With the New Year comes new resolutions, and like many of you I have made a resolution to lose some weight. My quest led me to read Michael Pollen’s book Food Rules, which provides a healthy approach to food and diet. I really like this concept of “simple to live by” rules, and it got me to thinking about whether there are such rules for logistics. So here are a few simple rules of my own applying to logistics, and I encourage you to add your own to the list.
Good people mean good results. Talented, inspired people left to do their job will result in excellent outcomes. When all is said and done, the team with the most talent wins the game. This applies in sports, and it applies in business. But it’s not only important to have talented people, because it’s equally critical to create an environment where they can succeed. This means eliminating roadblocks to their success. One rule of thumb for any manager is to always hire people who are smarter than you are.
What gets measured gets done. We need to keep score to know how well we’re doing. Publish the score, and challenge your logistics team to do better.
You get what you pay for. Needless to say, if a quote is way low compared to others, be aware. It just might be an indication of hidden costs not explained upfront. This leads to the next rule…
The devil is in the details. The more details you obtain in a quotation, a plan, or a schedule, the more likely it will reflect the true cost of the transport. The details also matter when it comes to executing a transportation project. Lack of details in communication and documentation can often slow down or stop a project.
See the forest from the trees. Often we are so focused on optimizing a single detail of a transportation project that we end up sub-optimizing the entire project. The project needs to be optimized in its entirety. That may mean not any single detail is perfect, but the sum of the parts are greater than they are individually.
There is a reason it’s called a supply chain. The chain is only as strong as its weakest link. Find that link, and strengthen it.
Understand the demand. Logistics is essentially the tool that moves goods within a supply chain, but there is no supply chain without demand. Some need, requirement, or request is driving that cargo along the supply chain. The better you understand the demand, the better you can execute the logistics.
It’s not how well you hit your shot after a good shot but how well you hit your shot after a bad one. I need to give credit to my father for this one. It originally applies to golf, but it has a direct correlation in logistics. There will be problems with any transportation project, but how well you recover will be the indicator of success.
Moving costs money, not moving costs even more. At least when you are moving something, you are making progress. Not moving something, however—which is called demurrage or detention—also incurs costs, and it is not moving. Be aware of potential pauses and queues in the project that will lead to demurrage charges. Knowing upfront what these potential stoppages are will help you to mitigate costs later.
Make sure the present is wrapped. Cargo has to be properly packaged to insure proper shipment. I have witnessed delays and damage due to having cargo not properly packaged for the method of shipment.
We are going to save money no matter how much it costs. I actually had a manager tell me this once. It stopped me cold, and I just couldn’t find an appropriate response at the time. But the truth is that what we think is cost savings ends up costing more in the long run. Thoroughly analyze cost savings suggestions to make sure they really are saving money and time.
For my final rule, I give credit to my mother: Things are never quite as good or quite as bad as they seem. Keep perspective when doing logistics projects. Understand what is going on during a project and strike a balance. Be humble during the successes, and learn from the failures. I listed 12 simple rules, and I challenge you to add your own and follow them in 2012!