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Logistics is invisible, until it isn't . . .

By Mike Rudolph | 01/09/2017 | 12:26 PM

Logistics is invisible, until it isn’t . . .

A good logistician operates out of sight. A great one is like the Wizard of Oz, orchestrating an amazing choreography somewhere behind the curtain. The fact that great logistics and supply chain functions are generally “invisible” is also a double edged sword. Since logistics and supply chain operations are mostly “invisible,” where do you find the next generation of talent needed to run them?

We’re all familiar with our UPS, FedEx, and USPS deliveries. We all love the real-time notifications and status updates they provide. For the most part, what goes on behind the scenes is invisible – not that that’s always a bad thing.

The instant gratification embodied by the internet and retailers/suppliers is something we all take for granted. The logistics we depend on gets little visibility or attention when it’s working well. We now expect and demand responsive “click-to-bang” order fulfillment and a simple returns process when purchasing items, both in our personal and professional lives.

How all that “logistics” stuff really happens is mostly “invisible” to consumers and customers, but is always on the boss’s radar. In my former life, during combat deployments in Southwest Asia, my boss – in military parlance the Commanding General (CG) – was very dependent on what was going on behind the logistics curtain. And, he appreciated the fact that we did our very best to keep logistics out of sight and out of mind: effective, invisible, and very rarely an issue that negatively impacted operations.

That’s hard to do when your “customers” are always on the move, with no fixed address, and the bad guys are trying to blow up your trucks and disrupt your ability to operate and deliver, if you know what I mean.

As we were finishing our year-long tour of combat duty in Western Iraq, the CG told me that the logistics we provided gave him and his subordinate unit commanders “operational flexibility,” magic words to a military commander. That flexibility made a quantifiable difference in mission success. It meant battlefield commanders got what they needed, when they needed it, where they needed it, and how they needed it, sometimes before they knew they needed it.

Every day Marine Corps and other military logisticians embrace the concept of “Improvise, Adapt, and Overcome,” as they provide logistics support to meet the demanding and ever-changing requirements on the battlefield.

You may have some similar challenges, but obviously under very different circumstances. . So, how do you find the talent needed to work in this mostly behind-the-scenes, but critical component of order fulfillment? Where can businesses go to recruit the talent necessary to perform the logistics functions they depend on to meet and exceed customer and internal requirements?

I suggest you consider tapping into a talent-rich pool of available logisticians that you may not be aware of . . .consider looking for and recruiting Marines, Soldiers, Sailors, and Airmen heading back into the private sector. There are literally hundreds if not thousands of well-trained, disciplined, and globally experienced logisticians transitioning out of successful military service every month. Consider taking advantage of these highly skilled and knowledgeable resources – I think you’ll be pleased with the performance, leadership, experience, and can-do approach they bring to the table.

Semper Fidelis

A reminder of how far we’ve come

By Mike Rudolph | 08/10/2016 | 3:19 PM

A reminder of how far we’ve come

Many people link FedEx to the birth of air freight for the masses, but for me it brings up different images.  When FedEx delivers to my door I think of the Berlin Airlift in 1948.  I’m also reminded of the extensive logistics capabilities that have historically provided our nation the ability to rapidly project humanitarian and security capabilities across the globe in response to crisis situations.

After World War II, the U.S. fed and supported the besieged city of West Berlin using air freight, and air freight alone.  Tempelhof Airport was an air freight hub long before FedEx fired up Memphis.  Since then, the U.S. has repeatedly demonstrated the capabilities and agility of logistics to strategically and tactically move people, equipment, and support assets to emergent locations, in the required configuration, and at the right time.  These examples from our past have demonstrated the awesome power of what air freight and smart logistics could do. 

Last week, I was driving home from a vacation at Rehoboth Beach and saw the sign for the Dover Air Force Base Air Mobility Command Museum.  My Dad is a retired Navy Master Chief and was a flight engineer on C-54s  (military version of a DC-4) and C-118s (military version of a DC-6), cargo haulers for the U.S. Navy during the 50s, ‘60s, and ‘70s, so I stopped in. 

