Technology: Logistics - ' Process '

PROCESS

Any effort to improve logistics through technology begins with the business processes—and the people—it's designed to transform.

The real goal of efficient logistics is demand-based replenishment, which depends on projections for demand being initiated where the goods are needed—the end customer—and rippling back through the supply chain. With that in place, the thinking goes, every supplier throughout the chain could perform the most effective action at the best possible time.

Yet that "100-percent optimized" supply chain is a myth. A supply chain is simply a series of decisions and actions, each of which can change based on new business requirements. The goal of logistics should be to increase the amount of information flowing throughout the chain, and to create the most flexible structure possible to adapt to changing conditions, rather than to drive for some fixed and unattainable level of optimization that inevitably will falter under the pressure of changing circumstances.

Unfortunately, human factors can grind even the best-designed logistics system to a halt. Suppose your grocery clerk decides to take the four different cans of soup you're buying, and scan the bar code of a single can four times. There goes your supply chain visibility—and with it your ability to effectively move the right amount of product to that store in the future. "You can have the most wonderful information system in the world," says Ed Feitzinger, senior vice president of logistics outsourcer Menlo Worldwide Technologies, "but you're still dependent on a clerk typing something in somewhere."

Ask Your Counterparts in Partner It Groups: How are you dealing with process improvements in your organization?

Ask Your Staff: What are we doing to make sure we've incorporated an understanding of human factors into the technology we're delivering?

Ask Your Chief Logistics Officer: What do I need to learn about logistics?