A New Focus

I have been hard at work over the last few days reworking the Logistics Help website to make it more relevant to what I am working on now, and also putting up a personal branded website.  I have focussed the Logistics Help business on the small to medium business market, which I think is somewhat under-served by logistics expertise.  I have also launched a new blog to follow my progress on the Rapid WMS project.  The aim of this blog is to tell the story of the development of an idea and, hopefully, at the end of the process have an inspiring story to tell as well as having made a difference.

I am targeting the areas where I think I can contribute most to the world.   I still have plenty to contribute in my industry specialty of Healthcare Logistics having spent a large part of my career working with a number of major companies in this industry.  I also want to fill a gap that I see in almost every warehouse I walk into, which is a both a lack of WMS technology and a lack of good warehouse practice.

It will be an interesting journey!

If warehousing, logistics and supply chain are important to your business or your personal career then why not follow this blog by email or on Google+.  To tap in to the full benefits of business and career boosting ideas I suggest you join The Warehouse Performance Initiative.

What if your logistics is already the best? (Part III)

How might rising fuel and energy costs
impact your supply chain? 

We live in turbulent times. Exactly how turbulent we will only be able to judge with hindsight.  The internet is changing everything more rapidly than anyone can keep up with.  

Climate change is boiling us slowly, like the proverbial frog in the pan on the stove who doesn't realise he needs to jump out until it is too late and he is half cooked.

We have also forgotten about the resource shortages that put a lid on the economy just before the GFC in 2008.  Remember when crude oil peaked at over $140 per barrel and the fuel price reached $1.80 per litre?  Well that may look cheap a few years from now if the CSIRO's dire prediction of $8.00 per litre by 2018 comes true, (page 10). The impact of this will flow throughout the global economy.  Jeff Rubin wrote about this in his book "Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization".  Jeff Rubin also speaks about it on YouTube for the non-readers.

"How might $8.00 per litre fuel impact your supply chain?"

The set of changes that are inevitably going to be forced upon us by the climate change and the associated mitigation strategies such as carbon taxes, energy efficiency, alternative fuels and energy sources are collected under the banner of Green Supply Chain (see the white papers section of our website).

There are things you can and should be doing now to get your organisation into a low carbon mindset so that you will be prepared better than most as the heat literally gets turned up on your supply chain.  My thesis is that the impact of this will force you to innovate and consider strategies that you might currently reject.  

Taking a further 25% out of the costs of a currently maxed-out efficient supply chain by collaborating with your competitors may well be a business saving strategy. You and your logistics sharing partners maintain your supplier of choice status; whilst others are driving around half empty trucks paying $8.00 per litre for diesel.

I will be speaking on the subject of Green Supply Chain at the upcoming Smart Conference in June this year.



If warehousing, logistics and supply chain are important to your business or your personal career then why not follow this blog by email or on Google+.  To tap in to the full benefits of business and career boosting ideas I suggest you join The Warehouse Performance Initiative.

What if your logistics is already the best? (Part II)

Is collaborative logistics the future?

Yesterday I suggested that you should collaborate* with your competitors to reduce your logistics costs.  If you actually did this what might it look like and where could you take it?

Well it might look like BevChain. Which is a joint venture between Lion Nathan and Linfox.  This is a live example right now of what I am talking about at least in basic principle.  It obviously helps if you start off with a giant like Lion Nathan to kick things along.  

I think the joint venture is the key.  It is not just a venture by Linfox and Lion Nathan is not trying to be a 3PL.  The two together provides the critical volume required to get economies of scale and essential infrastructure and process development that can be sold to other industry players.  I see no reason why the joint venture idea could not be extended to multiple industry suppliers who provide the logistics volume to make a viable business and who also have a stake in the new company and share in the savings.  Indeed the whole thing could be run almost like a co-op to reduce costs to all concerned whilst still providing a return to the 3PL partner.

If you apply some Vested Outsourcing concepts you will ensure that the costs keep going down over time whilst also enhancing the profits for the 3PL partner.  Once you have the basics running well then why not go further up and down the supply chain?  The new industry based logistics company could aggregate demand for common supplies, raw materials or even  stock and buy on behalf of the group.  This would allow them to negotiate better volume discounts and also manage inventory jointly to eliminate multiple safety stocks.  

Managing the total freight task goes without saying, but why not develop a shared services online direct to customer distribution model?  This could be presented to the customer as a category killer single distributor or individually branded mini-sites, but offer to consolidate freight as an incentive to buy across multiple brands.

