1) Be kind to others, even when they don't deserve it.
2) Faults will turn to good, if you try to improve.
3) Discouragement serves no purpose. It is self-pity.
4) Boldness has genius and power in it (Goethe).
5) You create your circumstances out of your thought and actions.
6) Change is constant.
7) Timing is crucial.
8) Cool heads prevail.
9) Do what you know to be right.
10)Have fun.
Friday, December 21, 2012
Sunday, November 25, 2012
Improving Logistics Improves Your Business
Improving logistics is vitally important, if a company wants to stay profitable in today’s economy. Today, it is more important than ever that a company produce a great product and deliver it at the lowest possible cost. Many companies fail to recognize the impact of logistics improvements on revenue growth, operating expenses and capital utilization. Concentrating on logistics can improve growth and increase market share. The role of logistics in driving growth and market share is increasingly understood and accepted.
Operating Cost Reduction has been the most common area of focus and the area of greatest measurable logistics value for most companies. It has been the primary driver of TMS and WMS implementations and other logistics technology. The most common sources of value relative to cost reduction are:
1) Transportation expenditures
2) Administrative costs
3) Distribution and Fulfillment labor costs
4) Total network expense
5) Inventory carrying costs
Working Capital Reduction is also an important benefit that your business can derive from improved logistics. Improving logistics can have a significant impact on both financial performance and shareholder value. Working capital reduction should be of prime interest to all corporations, as it has a direct link to shareholder value. Logistics can affect working capital in many ways:
1) Increased inventory turns
2) Reducing receivables through improved order accuracy and information completeness.
3) Reducing safety stocks and network inventory levels
4) Improved cycle times, which increase inventory turns and accelerate the cash-to-cash cycle.
Supply chain and logistics excellence is increasingly defined by process velocity. Delivery speed, or the ability to reduce the time between order taking and customer delivery to as close to zero as possible, is one of the key goals sought by today’s organizations.
Return on Assets (profit divided by fixed asset value), is one of the primary metrics targeted for improvement as a result of supply chain management initiatives. Improved logistics directly improves a company’s Return on Assets. Better distribution efficiency and throughput can reduce requirements for capital for physical facilities and equipment (lowering the asset base), while simultaneously increasing the profit from distribution center operations. In this way, both the numerator and denominator of the ROA ratio are positively impacted.
Attempting to measure the ROI of the intangible benefits of logistics services indicates a need for new metrics that measure more than just the cost and savings of the investment. These new measures should focus on such things as how improvements will speed up business processes, improve communications, increase customer satisfaction and assist in decision-making and quality control. These factors reflect performance improvements and what is important to customers, not simply short-term profit.
Improving your logistics strategy (combined with operational excellence) will provide measurable benefits for your company, as well as for your partners and customers.
Operating Cost Reduction has been the most common area of focus and the area of greatest measurable logistics value for most companies. It has been the primary driver of TMS and WMS implementations and other logistics technology. The most common sources of value relative to cost reduction are:
1) Transportation expenditures
2) Administrative costs
3) Distribution and Fulfillment labor costs
4) Total network expense
5) Inventory carrying costs
Working Capital Reduction is also an important benefit that your business can derive from improved logistics. Improving logistics can have a significant impact on both financial performance and shareholder value. Working capital reduction should be of prime interest to all corporations, as it has a direct link to shareholder value. Logistics can affect working capital in many ways:
1) Increased inventory turns
2) Reducing receivables through improved order accuracy and information completeness.
3) Reducing safety stocks and network inventory levels
4) Improved cycle times, which increase inventory turns and accelerate the cash-to-cash cycle.
Supply chain and logistics excellence is increasingly defined by process velocity. Delivery speed, or the ability to reduce the time between order taking and customer delivery to as close to zero as possible, is one of the key goals sought by today’s organizations.
