One of our current Two Minute Warnings raised an essential query for C-Level executives: “How critical are you about addressing your transportation and provide chain points?”
The response has resulted in some very attention-grabbing conversations with CEOs and C-Level executives. Overall, they don’t seem to be joyful about hovering freight prices, and so they have questions concerning the CODE RED situations within the transportation market. They are also questioning what their corporations ought to be doing to handle how provide chain points are impacting their operations and backside line profitability.
Answering their questions on occasions within the logistics trade is fairly easy. Answering their questions on value mitigation methods or what their firm might be doing to guard their provide chains is one other problem. That is why I preface my feedback with this reminder: When it involves managing provide chain and logistics points, your organization has two selections: get critical or get severely damage.
Most C-Level executives need to consider that their firm is critical about provide chain points. But there are a selection of indicators that present C-Level executives might not be as critical about their provide chains as they must be.
As MIT Professor David Simchi-Levi famous in a current webcast we hosted for C-Level executives, most corporations have by no means stress examined their provide chains and recognized their vulnerabilities.
Many C-Level executives can’t move a short, three query Supply Chain Diagnostic quiz that identifies “will need to have” provide chain capabilities.
With no written Transportation/Supply Chain Spend Management Plan that features contingency planning, they usually discover themselves in a reactive, or “firefighting,” mode to maintain their enterprise operating.
They overlook the affect of how their “siloed” and “turf defending” group is affecting their provide chain and skill to compete within the market.
Participants in two of our current webcasts heard a typical message: Great provide chains don’t occur accidentally, they occur by design. So C-Level executives should be critical and dedicated to supporting these entrusted with managing their transportation and provide chain actions.
In our current webcast for CEOs and Presidents, members heard from MIT Professor and provide chain knowledgeable David Simchi-Levi, Peter Tirschwell from the Journal of Commerce, and the CEO of Werner Enterprises, Derek Leathers. They all highlighted that with tight capability throughout all modes, there can be pressure within the provide chain for the rest of the yr.
David Simchi-Levi famous that when (comparatively few) corporations “stress check” their provide chains, it’s an indication that they’re taking their provide chain capabilities with no consideration. They need to consider that their provide chains are okay.
In one other webcast, “Grab A Seat At The Table,” (with our mates from NASSTRAC and CSCMP), we additionally highlighted how few C-Level executives can “move” our three query quiz that highlights greatest practices in managing provide chains. When a CEO tells us they’re critical about provide chain points, however can’t reply any of the three questions that assess essential provide chain markers, it ought to be a clarion name for transportation and logistics professionals: You want to speak upward to achieve help out of your C-Level executives!
Our nice group of VPs and SVPs on this webcast shared how they’ve carried out simply that: Communicated upward in order that their C-Level executives perceive the problems and may make knowledgeable selections concerning the help/sources that can be required to handle what is going on within the transportation markets.
In closing, there are two key factors to think about. First, corporations who’re actually critical about provide chain points have a written Spend Management Plan that addresses how they handle their provide chain and transportation processes. This plan additionally addresses how your organization will deal with “contingencies” and reply the “What if?” questions.
Second, a pleasant reminder for C-Level executives who say they’re dedicated to managing their provide chains: You can’t delegate dedication! Specifically, delegating doesn’t imply fixing. So if your organization has any semblance of being a siloed and turf defending group, now greater than ever, your crew wants C-Level help and dedication to assist them handle in these terribly difficult occasions.
Fortunately, there are nice sources for executives who’re actually critical about managing these transportation and provide chain points. For instance, our Rapid Assessment course of is tremendously efficient in jumpstarting an assault on silos by bringing individuals collectively from all areas of the corporate (a.okay.a. gross sales, procurement, operations, logistics, provide chain, and IT) to allow them to perceive and deal with how their selections have an effect on your transportation prices and provide chain capabilities. Resources like this may be an efficient means of conveying the message that C-Level executives are certainly critical about managing their provide chain points.
About the Author
Mike helped develop TranzAct Technologies to turn into one of many largest privately held logistics info and freight audit and fee corporations within the United States. He is extraordinarily energetic in and participates on quite a few boards of trade particular organizations and is a extremely wanted speaker for transportation associated matters throughout the nation.