The AMC Museum has more than 30 aircraft spanning the past 80+ years, mostly cargo haulers but also a B-17 and some fighters and helos.  I’ve flown on several of these birds, and I most certainly depended on receiving logistics support from many of the others during my numerous deployments across the globe throughout my 30+ years on active duty as a Marine. 

After my visit at the AMC Museum, I reflected on how far we have progressed in the past 80 years.  Think about the payload capacity and speed & range available with a C-47 Skytrain (DC-3), the workhorse predecessor of the C-54/DC-4 Skymaster, compared to the enormous capacity and speed/range of the C-5 Galaxy

  Payload Cruise Speed Range
C-47/DC-3 6,000 lbs 160 mph 1600 mi
C-54/DC-4 28,000 lbs 190 mph 4000 mi
C-5 264,440 lbs  586 mph 3,700 mi

 

For a big portion of the mid-twentieth century the C-47 Skytrain (DC-3) was state of the art for moving cargo by air.  But the rapid acceleration of capacity and reliability in the following decades exponentially improved the ability to move cargo and improve delivery times as we reaped the benefits of technology and process improvements.  Now we experience almost instantaneous delivery after clicking on an icon on our computer or in our inventory management system.  A good many of these delivery performance improvements are a result of our national defense investments and mechanisms. 

In both our work and personal experiences, when we place our orders and can receive exactly what we ordered in 24-48 hours or less, we should be mindful about how that capability came about. 

It’s not a stretch to say that Amazon, FedEx, and contemporary logistics in America have their roots in the military, not Memphis.

Semper Fidelis

They haven’t forgotten us. Have we forgotten them?

By Steve Geary | 03/30/2016 | 2:02 PM

On March 25, 2016, the New York Times reported, “Since March 2014, the Islamic State has carried out or inspired at least 29 deadly assaults targeting Westerners around the world, killing more than 650 people, according to a New York Times analysis of such attacks.”

Apparently the Times has grown bored with the slaughter taking place outside of Europe.

On March 26, PBS News reported, “The Islamic State has claimed responsibility for an attack at an Iraqi soccer stadium on Friday that killed 41 people and wounded dozens more.  A suicide bomber struck in the small town of Iskandariyah about 30 miles outside of Baghdad as trophies were reportedly being handed out to soccer players by local officials.” 

The Friday that the PBS News cites was March 25, the same date that the New York Times chose to focus on terrorism in Europe and ignore what was happening in Iraq.

Does the Times think we no longer care about terrorism and death in Iraq?  Are deaths in Iraq, Afghanistan, Pakistan, North Africa, and all the other places outside of Europe where ISIS has launched affiliates somehow irrelevant?  Does the Times really mean to minimize the importance of terrorism outside of ‘the West?’

ISIS is a logistics problem, folks.  We are dealing with a network, not a bunch of nodes.  To deal with ISIS in Europe, you have to deal with it everywhere else, too.   The ISIS logistics problem also creates a heightened need for security measures in our own global logistics and distribution networks.

If you are reading this column you are likely involved in logistics, and probably in North America.  You should be nervous.  I am.

I spent a lot of time on the ground in Iraq.  To be precise, I spent lots of time in Iskandariyah - where the latest atrocity occurred - during the dark days.  In 2006 and 2007, when I was part of a group operating in and around Iskan, we wore full battle gear.  We approached the challenges of peace and stability as a network problem.

It worked.  We starved the terrorist net by building an industrial net, a set of supply chain activities that generated jobs and hope, and stability broke out.  In March 2008 Senator John McCain, then a candidate for president, was able to visit Iskan. 

The Senator didn’t have to wear armor as he walked through the public market.

I have a very dear friend from those days who still lives in Iskandariyah.  Quoting from an email he sent a few days ago – to the man I worked for in Iraq, “Thank you for joining us in our grief and sympathy toward the tragic incident in our city.  We are so grateful to your efforts during your time in Iraq.  Special thanks to the American's for their support and for the souls of the martyrs of the Iraqis and the Americans who sacrificed their lives for the ideal concept of democracy.”

Please don’t forget our Iraqi friends.  They haven’t forgotten us.

In September of 2008, DC Velocity published an article on the work in Iskandariyah.  Click here to read it.

