NOVEMBER 2024LOGISTICSTRANSPORTATIONREVIEW9 Service meant On-Time and In Full (OTIF) and rigorously measured every order, every line, and every piece for both On-Time and In Fullgoods arrived at the original customer's promised time. We have also extended this metric to cover merchandise condition (accuracy and damage free) which can vary by customer. There are many unique customer requirements and metrics for order preparation (ticketing, bagging, labeling, and VAS-value-added services) that add to Logistics complexity. In addition, the growth of E-Commerce direct-to-consumer (DTC) will add many additional requirements and complexities to your Logistics network. One of the key logistics strategy questions to answer is should you have both B2B and DTC i.e., all channels and brands in a single logistics network. While there are many considerations, the approach is to have great "cost to serve" data to support your overall logistics network strategy. Service also took on a whole new meaning with supply chain disruptions impacting the international ocean trade during the pandemic. One of the key successes was the ability to find many new ways to flow goods and overcome challenges and constraints. It took advanced teamwork across all the functions in the supply chain working together along with starting a three-year shipper-of-choice strategy before the pandemic to partner with key logistics carriers and partners on best-in-class partnership metrics for equipment turn times, detention, demurrage, volume commitments i.e., do what you say and say what you do. We were able to secure additional capacity during the pandemic based on the credibility and partnerships we formed with our logistics partners. In addition, having end-to-end goods flow visibility continues to be a key critical and competitive advantage and requires the best technology, people skills, and processes to ensure goods get to each market to satisfy customer demand OT & IF. Logistics cost and productivity remain at the forefront of a company's success. The adage of a dollar saved in logistics falls to the company's bottom line P & L remains very high in importance. I often use the line "we are in the penny business" and one that I heard for the first time from a successful CEO interviewing me for the next level top global logistics role. I demonstrated during the interview a thorough understanding of logistics costs and a cost-to-serve mindset. Winning at cost and productivity in today's environment requires logistics leaders to not only understand the details of all cost inputs but can influence and translate across your internal and external organizations. The past two years have ensured that the internal organization understands the inflationary items significantly impacting logistics costs and influencing the overall company's overall decisions. This will continue to be at the forefront of supply chain performance dominating CEO discussions. With logistics suppliers, it's ensuring you understand the "should costs" of their business and developing a vested win-win partnership that's flexible to everyone's needs. While there is no single, best approach, the 3PL relationships I believe are successful and long-lasting have established levels pre-set for escalation and problem-solving, involve active participation with quarterly reviews, and are open book with high transparency and accountability. Lastly, it's about leaving the world a better place and we have organized across 3 ESG pillars; first sustainable design and development of our products to reduce plastic packaging by 25% in 2030, responsible sourcing and production, and thriving and inclusive communities. Especially in Logistics, we have upgraded lighting in our company-owned DCs with the lowest energy consumption at great payback savings, introduced EVs where possible, and expanded our outbound freight networks with our customers. In cases where our customers, have more efficient freight networks, we have negotiated freight collection agreements that significantly reduce energy consumption through more efficient modes of transportation. As your company transitions to the new era, I hope you are as excited as I am about the roles and contributions you can make as logistics leaders to shape and influence a better world for the next generations to live in!
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