As we see it, one of the most unfortunate aspects of logistical developments in the past three decades is the virtual take-over of the large-scaled enterprise tactical planning space in logistics by those whose panorama is confined to what they believe to be the capability limits of their existing system structure & architecture.
The problems associated with the rise of logistical process gatekeepers within enterprises, especially those that are system cadres, or devotees, are often compounded by these same people's lack of experience in the wider logistical world. Many in the logistics space now appear to have evolved their way to the top of logistics organisations, on the back of credentials which are underwritten by various accreditations & certifications. There is often a rightful emphasis placed upon the merits of a given adaptable philosophy in respect of logistics & enterprise planning, but in translation the output has often become process dogma. This would be an unhealthy state of affairs for any enterprise over time, and it is especially so today as we confront new market realities.
When logistics professionals become captivated by the merits & soundness of their existing process it is sure to inhibit their employer's enterprise when it is required to respond to emerging events that require a significant structural shift. This scenario becomes especially burdensome for enterprises when their imperative requires more adaptable logistical architecture, that which might respond faster to the more cantankerous consumer demand scenario we see unfolding today. Doing as well as the guy down the road, or any other user of their enterprise software provider, may not cut it at the enterprise viability level when large swathes of the consumer merchant-supply chain business model is threatened by disruption (or failed efforts at achieving disruption).
To illustrate our message, and talking about one of those cantankerous cases that we have observed elsewhere, we will initially cite here the example provided by the US’s Afghanistan War “bump-out” logistics planning team's last-minute recruiting efforts. This team were seeking supplementary human resources, and their executive appeared to be looking beyond a process-cadre style of human asset. And our point is that their HR sourcing team had very good reason to be looking beyond those captivated by existing logistical planning architecture. It is this style of circumstantially driven, & enterprise-specific, case that we wish to start exploring today.
In the cited case, the US military at that time had very likely already done the sums, based upon all the existing logistical processes they had available to them in seeking to complete their Afghanistan “bump out”. Perhaps they didn’t like what they were seeing? There had been a gradual build-up of assets in Afghanistan over many years, the inbound logistics costs had already been enormous (plainly ridiculous in commercial equivalent terms) & the fast exit was mandated. The "bump-out" would be a very different & far more challenging beast.
The soundest logistical advice the military hierarchy would have received from any free thinker would likely have entailed the planning team manager making a request for their political masters’ to seek to improve their working relationships sufficiently (within the near-term time constraint mandated by the force withdrawal) with those nearby states that would have afforded the logistics team access to the optimal logistical corridors & transit opportunities. However, the eventual outcomes reflected a scenario where the politicians were only able to respond within time at the margins (over-flights etc).
These Afghanistan “bump out” logisticians were always facing an uphill task, one where options narrowed as the political opportunists started making their next plays - before extracting themselves from their ill-fated last one. That had immediate consequences at significant logistical pressure points & imposed new constraints. The US military did, however, apparently source a few more capable logistical minds; and they then set about reducing the task by wrecking, & dumping, & redirecting assets.
The result was that the US military generally muddled their way out - while testing the Russian’s patience to the limit; and apparently taking it past the said patience limits of their central Asian “partners”.
But we pause here, and reset, because we were supposed to be talking about something derived of my experience. Having been part of the team handling the Sydney Olympics’ official broadcaster NBC’s "bump-out" air charters & shipping, did however, see us appreciating the Afghanistan "bump out" effort as it unfolded. Although this latter task was far smaller, here too there had been a long build up of inbound infrastructure (1 year in this case), and all but the inessential needed almost immediate repatriation (to cover the next big world media event/s in Europe & the Americas). And it wasn't down to fortune that we did far better than muddle our way through, we executed using a bespoke process.
Why should a case based upon a gramophone record market resonate better than that of oil & energy services, given the latter's just-in-time movement to far flung drilling sites of down-hole nukes & mud?