Return on Assets (profit divided by fixed asset value), is one of the primary metrics targeted for improvement as a result of supply chain management initiatives. Improved logistics directly improves a company’s Return on Assets. Better distribution efficiency and throughput can reduce requirements for capital for physical facilities and equipment (lowering the asset base), while simultaneously increasing the profit from distribution center operations. In this way, both the numerator and denominator of the ROA ratio are positively impacted.
Attempting to measure the ROI of the intangible benefits of logistics services indicates a need for new metrics that measure more than just the cost and savings of the investment. These new measures should focus on such things as how improvements will speed up business processes, improve communications, increase customer satisfaction and assist in decision-making and quality control. These factors reflect performance improvements and what is important to customers, not simply short-term profit.
Improving your logistics strategy (combined with operational excellence) will provide measurable benefits for your company, as well as for your partners and customers.
Tuesday, October 2, 2012
Collaborative Logistics Networks
Collaborative relationships between shippers and carriers (and between shippers) should result in greater efficiency and profitability, while satisfying the interests of all parties. An ideal collaborative logistics network should promote a high degree of visibility and activity coordination between multiple shippers, carriers, ancillaries and third-party providers. This results in optimum utilization of assets and benefits for all trading partners.
Collaborative networks employ customer-centric tools like tracking and tracing, which can be leveraged by the transportation service providers to better implement strategies like cost effective route planning, dynamic routing and rerouting. These networks can provide considerable savings on fuel, driver scheduling and help to avoid traffic congestion.
Shipper to shipper collaboration can mean co-loading trucks to make same route deliveries or co-occupying warehouses. Carriers gain by keeping their assets moving and full, assured of regularly scheduled assignments and hence dedicated revenue streams.
Unfortunately, I don't know of any examples of ideal collaborative logistics networks.
The ideal network should provide shippers with the mode and carrier that offers the best rates within the prescribed transit times. Unfortunately, I know of no optimizer currently on the market that does a good job of optimizing between LTL and parcel. This seems like a limitation that could be (may have already been) overcome by some software/application service providers.
There is another problem with providing this high level of optimization, tracking and tracing. The networks currently capable of providing this level of IT sophistication must force their members to operate within their four walls. I wonder how the same goals can be accomplished, while opening up the network to a much larger group of shippers, carriers, third parties and ancillaries, such as warehouses?
Any ideas?
Collaborative networks employ customer-centric tools like tracking and tracing, which can be leveraged by the transportation service providers to better implement strategies like cost effective route planning, dynamic routing and rerouting. These networks can provide considerable savings on fuel, driver scheduling and help to avoid traffic congestion.
Shipper to shipper collaboration can mean co-loading trucks to make same route deliveries or co-occupying warehouses. Carriers gain by keeping their assets moving and full, assured of regularly scheduled assignments and hence dedicated revenue streams.
Unfortunately, I don't know of any examples of ideal collaborative logistics networks.
The ideal network should provide shippers with the mode and carrier that offers the best rates within the prescribed transit times. Unfortunately, I know of no optimizer currently on the market that does a good job of optimizing between LTL and parcel. This seems like a limitation that could be (may have already been) overcome by some software/application service providers.
There is another problem with providing this high level of optimization, tracking and tracing. The networks currently capable of providing this level of IT sophistication must force their members to operate within their four walls. I wonder how the same goals can be accomplished, while opening up the network to a much larger group of shippers, carriers, third parties and ancillaries, such as warehouses?
Any ideas?
Wednesday, June 6, 2012
Quality, Service and Cost
Over the past several years, the emphasis at most freight transportation companies has been placed almost exclusively on cutting costs and providing lower pricing to customers. Necessity forced most companies to concentrate on cost cutting and lowering pricing. Smart companies only made cuts that didn’t damage their ability to provide quality and service to their customers.
The three critical success factors are service, quality and cost. We have some degree of control over all three of them, but have the most control over the way we treat our customers. This is an element of the service factor. In freight transportation, it is at least as important as product quality (good transit time, low claims ratio, etc.,) and low cost. It is hard to say which of the three critical factors are the most important, but we can always control how we treat our customers, even when costs and quality aren’t meeting our standards.
