FYI

BALANCED BUDGET

U.S. companies spent about $1 trillion on domestic logistics in 2000, according to the International Warehouse Logistics Association. Transportation accounted for a hefty 58% of that amount ($580 billion); inventory carrying costs, 30% ($300 billion); warehousing, 8% ($40 billion); and logistics administration, 4% ($40 billion). An estimated $700 million of the total went to third-party service providers, whose gross revenues are estimated to reach $69 billion by the end of 2001.

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FALLING DOWN

Industries Declining Fastest	Projected Job Loss (1996-2008)
Crude petroleum, natural gas, and gas liquids	-46%
Apparel	-36%
Coal mining	-35%
Footwear, except rubber and plastic	-34%
Metal cans and shipping containers	-32%
Sources: Bureau of Labor Statistics, The New York Times

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OLD MATH

It doesn't take a numbers genius to figure out that poor customer service subtracts revenue from a business. Work it out as shown in the example below:

1.	Annual revenue	$10,000,000
2.	Total number of customers	2,500
3.	Percentage of dissatisfied customers	25%
4.	Number of dissatisfied customers (line 2 × line 3)	625
5.	Percentage of dissatisfied customers who may switch or stop doing business with you	70%
6.	Number of dissatisfied customers who may switch or stop doing business with you (line 4 × line 5)	438
7.	Average revenue per customer (line 1 divided by line 2)	4,000
8.	Revenue lost through poor service (line 6 × line 7)	$1,752,000
Source: James T. Kenny, Ph.D., Western Illinois University

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TESTING, TESTING

1. How many dot-commers have been laid off since January 2001?
   (a) 300
   (b) 25,450
   (c) 90,000

2. How much do workplace disputes cost U.S. companies each year?
   (a) $372 million
   (b) $35.4 billion
   (c) $1.2 trillion

3. What percentage of total order cost is direct labor?
   (a) 50%
   (b) 35%
   (c) 84%

Answers: 1(c) 2(b) 3(a)

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THE LAST WORD

“If you're not innovative, the workforce isn't going to be there. I teach English for free in my facilities, and my employees love it. In some of the larger cities, we offer college courses.”
— William G. Pagonis
EVP of logistics, Sears, Roebuck & Co.

“Warehouses are the link in many supply chains. What we do has an effect up and down the supply chain.”
— Thomas W. Speh, Ph.D.
Professor, Miami University

“Follow the inventory. That's where the action is, has been, will be.”
— Robert V. Delaney
VP, Cass Information Systems, Inc.