Of course such a strategy endangers the currently entrenched distributors, and depending on the relative market power differential between maker and distributor, this may or may not be a good strategy.  Generally the theme of the internet age is that the middle man is being squeezed as the makers of products seek direct relationships with their customers.  If the only value you add is a cheap price, someone will eventually find a way to do it cheaper than you.

This idea was developed by DHL with their Pharmacy Supply Model in 2006.  For a while they turned their pharmaceutical pre-wholesale 3PL business into a wholesale distributor and challenged the big three pharmaceutical wholesalers (Sigma, Symbion, API).  The alliance that made it possible with Alphapharm eventually failed and the business could not fulfill its promise, but it was a very innovative idea at the time.

I worked on the DHL Pharmacy Supply project for my first consulting job with Logistics Bureau and it was an extraordinary experience to help develop such a a ground breaking new logistics service.

If the manufacturers and product originators can't or won't develop such a service it leaves the door open for the wholesalers to do essentially the same thing further up the supply chain - if the circumstances are right.  The retail pharmacy supply industry certainly has the right set of conditions for this to occur.  Three wholesalers serving the same market in a highly competitive and increasingly commoditised environment plus a number of smaller distribution operations fragmenting the supply chain.

These are I think the prime conditions to make such a solution possible:

1. A few major players who can reach agreement for a joint venture to pool their logistics operations
2. High competiton with price sensitivity
3. Opportunity to grow by securing some of the remaining logistics and thus make some profit from logistics services that would not otherwise be available to them.

Like all good consultants I have come up with a name for this idea.  I call it the Integrated Collaborative Logistics Service or ICLS for short.  In part III I will discuss some other reasons why I expect to see more of this type of collaborative logistics in future.


* Just in case it is not obvious, the sort of collaboration I am talking about is not anti-competitive or price fixing in anyway. The formation of a joint venture aimed at achieving a low price logistics service does not limit what any of the joint venture partners do with their cost savings.  They can hold on to them to invest in innovative and more profitable business ideas or continue the price war and be back where they started.  I am simply pointing out the next logical step in logistics evolution when a certain set of conditions exist.

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What if your logistics is already the best? (Part I)

Is this the end of logistics as we know it?

Let's say you have done just about everything you can to optimise your logistics processes.  Let's just imagine that you have the best forecasting and inventory management process.  You have the latest warehouse systems and materials handling technology.  You have the best value freight deals and the most efficiently routed transport fleet.  You are now toiling away at the last 1 or 2% of productivity and efficiency gains available to you.  What now?  Sit back and relax because you are now done?

Now lets add in the fact that you have done all this just to stay in business.  You have several major competitors who have done the same things that you have.  You and your competitors have had to do this because you are in a business that used to be nicely profitable but is now a commodity where the cheapest price wins.  The sliced bread market would be an example of this.

At the macro level logistics is just maths and the maths work the same for everybody.  So all else being equal, at some point your logistics simply cease to be a competitive advantage.  If your products are also a commodity then no doubt you have competed in a race to the bottom based on price.  Your razor thin margins mean that your business may well be an unpleasant place to work because cost control is a primary focus.  A serious dose of innovation is required.

What do you do?  Is there even an answer to this question?  Is this the end point of logistics?  How many industries and organisations are already at this point?  Where else can logistics go?
Does anyone care about who delivers your product?  If your logistics has become a commodity and is largely invisible as long as it fulfills the promise, then does it matter who does it?

If logistics is just maths, and the maths works the same for everyone, then why not make it work for everyone?  Once it has reached this point, there is only one place for logistics to go next and that is to embrace collaboration to its fullest extent.  This means collaborating with competitors - no I don't mean price fixing, I mean take advantage of the maths and get your cost reductions from consolidating logistics operations with competitors in industries that serve the same markets.

Each of the retail outlets you supply probably also get a delivery from your competitor or your competitor delivers to a competing outlet nearby.  This is currently done by two vehicles with two drives travelling similar routes.  How is this not a waste?  You each have a warehouse and storespeople and associated infrastructure and administration.  Your individual volume may not justify investment in the most efficient technology but the combined volume would make such an investment worthwhile and reduce the overall costs further.

This is how third party logistics works and how they make their money.  They share infrastructure across multiple clients and charge what the market will bear. This is about the same or a bit more than what it would cost you to do it yourself if you did it well, which you didn't or you wouldn't have outsourced it.

