Strategic Profile: Logistics
The New Reality for Customer Engagement
DSC Logistics, a 42-year-old logistics provider based in Des Plaines, Ill., operates 13 million square feet of warehouse space across the U.S., and manages the entire logistics process for such companies as Kellogg Co., Kimberly-Clark Corp. and Unilever/Best Foods N.A. Jon Fieldman, DSC's vice president of enterprise integration and CIO, chatted with CIO Insight about the difficulties of integrating logistics processes.
Managing constantly changing supply chains is a tough job. What should the CIO's role be in that process?
The CIO is in a unique position to lead the change management process. One key part is to be a two-way translator between the continuously changing world of information technology and the strategic objectives of the company. The CIO needs to ensure that the information technology investment of the enterprise is deployed to optimize those strategic objectives.
How clearly should efforts to upgrade logistics be tied to those strategic objectives?
The old adage is: "Whatever gets measured is what gets managed." So clarity with respect to goals is essential to measuring their performance and achievementinventory accuracy, order accuracy, on-time delivery, reducing inventory carry costs and so on. Thus the CIO needs to support not just operations but the measurement of operations. This requires the ability to capture, report and analyze this data so it is consistent across the enterprise.
What's the biggest stumbling block for companies trying to upgrade their logistics?
A very big challenge for our customers is to take a holistic view of their cost structures. Increasingly, the ability to have information about your chain is critical to the quality of your decisions. For example, knowledge about future orders (i.e., demand) allows you to plan more optimal inventory levels and space needs, and knowledge about order flow each week or month allows you to plan more optimal labor levels.
How can CIOs overcome such difficulties?
The key for a CIO's success with respect to any significant logistics upgrade is to facilitate the human integrationthe participation, alignment and effective collaboration of all the significant playersupon which such an upgrade depends. This includes the external customer and all affected internal business units, as well as corporate support functions. All these people need to be aligned with respect to key knowledge, mental models and action plans. CIOs have the opportunityand the responsibilityto play a leadership role in making this happen.
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