Best practices in transportation management typically are developed and implemented by supply chain professionals who are experts within their vertical industry. But what happens if there aren't enough good supply chain managers available in your industry sector?
That's becoming a real issue at companies within the high-tech/electronics industry, where U.S. companies have to be extremely diligent about monitoring their global suppliers (typically Asian) to forestall counterfeits, sustainability lapses, sweatshop type working conditions and product defects. On top of that, electronics companies face unique packaging challenges to ensure their high-value products can handle long-distance transportation, where in a world of extremely short product lifecycles, some high-tech gadgets seem to become obsolete almost the minute they're unloaded at a West Coast port.
According to a recent global logistics study conducted by Capgemini Consulting, 59% of the high-tech manufacturers who were polled say that price pressure to reduce operating costs is their number one logistics challenge. You might think, then, that these companies would be all too eager to solicit help from outside experts, namely third-party logistics providers (3PLs), but the Capgemini study says that isn't so. Only 28% of respondents believe 3PLs can help them.
"Logistics operations within the electronics industry are faced with a number of unique challenges," says John Langley, director of development for Penn State University's Center for Supply Chain Research. "Close communication and collaboration between shippers and 3PLs is vital as supply chains become more complex. As the demand for high-value electronic goods increases, it is more important than ever that shippers are able to draw on 3PLs' knowledge to achieve a solid supply chain."
As the study points out, though, it's more likely that manufacturers will seek out 3PLs to help in such areas as compliance with current global trade regulations and managing shipment routing based on free trade agreement knowledge. In fact, among all industries studied in the survey, the No. 1 logistics service outsourced to a 3PL is international transportation: 78% of all respondents worldwide, and 66% for U.S. companies.
That reluctance to use 3PLs for more strategic purposes, such as reducing operating costs or obsolescence rates, points to a desire to keep those tasks in-house. But as the study points out, there is a shortage of capable supply chain managers to fill all the available management positions. Most companies tend to recruit supply chain talent from within their own companies and industries, but that trend needs to change, says Neil Collins, managing partner, transportation and logistics, Americas, with talent management firm Heidrick & Struggles. "As logistics become ever more intrinsic to a company's ability to attain its business goals, [companies] must be able to put trust in supply chain leaders to be prepared for future business challenges."
One way to do that, Collins says, is to step up efforts to recruit, retain and develop supply chain talent. According to the survey, though, there's a bit of a Catch-22 situation involved: The top quality of an attractive workplace is the company's success and performance. So top supply chain talent is most likely to want to work at top companies, that more than likely already have top supply chain talent that made them successful in the first place. Hence, as Collins notes, it's a good idea to look for talent beyond the usual suspects within your industry circle. The best supply chain managers have skills that are applicable in any type of company.