 

Rare Earth: Where national interests and the global supply chain collide

By Steve Geary | 03/23/2016 | 10:39 AM

If you live in Manhattan, rare earth is what you call any patch where something green is growing. 

If you’re old enough, you may remember the band Rare Earth, who had a big hit, “Get Ready,” a song that was massacred by bands at just about every high school dance in America.

To industry, rare earth means something completely different. Rare earth metals are a critical input to many manufacturing processes. From golf clubs to electronics to fighter aircraft, rare earth elements are virtually irreplaceable inputs.

According to the Rare Earth Technology Alliance, an industry association, rare earths “are a series of chemical elements found in the Earth’s crust that are vital to many modern technologies, including consumer electronics, computers and networks, communications, clean energy, advanced transportation, health care, environmental mitigation, national defense, and many others.”

According to Namibia Rare Earths, Inc., a mining company, rare earths are used in high-intensity street lamps, lenses, battery electrodes, catalytic converters, colored glass, steel production, super-strong magnets, welding goggles, lasers, microphones, hybrid automobile motors, nuclear-reactor control rods, color TV screens, fuel cells, sonar systems, hard-disk devices, transducers, signal amplification for fiber-optic cables, metallurgical uses, high-temperature superconductors, LED light bulbs, and integrated circuit manufacturing.

It isn’t really a stretch to say that you’ve probably made use of rare earth today.

There are some very particular uses of rare earth elements in defense applications. In the defense, rare earths are used in precision-guided weapons, laser range-finders, guidance systems, fiber-optic data-transmission equipment, and stealth aircraft. Rare earth is also used in permanent magnets that are stable at high temperatures—use your imagination to figure out where that matters.

As the market for rare earth metals boomed over the course of the last 20 years, free markets went to work. The most competitive producers took over the market, and there was blood on the streets. Once upon a time, U.S. producers dominated the market. Today, more than 90% of world production comes from China.

The expansion of global logistics capability, led by U.S. firms, has made the shift to Chinese sources of supply possible. If you are in the logistics business and involved in rare earth, times are good. Minerals are moving, equipment is moving, and money is being made.

Free markets work. Except when they don’t. 

Consider one vulnerability: There are more than 900 pounds of rare earth metals in the Joint Strike Fighter. Apparently, the rare earth metals are vital to the stealthy characteristics of the aircraft. Those metals come from China. 

Things are a little tense these days between the U.S. and China in the South China Sea. Economics and national interest have collided. What if China decides to restrict the supply of rare earth metals?

Commercial firms want rare earth metals. Defense imperatives demand rare earth metals. China controls the supply of rare earth metals. What national security risks are we willing to take to embrace free markets in the private sector?

I would love to hear your thoughts. Send them to me at steve@dcvelocity.com .

Don’t be stupid.

By Steve Geary | 01/29/2016 | 5:09 AM

“Duty of Care” is a legal term for a shipper’s responsibility that I always keep in my mind.  When I was a kid, my mother taught it to me.  She used different words, but she got the point across.

“Mom, do I really need the winter coat?”

“Mom, can I play with the snake?”

“Mom, can I jump off the garage?”

Mom would tell me, over and over, “Don’t be stupid.”

I’ve carried Mom’s lesson forward in my professional life, and when I make a shipment I really try not to be stupid.  The “Duty of Care” standard requires shippers to exercise intelligent and reasonable judgment.  For a shipment of paper clips, the duty of care is a pretty low bar.  For more important items, the bar is raised.

I’ve rented cars, I’ve hired couriers, I’ve leased dedicated trucks, and I’ve bought airplane tickets just to put a critical shipment in my carry-on luggage.  In extreme cases, I’ve even chartered airplanes for critical and time sensitive international moves.  When shipping something critical or sensitive I also use a system of checks and balances -and in some cases someone to check the checkers- to sure I live up to the “Duty of Care” standard.

On January 7, 2016, the Wall Street Journal reported, “An inert U.S. Hellfire missile sent to Europe for training purposes was wrongly shipped from there to Cuba in 2014, said people familiar with the matter, a loss of sensitive military technology that ranks among the worst-known incidents of its kind.”

