How can a govenment agency have a strategic focus without a strategy?

I just read a report prepared by the GAO a few years ago, examining warehouse utilization by government agencies, excluding the Department of Defense.  In November of 2014, they published a report titled, “Strategic Focus Needed to Help Manage Vast and Diverse Warehouse Portfolio.”  Including appendices, it runs to fifty pages, and if you have insomnia go here to read it.

According to the report, “in fiscal year 2013, three agencies held or leased most of the civilian warehouse space either owned or leased by the federal government:  GSA, Interior, and DOE.  Of the approximate 90-million square feet of warehouse space occupied by civilian agencies, GSA accounted for about 29-million square feet, Interior for about 15-million square feet, and DOE for about 11-million square feet.”  It continue, “Cumulatively, these three agencies held or leased about 63 percent of total civilian warehouse space.”

The report then dives into an exploration of whether or not space is the right sort of space, leasing terms, and a variety of operational issues.  Did you see the shift GAO made, either intentional or unintentional?  The title of the report calls for “Strategic Focus,” yet the report never addresses the fundamental strategic question of why 90-million square feet of storage is required.

The writer Oscar Wilde said, "the Americans and the British are identical in all respects except, of course, their language.”  I’ve also seen it in a slightly different form attributed to George Bernard Shaw.  Flip a coin and go with the source that makes you feel happier. 

Shouldn’t government agencies be managing inventories, not warehouses?  The real challenge lies in figuring out how to make inventories move, how to manage the inventories, and once that is sorted out managing the warehouse is simply the implementation challenge.  It sure seems like the GAO looks at it backwards, and managing warehouses and figuring out how to lease and fill them as the implementation challenge 

Somewhere along the line the GAO missed some really important steps, validating the requirement, followed by an analysis of alternatives.  GAO jumped right into obtaining space.  How can the GAO have a strategic focus on warehouses – as they claim - without an inventory strategy?  Next time around, maybe the GAO should read a definition of strategy.  According to the Business Dictionary, strategy is a “method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem.”

Warehouse managers fill space.  Logistics managers fill orders.  Supply chain managers fill the pipeline.

Word chiuce matters.

Surfin' USA

If you are a logistician, it’s time to learn to surf.

For my entire career I’ve been involved in global trade.  One year out of college, over thirty years ago, I found myself working in Mexico. One thing led to another and the last time I checked I’ve done business in a couple of dozen countries.

For me, global trade and free markets long ago slipped into the category of “fact.”  That “fact” inevitably led to an expectation that over time trade would continue to become more integrated. According to the World Bank, in 1960 exports were 5% of the US GDP.  In every year since then, exports as a share of the US GDP has grown. In 2014, exports hit almost 13.5%.  The mirror image is similar.  For the US, the World Bank reports that over the same period US imports have grown from 4.2% of GDP to 16.5% of GDP.

Then the earth moved. Well, it hasn’t moved yet, but before an earthquake there are always tremors.

Brexit looms. Trump is promising tariffs, trade barriers, and a wall. Clinton turned against the transpacific partnership, after being for it.  Muslim extremists — slaughter in the streets of Paris, across Iraq, in the airport in Istanbul — will force the hand of politicians. In the latest installment of the soap opera that is playing out in the South China Sea, the president of Malaysia held a cabinet meeting on a warship in the Natuna archipelago, a piece of political theater that surely resonated in Beijing. 

One blip is an aberration, two are a concern, and three make a trend. Trends have been disrupted. We all operate and trade internationally. It is inevitable that global movement and global trade will face increased friction. If you are a logistics leader, it’s time to create contingency plans.

More potentially disruptive events are looming on the horizon. If the zika virus turns into a pandemic, will political leaders restrict international movement? What are Putin and a resurgent Russian bear going to threaten next? Will the “New Silk Road” across central and southern Asia turn international trade on its head? (See “The most important infrastructure initiative you’ve never heard of … ,” December 2015.)

We’re logisticians, and our companies rely on us to keep things moving. Where do you buy? Where do you sell? We know how to react if trade barriers come down, because we’ve been doing it for decades, but what are we going to do if trade barriers go up? What are your contingency plans? 

Have you even thought about it? If you don’t know how to surf, get a life raft.