Moving the “People” in Logistics

Guest post by Rico Fleshman

In my previous post, TDM: The Logistics of Moving People, I discussed the transportation demand management industry and  its goal   to more efficiently move people through the current infrastructure in a manner that is both cost effective and environmentally sound. That post was well- received in the TDM industry and resounded in the logistics and supply chain communities as well.

The People Part

I recently attended several supply chain and logistics conferences where I was drawn into discussions on the “people” part of the logistics equation by folks who had read the TDM blogpost. Apparently, moving people in logistics is something that is rarely discussed. The focus of logistics and supply chain is concerned with the most efficient movement of freight and goods, and rightly so.

The logistics conversation has traditionally revolved around the mode of transport, applications and security, distribution or method. When people are addressed in this regard it is typically related to the actual role they play, e.g. logistician, freight forwarder, or truck operator or in relation to how to best educate and train them to be more effective at their jobs. 

The Global Scale

The distinction I make is this: a significant part of the logistics industry is moving the people who manage the processes that make some companies run. Companies with multi-national and global presence and who need to have boots on the ground are in the business of people logistics whether they realize it or not. Navigating contract schedules, deliverables, lodging, and land, sea, and air transportation to deliver those teams of people to their desired destination requires either a robust human resources department or a designated logistics team.

Likewise, those companies with elaborate and expansive logistical needs, i.e. construction companies, large equipment manufacturers, and oil companies, are faced with not only the logistics of moving equipment, but also that of the workforce that operates that equipment and manages the processes. Moving people is as integral to the success of a project as is the timely delivery of   equipment. Even in instances when a company decides to hire a local workforce, it must still acquire the right personnel for the project.

The Local Scale

Not all companies have worldwide logistics concerns. Do these smaller companies still have the same people-moving logistical needs? Absolutely.

Common in logistics and supply chain conversations now is the need to decentralize operations or manufacturing, localize production, and get products to market faster. 3PL’s and even the newer 4PL’s are now tasked with changing capabilities and streamlining networks and efficiencies throughout a company’s scope--even in geographically challenging areas--as decentralization occurs. Part of that solution has to be a discussion of hiring local versus relocating an existing, trained internal workforce.    

Logistics as a Company-Wide Concern

As in the previous examples, the logistics of people have to be considered. That consideration touches all (or nearly all) departments of a company. It is possible that the logistics of moving people is not often a part of the larger planning discussion because that element is handled by departments that do not consider themselves as logisticians, such as human resources, facilities, and finance.  

It will be interesting to see how conversations about moving people continue to work themselves into logistics and supply chain discussions. I believe that people will continue to be a part of the logistics equation in every aspect.

About the Author

Rico Fleshman is the Corporate and Strategic Manager: Transportation, Logistics and Supply Chain for American Public University. He has worked with numerous transportation associations and has extensive knowledge of federal and state transportation policy, funding, metropolitan planning processes and regulatory compliance of transportation programs. For information on the online Transportation, Logistics and Supply Chain programs at APU, visit StudyatAPU.com.

Overcoming Risk to Realize the Potential of Global Sourcing

Guest Post By Dr. Stacey Little, Program Director, Transportation & Logistics Management at American Public University

Reports indicate an increase in global sourcing each year as companies attempt to capitalize on the business benefits of cost reductions, enhanced quality, improved efficiencies, and a competitive edge. However, organizations that participate in global supply chains can be exposed to increased complexity and uncertainty compared to those that operate domestically. If not managed properly, these risks can undermine the benefits of global sourcing.

While the risks associated with global sourcing can impact an organization’s bottom line, a proactive approach can bring improved efficiencies and costs. Just as with domestic sourcing, a global sourcing strategy should include proper evaluation of these three areas: global suppliers, supply chain relationships, and the risk associated with each.

Global sourcing managers should choose sources based on risk level and their company’s ability to address that risk.  According to David Cowell, chief procurement officer at Coca-Cola HBC, it is more important to identify whether a potential supplier is low-risk rather than how competitive the supplier is on price, as reported by Robin Parker in the 2001 Supply Management article, “Manage Risks in Emerging Markets.” This still stands true today as many companies manage risk in a global market.

Some global sourcing risks can lead to decreased quality of supplies or products, interruption of supply chain processes, and increased costs in materials. In fact, without proper identification of such potential risks, hidden costs may negate any benefits achieved.

A past example of decreased quality of products is the recall of millions of toys from China because of lead-paint hazards to children. A more recent example of interruptions in the global supply chain that could lead to increased costs in materials is the earthquake in Japan.

It is obvious that every possible risk occurrence cannot be predicted, however, proactive consideration of potential risks can help companies reduce the damaging consequences. A simple three-step process can help organizations begin to manage risks.

• Step 1: Identify the possible risks associated with each potential initiative. This may include a visit to the country and/or supplier.  At minimum, this step involves extensive research on the sourcing country.
• Step 2: Assess risks based on the probability of occurrence and the impact they would have on the initiative and the organization.
• Step 3: Create a process to monitor and strategies to mitigate these potential risks.

If global sourcing choices are made without consideration and assessment of risk it could be detrimental to an organization. Today’s supply chain managers need to be prepared to take the steps to properly develop global sourcing efforts so that the organizations will successfully gain the competitive advantages they are seeking.

About the Author

Dr. Stacey Little is program director for the Transportation & Logistics Management program. She has over 12 years of experience in teaching in Business and Logistics in both the online and traditional format.  She has a Professional Designation in Logistics and Supply Chain Management and a Certification in Transportation and Logistics from the American Society of Transportation and Logistics. Her research interests are in the area of cultural intelligence and global preparation of future managers and leaders.