The article continues, “Several of those familiar with the case said the loss of the Hellfire missile is the worst example they can recall of the kind of missteps that can occur in international shipping of sensitive military technology. While there are instances in which sensitive technology ends up getting lost in transit, it is virtually unheard of for such a shipment to end up in a sanctioned country like Cuba, according to industry experts.”

Unsurprisingly, the US government declines comment.  Mom isn’t pleased about that.

A lesson I learned a long time ago is to hope for the best, plan for the worst, and always employ preventive measures appropriate for the circumstance.  I keep hoping the military will learn the lesson, but they are creative.

Logistics lesson 101:  Listen to Mom:  don’t be stupid.

The most important infrastructure initiative you’ve never heard of . . .

By Steve Geary | 01/04/2016 | 4:25 PM

Defense interests, economic interests, and international trade are linked.  Participation in institutions like the World Bank and the Asian Development Bank has been an important catalyst for growth in the US economy, driving exports, while concurrently protecting national interests.

According to data published by the World Bank, US exports as a share of Gross National Product grew from about 9% in the late eighties to about 13.5% in 2013.  A lot of people in the United States rely on international trade for their livelihood.

On December 25, 2015 Santa Claus left the world a present under the tree.  With $100 billion in initial funding and 57 countries participating, the Asian Infrastructure Investment Bank (AIIB) opened its doors.  China is the biggest shareholder, holding 30%.  The United Kingdom, Germany, France, Russia, Saudi Arabia, the United Arab Emirates, Australia, and India are among the founding members.

The United States is not participating.

The AIIB is seeking to spur development along the ancient Silk Road, working to revitalize the overland trade route between Europe and China.  This is part of a larger initiative championed by the Chinese government and China’s Premier Xi Jinping called the “Silk Road Economic Belt.”

Anybody who has worked in Asia – particularly central Asia - is well aware of the logistics infrastructure challenges, and China is aiming directly at the opportunity. 

AIIB member nations are participating because it is in their economic interest to do so.  According to an Australia’s Joe Hockey, formerly the country’s treasurer, “If we can build new railway lines and ports in the region, that will mean more of our product goes into those facilities.”

Perhaps the lack of participation by the United States is another example of the current administration’s doctrine of leading from behind.  Whatever the logic, it seems likely that the lack of US participation will cost American shippers and exporters.

Wisdom in Washington. Really.

By Steve Geary | 12/14/2015 | 9:22 AM

Defense spending continues a steady decline.  In the mid-50’s, defense spending claimed a little over 10% of GDP, and today it’s down around 4% of GDP.  The tide is going out, and has been for decades.

A big part of that spending relates to military logistics.  The military has to stockpile weapons and supplies to be ready to go to war – that’s warehousing.  The military has to feed and equip troops – that’s commercial shipping. 

Reality is reality.  As any commercial company dealing in military logistics knows, the market is shrinking, and it has been since the end of the Korean War.  Deal with it.

What’s changing is how many companies are dealing with it.  They’ve reached a tipping point, and many are walking away from the military business.  A shrinking market combined with steadily growing government oversight is chasing many companies out the door.

In a letter sent this past September to Secretary of Defense Ash Carter, Senator John McCain wrote, “We both agree that one of our nation’s greatest national security challenges is the maintenance of our defense technological dominance in the coming decades. Unfortunately, the U.S. defense establishment no longer dominates the development of many vitally needed technologies. This is, in large part, because commercial and global research and development (R&D) efforts have dwarfed DOD’s investments in these areas, and because our defense acquisition system too often serves to repel, rather than attract, our most innovative commercial firms.”

While I don’t always agree with the Senator, in this case I can’t argue with his grasp of business.  The DoD is trying to address their market contraction issues with additional regulation, further stifling an already difficult landscape.

Without investment, markets die.  According to a recent editorial in National Defense Magazine, the total R&D for the top four defense contractors is about a quarter of what Google alone spends in R&D each year.  I didn’t check their math, but Sandra Irwin is pretty reputable so I’ll take her at her word.

There is smart money, and it’s not being invested in defense.  It’s going to Google, going to Silicon Valley, going to places where creativity is free to run.

