Logistics Management Alert–Top Ten Lessons Learned From Watching Logistic Service Providers for Years

Logistics Management: Here is what Louis Yiakoumi Learned from his many years as Founder & publisher of the Automotive Logistics Group:  

1.Don’t Try to be Toyota 

A lot of top executives still want to follow the Toyota way, lean, but that is out of favor now. This change has been in place for a while. I remember maybe 20 years ago when I started in automotive logistics a top logistics manager from a German carmaker telling me that the order from the board was lean above all else. But after a year they realized that whatever savings they were making from lean inventory was overtaken by their spend on emergency shipments. Perhaps board members just know what they remember from headlines or books they read a few years ago about lean and the Toyota Way. Have new global trade realities and the current pandemic meant a change in the lean philosophy?

2, Put the Load on Logistics

Logistics leaders want their customers (manufacturing) to tell them what they want, but not how to do it. “Tell us if they need these parts to this place at this time, then leave it to logistics.”
Logistics is often stuck in the middle with purchasing, manufacturing dictating their requirements but usually the customer is considered to be the plant. Everyone’s needs are important but they have to trust the logistics department.

3. Use Current rules for investing:

Is it critical? Can it be postponed? Cost savings and cash flow are always important but never more than now.
If it is easy to cancel, then why was it on the list in the first place? What has your experience been?

4. Realize that Digitalization is an important investment.

Considered to be an important tool for reducing costs and visibility. And for connectivity of partners.
While investment is being cut, digitalization is not an easy cut. In recent times of emergency actions, there has often been for speed and simplicity, back to the basics including Excel.
But the real speed and flexibility that is now needed, more digitalization is key.

5. Remember Logistics is still a people business

Despite the importance of IT, tech, IoT, etc. It is still all about the people.Note No. 4 above has to be put together by people and to help people to communicate. Digitalization does not take over what people can do. It enhances the role of humans and will only work well if that is understood.

6. Leaders in Logistic Should Listen More

LSPs too often want to sell what they do as opposed to listening to the customer (OEM) and try to fulfil their needs
I am often asked by LSPs to introduce them to vehicle makers or parts supplier logistics leaders.
When I ask them why, what can they offer the prospective customers, the message is too often very basic.

“I can save them money”. How often have you heard that from just the introductory email? Don’t get me wrong, cost saving is important but not different enough. The customer needs to know on what basis LSPs make that claim. My message to LSPs is find out why, where, and how you can make a difference to each particular company?

I also understand that logistics leaders find the “I can save you money” pitch a bit insulting. Is the LSP saying “you’re not doing your job well”?

7. Logistic Service Providers Overselling OEMs

Too often, there is a disconnect between LSP sales and their operations.
LSPs need to tighten that up to work with the OEMs. Like every industry, sales tend to make promises that their operations team can’t fulfil.
That is just a waste of everyone’s time.

8. Industry Alert: LSPs are not changing enough.

LSPs too often want to sell what they do as opposed to listening to the customer (OEM) and try to fulfil their needs. I am often asked by LSPs to introduce them to vehicle makers or parts supplier logistics leaders. When I ask them why, what can they offer the prospective customers, the message is too often very basic.
They are not prepared to change especially if it needs some investment. A common comment from carmakers.
They do not want to take risks, partly because it is a small margin business. They also feel the risk / reward is very poor.
What are you doing to ensure that you are the customer of choice for the best LSPs, and to encourage them to share their best new ideas with you?

9. Get on Board; China Riding the Rails to Europe

Belt & Road (Linking China with Europe by rail.) Is coming up more and more in conversations, becoming very important.
Many want introductions to experts. How are you linking Asia to Europe? Are you using or considering Belt & Road?

10. Carmakers Should Put Production & Service Parts Together

More carmakers are putting aspects of production and service parts logistics together, to find synergies and of course cost savings.|
This is not new but just being discussed more.
It makes sense that there are synergies but are the results and benefits at the levels expected. Is that your experience?

Louis Yiakoumi  +44 7984 421621 Louis@LConnect.co.uk;  Wechat: LouisLogistics; Skype: LouisYiakoumi; And always available on WhatsApp

 

Leave a Reply