Well oil & energy services companies are able to selectively plan their inventory's levels & geo-locations. They have established lead times for all their customers & geographies. In my experience, these enterprises planned & carried inventory at certain locations that provided a patterned contracted level of response & support to their customers. Under this operating basis, the oil & energy services providers then looked to engage the best available transport professionals to meet or improve on delivery outcomes; or more usually to save them in the case that supply shortages or breakages meant drawing on inventory from further away than anticipated.
There wasn’t, however, much of a chance of another oil or energy services competitor turning up in the meantime at their customer's drilling site & making a sale with a similar piece of inventory, one that could substitute, given the nature of the turnkey-styled contracts prevalent in that industry.
The import gramophone record market, however, was essentially - in its time - more dynamic from the logistical point of view. This stemmed from the dynamism of the import vinyl record pop music market. The on-line B2B and retail world of today has certain synergies with that vinyl record market in respect of the international sourcing model, and it is this facet that we wish to explore.
The music market of the cited days was a discretionary consumer purchase based one. In such a case, where non-availability or non-delivery was encountered, a buyer was likely to source elsewhere, or buy something else entirely. An import record shop’s loss of a customer at that time can therefore be an exemplar of an on-line buying platform’s discretionary purchase & repeat business loss today.
If you take today's on-line consumer scenario in the approach to the Xmas peak, the consumer is likely, despite loyalty programmes etc, to buy from one of a diverse array of platforms - or a bricks and mortar competitor - based upon the expectation of a delivery being fulfilled, irrespective of allegiances. Similarly, the B2B platform buyer, one who has an array of on-line vendor choices, will more often buy-to-stock dynamically, with a weather eye on opportunistic pricing and being more immediate in their reaction to the latest stock-turn rates, than was possible previously.
Back-in-the day, however, an import record shop's game plan was more specifically adapted to its limited market. The owners would be trying to beat the local labels to the street with trending music, or supplying a niche market that local vinyl record production-run economics could not support. Like the mainstream market, however, popular demand for a given recently-released record usually waned quickly. Stock that could not be moved brought the undoing of many of these import record merchandisers. The wider industry environment at that time was also full of traps. It was replete with boondoggle mandates, but this is another story, and it is better left unexplored here.
Given the recent resurrection of vinyl record sales internationally, it is interesting to note that some of the old production run & distribution issues have resurfaced in the mainstream media:
The matter of interest for us here, however, is that the single most important concern for the import record shop proprietor back-in-the-day was the necessity of not being beaten for stock arrival by their competitor.
In the said times, it was a non on-line environment where orders were taken at origin in New York and London by phone or telex on a Thursday; product was shipped on a Friday, yet it was expected to be on shelf by the following Wednesday. The Australian import customs clearance process was also at that time uneven, & it took 48 hours or more (juxtaposed with today where most commercial import shipments are cleared within minutes).
An interesting side-factor was the back-chat channel between the various import record shops (bred of the incestuous nature of the general industry-wide environment) about what they had ordered, what had shipped, who got theirs, and when.
This chat-loop fed back to the suppliers at source who were often pressured to act “fairly”, and to the transport carriers whose performance was judged on the basis that a pass was on-time, a service irregularity was when you delivered late – but you had also delivered their competitor’s products late, and a fail was when their product was not delivered on-time - but their competitors had been.
Another continuously evident aspect of this trade was that there was always an individual gramophone record of which the import record shops did not have anywhere near enough stock-in-hand on any given day. This red-hot stock-keeping unit (SKU) issue, where product runs - rather than walks - out the door during demand spikes, and where supply chain options & corridor widths are assumed to be limited, is one we will return to.
To close today's case however, in the import record market we have described, the transport provider choice made by the owners of most of these record shops was to select only one or the other international freight forwarding company, from a field of hundreds. Many also employed the same import customs broker. Those select transport services vendors were said to be those that understood their business.