It would be nice if Ash Carter took Senator McCain’s words to heart, and reversed course.  Dr. Carter did, after all, establish a DoD beachhead in Silicon Valley, to try to tap into all the Valley has to offer (see “A reality check for defense ambitions: do they understand what it means to run with the bulls in Silicon Valley”).

Be honest with yourself, Dr. Carter.  If you want to run with the wolves, you have to be a wolf.  That means the solution is to reduce regulation for defense contractors, not increase it.

As my father used to say, “If wishes were horses then beggars would ride.”  While we can hope that the Pentagon backs off, don’t hold your breath.  There will continue to be constriction, companies will continue to exit, and those of us who remain are going to feel the squeeze.

So, what do we do with the lemons that the Pentagon is sending our way?  As the DoD further distorts markets, they’ll create what economists call externalities and what guys like me call opportunities.

Give me a lemon, and I’ll find some sugar and make the lemonade.

A reality check for defense ambitions: do they understand what it means to run with the bulls in Silicon Valley?

By Steve Geary | 11/17/2015 | 2:40 AM

I had dinner with an old college friend recently.  Jim is working on a cutting project run out of Silicon Valley, a high speed magnetic levitation transporter.   It’s called The Hyperloop and is an idea put forth by Elon Musk, the celebrity CEO of SpaceX and Tesla Motors, among other things.

The Hyperloop will be revolutionary, if Musk can pull it off.  According to Wikipedia’s entry for the Hyperloop, “In June 2015, SpaceX announced that it would build a 1-mile-long test track to be located next to SpaceX's Hawthorne [California] facility.”   Musk’s near-term action plan is bigger than just the one-mile-long prototype, though.  “Construction on a 5-mile Hyperloop test track is to start on a Hyperloop Transportation Technologies-owned site in Quay Valley [located in central California] in 2016.”

In April of this year, shortly before Musk’s Hyperloop announcement, US Secretary of Defense Ash Carter announced the establishment of the Defense Innovation Initiative.

"We want to partner with businesses on everything from autonomy to robotics to biomedical to engineering; from power, energy and propulsion to distributed systems, data science and the Internet of things… if we are going to leverage these technologies to defend our country and help make a better world, the DoD cannot do everything in all of these areas alone."

Great thoughts, but having a great idea is the easy part.  Doing the work to make the idea a reality is the hard part, particularly in the Pentagon.  The good news is that six months later the OSD office – the Defense Innovation Unit (Experimental) - is up and running, located in Silicon Valley, not in the black hole for innovation called Washington, D.C.  That, all by itself, is a hopeful sign in the glacial bureaucracy of the DoD. 

But there is reason for skepticism, too.  The Pentagon is justifiably proud of their speed, compared with the way they usually work, but are they really ready to run with the best innovators in the commercial world?  Do they even understand how fast that world spins?

It took six months for the Pentagon to establish a satellite office of three people in the Valley.  Are they really ready to run with the A-Team in the Valley?  Are they ready to run with the bulls - people like Elon Musk?

It’s hard enough in DoD to apply unconventional thought at the tactical level (see “When the wrong answer is the right one,” May 2014), much less across the Department at the strategic level, but Ash Carter is a talented guy. 

We have our fingers crossed.

Trickle-down logistics, revisited: Roll-on/roll-off re-imagined

By Steve Geary | 10/30/2015 | 4:24 AM

In the October issue of DCV ("Trickle Down Logistics"), we explored how government innovations in logistics have trickled into the commercial world. One of the stellar examples was the 1946 conversion of World War II’s LST landing ships to commercial service. From that humble beginning—a conversion instead of a trip to the bone yard—three military cargo ships evolved the contemporary fleet of roll-on/roll-off (RO/RO) cargo ships.

Today in most major ports you will see the descendants of those Word War II landing ships delivering new cars to American markets. The connection between today’s huge cargo ships and World War II landing craft is not obvious, but that heritage is there.

Well, what goes around comes around. For the past decade or so, the U.S. military has been experimenting with high-speed roll-on/roll-off catamarans.

Instead of developing a new class of high-speed cargo ship design from scratch, the military went to the commercial marketplace. In 2001, they leased a high-speed catamaran, the Devil Cat, which had seen commercial service in Australia and New Zealand. Rechristened the USS Joint Venture, the ship underwent a number of modifications, adapting her for military use, including the addition of a helicopter flight deck.