Does this sound crazy?  If so good!  This is just Part I.  I will explore some possible business models for this really not so crazy idea in Part II.

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Passion and Brilliance - a restless tagline

I must confess I am not much of a marketer, if I was then I suppose more people would be reading this blog!  As a result of my continual experimentation   I keep changing my tagline.  A tagline should define what you do and how you do it in a way that is intuitively clear and obvious to everyone.  I can think of at least six that I have tried over the last year.  Here are a few for your personal amusement.

1. enabling value in your supply chain
2. realising value in your supply chain
3. realising value through brilliant supply chain
4. your unfair advantage in supply chain
5. brilliant supply chain
6. passion & brilliance
7. The warehouse improvement specialists*
8. The warehouse performance improvement specialists*
9. Helping you create a High Performance Warehouse**
10. Helping you create High Performance Logistics***

The first three sound like typical corporate nonsense.  Four was too clever and obscure, several people commented to me that they did not understand what it meant. Five is nice enough but bland.  Six is where I am now.  Two words that, hopefully, everyone will understand and also want.

Passion & brilliance is what I want from any professional that I work with, or who is doing work for me.  It is what I aim to bring to any work that I do for clients or in any context.  It is restless because it is never satisfied.  There is always more to do, or a new way to do it better.

Passion & brilliance is what allows me to develop multi-order picking functionality for SAP Business One (SAP B1) for one of my clients when SAP B1 does not even have warehouse location control.

Passion & brilliance is what allowed me to do warehouse design, project management, SAP Advanced Warehouse Management implementation, go live support and then five months of hands on warehouse management for a new warehouse for one of my clients.

Passion & brilliance is no accident but what comes from over 20 years' of experience in logistics management as an operational manager and consultant.  In the end I just love what I do.  I have developed into a career that ideally suits my personality and temperament.  

I have now set myself the challenge of building my own business and improving the productivity and efficiency of logistics for Australian businesses, not for profits and government organisations as widely as I can.  It will be my privilege to serve you also.

As always, my warmest regards to you.

P.S.  I had great amusement after posting this to see a very similar tagline to reject number 4 in use by the MHLC conference in the U.S.  Is it really an unfair advantage if everyone can do it?

*P.P.S. New taglines number 7 and 8.  Update to this post after changing my tagline again.  No I have not abandoned passion and brilliance in my work.  I just decided to try a new tag that more narrowly reflected my increasing focus on warehousing and all its associated aspects.  No promises that it will not change again next week.

**P.P.P.S.
New tagline number 9. No.8 lasted a few months but as my business thinking and marketing skills develop I find myself finally doing one of the first things I learned about business, but did not believe at the time.  That is to narrow your focus on a particular target market.  This allows you to focus on and market to a particular group of customers.  

So the new tagline defines what I do, which is to serve customers with warehouses.  Specifically my market is small to medium warehouses which includes the neglected mid-sized distribution business and warehouse operations of larger service businesses.

The new tagline is simple and clear and also ties in with a theme that I am building around "High Performance Warehousing".  I hope this is my last update on this post for at least for a year or two!

***PPPPS
New tagline number 10. Surely this is it now! I broadened the line slightly to open up the focus to all of logistics and not just warehousing.  After all this is Logistics Help not Warehouse Help.  I had to widen the tagline to suit the services I am offering to support the three pillars of High Performance Logistics, Inventory Planning, Warehousing and Freight.  It's also slightly shorter which is always a good thing.

BTW I saw another "unfair advantage" tagline on ad for an IT company whilst walking through the airport this week.  Maybe I didn't recognise brilliance when I saw it.

Obviously I cannot give you good marketing advice but if warehousing, logistics and supply chain are important to your business or your personal career then why not follow this blog by email or on Google+.  To tap in to the full benefits of business and career boosting ideas I suggest you join The Warehouse Performance Initiative.

Time for a new approach to Warehouse Management Systems

Smaller warehouses need a WMS too! 

It has always stunned me how Warehouse Management Systems (WMS) and the associated technology has failed to trickle down to medium and smaller businesses in the same way that other software and technology has.

At the high end these systems are quite stunning in their scope and functionality.  Modern WMS have extraordinary control over warehouse operations and have extended their functions further up and down the supply chain to provide control from inbound shipments through to delivery and return from customers.