Quality exists when a product or service meets customer expectations, at the minimum. It increases as customer satisfaction increases. In order to retain existing customers and attract new customers, an organization must produce high-quality products and/or services. If quality is poor, a company must identify the problems and bottlenecks, redesign their products/services, or lose customers by allowing their products/services to be sold as less than acceptable. Therefore, when quality is poor, costs increase and customers are lost. Talking about quality is common in most firms and a great deal of time is devoted to quality discussions at meetings. However, unless concrete steps are taken to improve quality, it will not improve.
The traditional view assumes that improving quality always trades off against lowering costs and that costs will increase with attempts at quality improvements. The quality-based view believes that firms should always try to improve quality and that higher quality products/services pay back the costs required to get them. Improving quality may initially increase costs, but quality improvements reduce costs in the long run.
The cost of lost customers cannot be exactly calculated. The lost revenue from each lost customer can be approximated, as well as the costs associated with securing new customers. However, the damage to a company’s reputation cannot be easily approximated. Once a reputation is damaged, it is very difficult to repair the damage, even if quality is improved. Companies with bad reputations must offer lower prices to sell their products than do companies with better reputations. Delivering products and services that meet or exceed customer expectations is essential for the survival of a firm today. Exceeding customer expectations may lead to your company becoming a preferred provider for your customers. In the long run, quality improvements pay for themselves.
It is hard to say which of the three critical factors are the most important; quality, service, or low cost. Freight transportation firms should continuously try to improve all three. Higher quality products/services pay back the costs required to get them. Improving quality may initially increase costs, but the quality improvements reduce costs in the long run. Cost cutting is necessary and healthy, as long as you’re not cutting too deeply. However, price slashing will not help your company to grow in the long run. Finally, we can always control customer service (how we treat our customers), even when costs and quality aren’t meeting our standards.
The three critical success factors are service, quality and cost. We have some degree of control over all three of them, but have the most control over the way we treat our customers. This is an element of the service factor. In freight transportation, it is at least as important as product quality (good transit time, low claims ratio, etc.,) and low cost. It is hard to say which of the three critical factors are the most important, but we can always control how we treat our customers, even when costs and quality aren’t meeting our standards.
Quality exists when a product or service meets customer expectations, at the minimum. It increases as customer satisfaction increases. In order to retain existing customers and attract new customers, an organization must produce high-quality products and/or services. If quality is poor, a company must identify the problems and bottlenecks, redesign their products/services, or lose customers by allowing their products/services to be sold as less than acceptable. Therefore, when quality is poor, costs increase and customers are lost. Talking about quality is common in most firms and a great deal of time is devoted to quality discussions at meetings. However, unless concrete steps are taken to improve quality, it will not improve.
The traditional view assumes that improving quality always trades off against lowering costs and that costs will increase with attempts at quality improvements. The quality-based view believes that firms should always try to improve quality and that higher quality products/services pay back the costs required to get them. Improving quality may initially increase costs, but quality improvements reduce costs in the long run.
The cost of lost customers cannot be exactly calculated. The lost revenue from each lost customer can be approximated, as well as the costs associated with securing new customers. However, the damage to a company’s reputation cannot be easily approximated. Once a reputation is damaged, it is very difficult to repair the damage, even if quality is improved. Companies with bad reputations must offer lower prices to sell their products than do companies with better reputations. Delivering products and services that meet or exceed customer expectations is essential for the survival of a firm today. Exceeding customer expectations may lead to your company becoming a preferred provider for your customers. In the long run, quality improvements pay for themselves.
It is hard to say which of the three critical factors are the most important; quality, service, or low cost. Freight transportation firms should continuously try to improve all three. Higher quality products/services pay back the costs required to get them. Improving quality may initially increase costs, but the quality improvements reduce costs in the long run. Cost cutting is necessary and healthy, as long as you’re not cutting too deeply. However, price slashing will not help your company to grow in the long run. Finally, we can always control customer service (how we treat our customers), even when costs and quality aren’t meeting our standards.
