short takes

Sep 01, 2000 9:30 PM  By

Customers First Like just about every other industry today, the third-party logistics (3PL) business has become keenly aware of the importance of keeping customers happy. A Tompkins Associates survey of 62 CEOs of 3PL firms reports that 68% of respondents rank customer service improvement as their leading priority, placing it above such strategically important activities as focusing on the core business, developing performance measures, and reducing costs.

The study assesses those requirements that the primary decision makers at 3PL companies consider vital to form an efficient supply chain and gain a competitive advantage. Over 55% of the respondents manage companies with more than 1,000 employees and over $250 million in annual revenue. Industry segments served include electronics, retail, automotive, and groceries; the functional areas most commonly outsourced are warehousing, logistics information systems, shipment consolidation, carrier selection, order fulfillment, and product returns.

As next in importance to customer service improvement, respondents – choosing from a list of 20 activities – cite increased supply chain visibility, improved operational efficiency, employment of e-commerce solutions, and response to market and competitive influences. The Tompkins researchers point out that integration and turbulence are the two major logistics challenges that businesses face, and that dealing with these issues involves taking a holistic view of the logistics network and being able to cope with the “continuous whitewater” of change in that network.

For more information, contact Tompkins Associates at 2809 Millbrook Road, Raleigh, NC 27616; phone (919) 876-3667; or visit www.tompkins.com.


 

short takes

Sep 01, 2000 9:30 PM  By

For Good Measure Effective logistics measurement separates business leaders from laggards, contend the authors of a new study conducted by the University of Tennessee for the Council of Logistics Management. Called Keeping Score: Measuring the Business Value of Logistics in the Supply Chain, the report discusses the lessons learned from the logistics measurement programs of more than 350 companies. The majority measure some logistics activities, but few track information that would reveal how they perform from the viewpoint of customers and suppliers. A large portion of the respondents to the CLM survey do not measure invoice accuracy (48%), cycle time (38%), backorders (36%), line item fill (31%), customer complaints (23%), or on-time delivery (21%), although 55% cite customer complaints as being most important to the company, and 61% accord that status to on-time delivery. Furthermore, most logistics managers focus on the performance of internal functions such as warehousing and on individual activities rather than end-to-end logistics.

The study notes that evaluating logistics performance can provide considerable benefit. At 3M, for example, a measurement program brought about a major cost reduction in logistics over five years, and helped the company improve on-time delivery by 32% in three years. Modus Media International, a large manufacturer and distributor of computer software and manuals for high-tech companies, attributes its improved profitability to comprehensive logistics measures.

However, the obstacles to successful measurement are many. They include lack of commitment from top managers, outdated assessment strategies, contradictory and confusing standards, internal reluctance to share data, and disagreements about basic logistics terminology. (For instance, to some manufacturers, an “on-time” shipment is one that leaves the plant on a specified date; to customers, “on time” means the day they take possession of the goods.)

For more information, contact the Council of Logistics Management, 2805 Butterfield Road, Suite 200, Oak Brook, IL 60523; phone: (630) 574-0985; Web site: www.clm1.org.


 

short takes

Sep 01, 2000 9:30 PM  By

Cheat Sheet Did you know that using an e-commerce system can expand your average order size by as much as 30%? Or that it can help you cut per-order costs to less than $1? These and other ways to use cyber solutions to your advantage are outlined in “E-Commerce Road Map,” a booklet published by Ironside Technologies. A crib sheet for the time-challenged – or just Web-phobic – executive, this handy little guide offers a quick rundown of the questions to ask before buying e-commerce software, ways to cost justify the often substantial investment (an invaluable step-by-step example helps you do the math on the spot), and methods to determine what kind of system you should buy and what features you can’t do without.

For more information, call Ironside at (800) 495-4766 or e-mail your request to information@ironside.com.