The U.S. military ran trials, including service in support of Operation Iraqi Freedom. After five years, the lease ended. The Joint Venture returned to the owners, who returned her to commercial service.

But that is not the end of the story. On September 17, 2011, the U.S. Navy christened the USS Spearhead,the first ship in the new high-speed roll-on/roll-off catamaran class, with a flight deck. The Navy plans to build a total of 23 of these ships over the next decades, which will be known as the Spearhead Class.

The military created the modern RO/RO concept, and the commercial world ran with it. Similarly, commercial markets drove the development of the high-speed catamaran, and the military is running with it. The smart people in uniform have created an entirely new class of warships based on commercial innovations.

What goes around, comes around.

To read about how the military led the development of containerized freight, go here

Breakthrough innovation, courtesy of the military. Part 1: the roots of containerization and intermodal transportation.

By Steve Geary | 07/26/2015 | 11:17 AM

When you think about innovative organizations, which one comes to mind?  Amazon?  Facebook?  Apple?

How about DoD?  The Department of Defense has been a relentless early adopter of new logistics technologies and strategies.  In the science and practice of logistics, the military – yes, the people who brought us the $435 claw hammer, the $640 toilet seat and $7,600 coffee makers – has throughout history often led the way in developing, nurturing, and implementing crucial tools and practices that have eventually proved crucial for the business world.

In logistics we make use of innovations, every day, brought to us by the defense establishment. Containerization and intermodal transportation are an obvious example.

Containerization and intermodal transportation are deeply imbedded in the way the world moves goods today. The commercial breakthrough for containers happened in the mid-50’s, brought about by visionary trucking executive Malcom McLean.   After building and selling a successful motor carrier operation, McLean Trucking, he purchased the steamship line U.S. Lines and led the way in developing the container ships shippers now take for granted.

McLean deserves enormous credit for that, but in fact, the initial development of containerized transportation came from the U.S. Army, driven by the exigencies of war.

In the latter part of World War II, the Army used something they called “transporters”-- standardized boxes that were really mini containers--to speed the loading and unloading of cargo ships going back and forth from Europe.  When the Korean conflict came along, the military started using the “transporters” for sensitive military equipment heading to the Pacific Rim.  In 1952 the Army began using the term CONEX, short for "container express," instead of “transporters.”  The first major shipment of CONEXes, containing engineering supplies and spare parts, moved by rail from the Columbus General Depot in Georgia to the Port of San Francisco, then by ship to Yokohama, Japan, and then to Korea, in late 1952.  

Innovations in military logistics will keep on coming, and commercial applications are sure to follow.  Delivery drones are already in use at the Marine Corps.  Driverless cargo trucks are being tested by the Army.  Field deployable 3D printing capabilities went forward in Afghanistan.

More ideas, still on the military drawing board, some in development, are certain to follow.  The Army is rolling out leading edge virtual reality combat simulators, to train people in battlefield conditions without an actual battlefield.  Perhaps we’ll train truck drivers the same way, taking a totally different approach.

What the military has learned over the years is that creativity by itself is insufficient, that better is sometimes not good enough.  The drive for different – innovating an entirely new approach – may be what is required to win the battle, or even the war. 

Earlier blog on military logistics innovation. 

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Mike Rudolph

Mike Rudolph

Mike Rudolph is a recently retired Marine Colonel with over 30 years of operational experience, proven leadership, and management success in the logistics and supply chain management fields. He is an executive consultant with ROSE Solutions and the Supply Chain Visions family of companies - consultancies that work throughout the government sector. Mike led the Marine Corps Supply Chain and Life Cycle Management Center at Marine Corps Logistics Command - responsible for supply chain and life cycle management of all ground weapon systems, equipment, and reparable components, the depot maintenance program, and equipment prepositioning program. During 2004-2008, he served two tours of duty in Anbar Province, Iraq as the G-4 for Multi-National Force – West, supporting all combat operations and coalition efforts to revitalize Iraqi economic development and stability. Mike's efforts were recognized with the Bronze Star for his first tour and the Legion of Merit for his second. He was widely recognized as a visionary and innovator in the Marine Corps logistics community.



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