Wednesday, February 8, 2012
Pursue Outside Interests to Promote Innovation
Thag fell down while trying (for the tenth time) to balance himself on a small log. This fun, new pastime gave him a great idea! He applied the concept of falling off a rolling log to solving the problem of how to move a boulder blocking the mouth of his cave. The invention of the first wheel was almost certainly such an application of an existing concept to a new or unrelated problem. Because Thag had the ability to view his boulder problem in a new way, he could creatively solve the problem. Thag applied concepts learned in one area to another area. For this reason, cultivating interests unrelated to your job can make you a better problem-solver at work. You learn to see things from different points of view.
Innovation is one of the primary ways that companies adapt to changing circumstances. It is necessary to be flexible in order to adapt to complex, changing situations. Methods and techniques can get out of date in a short period of time. Over time, firms that survive are better at adapting to change. Extinct firms could not adapt.
Innovators rarely come up with new ideas. Instead, they convert old ideas into new ones, adapting them from one context to another. They go through a process of extending and changing the existing idea, until a new concept emerges. Cultivating various interests can lead to the application of concepts used in solving one type of problem to other, seemingly different problems. For instance, solutions such as M.B.O. (Management by Objective) were popular in the business community several years ago. Soon, M.B.O. was adapted to colleges, religious organizations, clubs and other groups that wished to accomplish goals. Likewise, concepts used to solve problems in areas unrelated to work might be applied at work.
Being saturated in a corporate culture can inhibit the creative thought process. Sometimes being immersed in a certain culture limits a person to what everyone else in that group views as possible, or acceptable, thoughts and behaviors. Perspective is gained by allowing oneself the time to reflect on a situation from various points of view. Seeing the world through the different lenses provided by various interests allows you to question previously held assumptions. Questioning established beliefs helps you to view everyday work situations differently and so leads to possible creative solutions to your company’s problems.
Use your spare time to cultivate interests unrelated to work. Play is as important for adults as it is for children. It will pay off by making you a better employee and a more creative person. It may cause a change in the way that you react to the problems you face each day. Problems really can be viewed as opportunities. Don’t allow yourself to always focus narrowly on the technical details of your job. Try to relax your focus in your spare time. Improve your ability to adapt to change.
Innovation is one of the primary ways that companies adapt to changing circumstances. It is necessary to be flexible in order to adapt to complex, changing situations. Methods and techniques can get out of date in a short period of time. Over time, firms that survive are better at adapting to change. Extinct firms could not adapt.
Innovators rarely come up with new ideas. Instead, they convert old ideas into new ones, adapting them from one context to another. They go through a process of extending and changing the existing idea, until a new concept emerges. Cultivating various interests can lead to the application of concepts used in solving one type of problem to other, seemingly different problems. For instance, solutions such as M.B.O. (Management by Objective) were popular in the business community several years ago. Soon, M.B.O. was adapted to colleges, religious organizations, clubs and other groups that wished to accomplish goals. Likewise, concepts used to solve problems in areas unrelated to work might be applied at work.
Being saturated in a corporate culture can inhibit the creative thought process. Sometimes being immersed in a certain culture limits a person to what everyone else in that group views as possible, or acceptable, thoughts and behaviors. Perspective is gained by allowing oneself the time to reflect on a situation from various points of view. Seeing the world through the different lenses provided by various interests allows you to question previously held assumptions. Questioning established beliefs helps you to view everyday work situations differently and so leads to possible creative solutions to your company’s problems.
Use your spare time to cultivate interests unrelated to work. Play is as important for adults as it is for children. It will pay off by making you a better employee and a more creative person. It may cause a change in the way that you react to the problems you face each day. Problems really can be viewed as opportunities. Don’t allow yourself to always focus narrowly on the technical details of your job. Try to relax your focus in your spare time. Improve your ability to adapt to change.
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