This is great but where are the low end systems with basic functionality that will provide 80% of the benefit for 20% of the price?  Where are the systems aimed specifically at small to medium warehouses?  Mostly in this space you have higher end systems trying to compete and price more affordably, but they can never get cheap enough and they are too costly and complex to implement.  In addition to this the whole scale and approach of their IT support model adds more cost to the implementation and makes the cost of ownership prohibitive.

As one IT business development professional said to me recently 

"...the lower end of the WMS market is 

under-served."  

Quite a massive understatement from what I can see.  Many quite substantial distribution businesses have still not implemented a WMS and the lower end businesses have to wait too long to get a decent return on their WMS investment and so it gets put in the someday maybe basket (nod to GTD followers).

WMS technology needs to
get more affordable

A new lower cost model for software, hardware and implementation services and support are needed if this technology is going to live up to its potential to radically improve the productivity of the tens of thousands of medium and smaller distribution operations not just in Australia but around the world.

I have decided to stick my neck out and build that low cost WMS implementation model.  I have started my search for software and already have one promising prospect.  Now I am on a mission and you can follow the journey on the Rapid-WMS Blog.  Watch this space!

If warehousing, logistics and supply chain are important to your business or your personal career then why not follow this blog by email or on Google+.  To tap in to the full benefits of business and career boosting ideas I suggest you join The Warehouse Performance Initiative.

January 2013 Heatwave wakes us up to the impact of Climate Change

The current record breaking heatwave sweeping across Australia driven by a stalled wet season is another symptom of Global Climate Change.  It really makes those old articles denying climate change and predicting catastrophe from the carbon tax look completely out of touch with reality.  This particular piece of Ostrich like thinking from Viscount Monckton from early 2011, now looks particularly silly given our record heatwave in January 2013.  

How can I improve my supply chain? (Tactics)

Tactical focus

Having the best strategy, systems, technology and infrastructure will be of no use if the day to day operations staff are not trained and executing the procedures required to make it work as intended.  In addition to disciplined execution there also needs to be a continuous improvement program in place to make sure that the tactical approaches are refined and changed over time to meet changing business requirements.

How can I improve my supply chain? (Operations)

Operational improvement

Out of your strategy will come some key decisions about size and structure of the supply chain and what type of supporting systems,technology, processes, infrastructure and service providers are required.  The next step is to review and document what is in place now and then explore what options are available to improve the processes and then select the most suitable systems, technology and infrastructure to support those processes. 

How can I improve my supply chain? (Strategy)

How are your logistics and supply chain operations performing now? 

If like many organisations your operations are a collection of old processes, with poorly integrated systems; then imagine what opportunities you have if you take advantage of some of the current technology and enhanced processes to significantly improve the performance of your organisation!

1PL, 2PL, 3PL, 4PL, 5PL ???

There is clearly a lot of confusion in the industry around these acronyms, what they stand for and what they mean in practice.  I was surprised to see the 5PL term used by a WMS vendor I was looking at and as I searched the net to see how many other people had started to use this term I stumbled upon an old Times of India article that illustrates the confusion and even found a transport company branding themselves as a 5PL.

Seriously? This is a case of

The Yellow Pages misunderstand the internet

After over 18 months of trying (and failing) to get my free business listing in the Yellow Pages I have had one last crack and find that they have changed the rules!  I always thought that in the internet age Google had replaced the Yellow Pages and the value of a listing was marginal anyway but hey, if it's free it can't hurt and may be of some benefit.

So today I have yet another telephone conversation with customer service and they tell me

Windows 8 on a Macbook Air

Hard at work on my MacBook Air, or is that a WinBook?

As a consultant my laptop is my key tool of trade so it is important for me to keep it up to date and functioning at its peak.  A year or so ago I switched from a large and powerful  Windows laptop to the MacBook Air running Windows 7 on Boot camp.  To be honest I have not noticed what was theoretically a big drop in computing power.  As I live in Windows world and had not touched OSX in the past year I decided that I could happily wipe it.  I can always recover it again if I end up selling the Mac later on.

How do I improve the productivity in my warehouse?

This is a lightning overview of how to get some rapid productivity gains in your warehouse.

First off you should really assess the match between business strategy and the warehouse operations. No business is static, and now more than ever fundamental changes in markets and customer behaviour can creep up on a business and require a revised approach to your stock management and order fulfillment strategies.  If your customers are now ordering more frequently in smaller order sizes or your direct to customer online business has taken off then your costs per sales dollar may have sky-rocketed and your warehouse may need a rethink.