The Point by Buyers Meeting Point
Book Review: Global Logistics Strategies
“As supply chain complexity increases, so do the services which logistics providers are asked to perform. No longer is logistics seen as a tactical activity, where the gains made are purely measured in terms of transport or warehousing cost savings. Instead, customers become more engaged in the transformational impact on supply chain competitiveness which a logistics provider can achieve.” –Manners-Bell, p. 23
Global Logistics Strategies provides the characteristically thorough and thought-provoking coverage we have become accustomed to from author John Manners-Bell. In his acknowledgements, he mentions that his father set up a transport company in the 1970s. Logistics is clearly in his blood.
The book opens with the current and historical context required to grasp this expansive industry. Of particular importance are geopolitical factors such as trade agreements, trade groups, and tariffs. As more trade becomes ‘free’, it is easier for logistics providers to move goods within and between modes, even across country lines. While the largest economies in the world will always have a great deal of influence on logistics trends, the relative importance of individual trade lanes is always in flux. Although the consumption of emerging economies presents new growth opportunities, the time required to build up the requisite infrastructure may create a lag in available capacity. Companies looking to safeguard their top line will ultimately need to create both foreign and domestic demand – each of which has its own logistics requirements.
“In many respects, effective supply chain management is all about the trade-off of one set of risks against another.” (p. 221)
The trend away from focusing on economies of scale in manufacturing and production has taken considerable inventory out of the system and altered what companies want from their logistics providers. Requests for smaller, more frequent deliveries mean more vehicles of smaller size as well as losses in provider efficiency. The design of each logistics network includes trade-offs between the costs of transport versus warehousing, inventory, and administration. The idea of trade-offs is central throughout the book, as there are no clear-cut answers to be found in this area of management and strategy. It is evident just how much opportunity for creating competitive advantage is tied up in the ability to make good decisions.
Of particular interest (and importance) is the section on rebalancing internal and external risks. As with the trade-offs inherent in designing a logistics network, there are advantages and disadvantages to externalizing production and transportation. Risk may be raised overall, but specific risks are also dispersed as more different locations are involved. Additional challenges include poor visibility and the volatility of both fuel and shipping costs. The probability and length of each potential disruption must be weighed against the options and costs of mitigation.
This book bridges the relevant history, turbulent present, and potential future (including expected disruptive technologies such as 3D printing) of this faced-paced industry with an air of calm and understanding. In addition to broadly applicable information on global logistics, Manners-Bell devotes considerable time to each mode, and provides more in depth coverage of the vertical sectors for automotive, pharmaceutical, consumer goods and retail logistics, and high tech.