warehouse guy" who has had more than his share of meals. Today’s "warehouse guy" could easily be confused for someone on a golf course.

Shipping managers, or warehouse managers, have come to be known as logistics directors, or something very similar in name. They must lead meetings showing future strategies to reach their company’s customer base as opposed to taking notes on what order has to go out by five o’clock. They now make the important decisions.


Myth-
"Anybody can work in a warehouse"

It used to be thought that the warehouse was a cave behind the offices. A customer would place an order to someone in the office, some guy in the cave would print the order, a warehouse guy would pick and pack that order, and finally another cave dweller would put it on a truck.

Upper management used to believe it was as easy as slapping a label on a box. Now, they realize that the warehouse staff must be properly educated and well versed in all practices and terminology. Sure, someone has to slap a label on a box to some extent, but if it is the incorrect box, you have already fallen behind the competition.

If your company plans to be competitive in today’s market, the available technology offered virtually forces you into making a transition toward automation, or upgrading the automated systems in place. You must also be able to employ a crew that can operate in such an environment, meaning either you have to hire someone with prior experience, or have a solid and consistent training program in place to maintain a seamless operation.


Myth-
"Automation will eliminate the need for human labor."

No it will not. This has been said for at least a half century, and has never, nor will it ever be reality. It decreases the number of people needed in many cases, but someone has to work at the factory that creates the automation. There will always be a need for human labor.

They may be put out of work in their old capacity, but labor shifts to another department may be an option. Quite often, a transition to automation means a particular task is replaced while another task must be implemented to support the new methods.

Of course, automation is making human processes easier to accomplish. It allows business to happen faster. However, the more technology that is utilized, the more people are needed to keep automation manufactured. There will always be a happy medium between humans and automated processes.


Myth-
"The Internet will change the way business is done."

Actually, it will to some degree, but not to the extent that it will hurt the industry. The only thing radically different thus far is the ordering process. Rather than going to a store to buy what can be in someone’s hands today, consumers are logging onto their home PC, and ordering for delivery.

There still have to be fully functional distribution centers, highly dependable modes of transportation, and anything else that was in use before the Internet. Some have forgotten the reality that you still have to manufacture, store, and distribute using a factory, warehouse, and a vehicle of some sort. I have yet to see a computer cable that could accommodate the movement of goods through them.

The last few years have seen several high profile Internet companies come and go, some faster than a Randy Johnson fastball. It is one thing to have the knowledge and investors to start a company online. It is completely different if it is not operated as a normal distributor, whether automated or manual. It seems some of these upstarts lacked enough forethought to include logistics experts in their planning, or lack thereof.


If you are reading this, it is safe to assume you attended the Warehouse of the Future 2001 trade show. Apparently you wanted to see what is available to you presently or what may be an option for your future growth. However, if you have not yet experienced a venture into the automated systems, please be aware of possible pitfalls.

For instance, before becoming a consultant for the FSL Group, I worked for a company that operated its distribution in a manual fashion. I had previously worked in heavily automated situations, so this was a return to my original surroundings. We had several distribution centers strategically placed throughout the country, and I was asked to come in and clean up the main hub.

A few months after I came aboard, we were bought out by a company who had kid in a toy store dreams. I was no longer the decision-maker I was brought in to be, and answered to a person who wanted all the latest toys. I knew we were not ready to be automated, but he was convinced it was a move that had to be made to grow the company.

About six months later, we purchased all sorts of tools that were supposed to make our lives easier. Within eight months, implementation was complete. Then, one year later, we finally got ourselves cleaned up from the disaster technology had created because we had not been prepared fully for the new systems.

It cannot be stressed enough how important it is to have all your manual processes in order before embracing automated systems. A move to these tools can bring a company to its knees. In the case of my previous situation, it did.

Three months after we had gotten the company back on track, it went bankrupt. We had lost customer confidence because of the setbacks. I had only begun to fix the manual operations I was brought in for when the takeover occurred. I believe to this day that they would still be in business had the transition followed a gradual path.

This experience convinced me to become a consultant in order to assist clients under manual operations not to make a rush decision into going to automated processes. Yes, technology is great, and there are wonderful options available. But if your company isn’t fully prepared for such a project, things can go horribly wrong.

If you have not yet integrated automated systems into your company, but are looking to do so, you must be knowledgeable of what to look for. It can be confusing to comprehend exactly what you may need to make such a transition go smoothly.

When choosing which tools to utilize, you should approach your homework very unbiased. Take in every bit of information from the salesmen and consultants you meet with. Read everything in print, then go back and read it all again. Be objective.

Also realize that if these individuals are working for the company selling the actual services, bring in a completely objective entity (insert shameless plug here) such as the FSL Group. We don not manufacture or sell these products, therefore we have nothing to gain or lose. However, we know the products and have a strong network of alliances whom we trust to provide you with exactly what you need to stay on the cutting edge.

Be careful not to let automation rule the future of your company rather than enhance it.

Rich Tate
the FSL Group


Please direct any comments or questions to rtate@fslgroup.com



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