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Merging of responsibilities is key to supply chain management


December 15, 2010
by Beverly Cramp

Fiscal constraints and the ongoing emphasis on globalization make today’s business environment more challenging than ever. Senior management is looking for improved core competencies and supply chain professionals are in a prime position to contribute, says Laurie Turnbull, a supply chain consultant for the Cole Group.

“There are a lot of things happening in our field,” said Turnbull at the Canadian Institute of Traffic and Transportation’s 2010 Symposium held in Vancouver, BC in October. “Global sourcing of materials and the increasing importance of supplier/vendor relationships are creating opportunities for people in charge of transportation management programs. They are in a prime position to produce competitive advantages for their companies.”

Turnbull suggested global sourcing affects four main areas:

Product, freight, and ancillary costs. In particular, purchasing from international sources makes it more difficult to ensure the final accuracy of the landed costs of materials, as goods travel longer distances and the logistics becomes more complex.

Shipping terms of sale. Longer shipping times, more shipping modes required for one shipment, and the increased possibility of damage along the route are all factors creating new problems for supply management.

Compliance irregularities. Customs and cargo security issues rise with the number of borders that must be crossed. Lack of compliance becomes a greater risk and can lead to fines that increase transportation costs and can cause delays.

Excess pipeline inventory. Because the time it takes to receive shipments transported over longer distances can double or triple, there is a tendency to overbuy. Extra goods in inventory are a buffer against running out of raw materials and causing manufacturing disruptions.

“Who pays for the extras costs that can occur in these new supply chain parameters? Will it be purchasing or the transportation department?” Turnbull asks. “It makes sense for these two areas to work together closely and share information. In fact, global sourcing has resulted in the blending of these two traditional competencies. It is more common now to find that those companies which have made the transition towards combining transportation and procurement are becoming supply chain leaders.”

To lend credence to his point, Turnbull noted that some of the titles of attendees at the symposium showed this merging of responsibilities, such as: manager, purchasing & traffic; general manager, transportation, logistics & international procurement; director, supply chain management; and director, purchasing & logistics.

He concluded that “these two skill sets will lead to promotions for the individual who has both.”

Olympics logistics a success
The final session at Reposition 2010 was hosted by three leading logistics professionals for the Winter Olympics held in Vancouver last February. They took responsibility for the Games’ success.

“We were the invisible glue that made the Olympics a success,” said Tony Beck, the former director of logistical operations for VANOC, the organization responsible for running the games.

“The magnitude of stuff, people, and events that had to be orchestrated was staggering. Over 55,000 staff and volunteers coordinated athletes from 82 countries, approximately 10,000 accredited media, and more than 800,000 items of furniture, fixtures and equipment that had to be moved over 80 Olympic sites. But we accomplished.”

Photo: beverly cramp