Executive Briefings

Logistics Service Providers Tackle Market Challenges

When companies encounter a conflict between cost-efficiency and customer responsiveness, something's got to give. Marc J. Heeren, vice president of strategic sales with Damco, lays out the factors involved in striking the right balance.

The biggest challenge facing Damco's customers today is economic in nature. "We're just coming out of recession," Heeren says. "That puts a lot of constraints on the availability of capital." As a result, "cash remains king" for many companies that need working capital to expand or improve their operations.

Supply-chain talent is another area of concern. Heeren says the industry is growing increasingly more complex, with an explosion of SKUs and sales channels. At the same time, shippers and service providers are coping with constant shifts in ocean-carrier capacity, along with unpredictable demand on the buyer's end.

Rising fuel prices and other expenses create the need for maximum operating efficiency. "One of the themes that continues to pop up is building a responsive and efficient supply chain," says Heeren.

At the same time, there's a constant need to balance the drive for efficiency with a high level of customer service. "The ruthless reduction of cost will decrease the ability to respond to changes," warns Heeren. The solution lies in building responsive supply chains that can shift inventory to where it's needed on short notice.

As companies rely more heavily on outsourced services, they come to embrace the offerings of lead logistics providers, sometimes called fourth-party logistics companies. Whatever the term, their goal is to manage the supply chain on an end-to-end basis, without the client losing control of essential processes and service quality.

The new generation of "control towers" can help to monitor key performance indicators and manage activities on a highly granular basis. "The control tower is a valuable, viable concept," says Heeren. "Industry needs to take it a step further."

To view video in its entirety, click here


Keywords: supply chain, supply chain management, supply management, inventory management, global logistics, third party logistics, logistics management, logistics services, supply chain planning, supply chain risk management

The biggest challenge facing Damco's customers today is economic in nature. "We're just coming out of recession," Heeren says. "That puts a lot of constraints on the availability of capital." As a result, "cash remains king" for many companies that need working capital to expand or improve their operations.

Supply-chain talent is another area of concern. Heeren says the industry is growing increasingly more complex, with an explosion of SKUs and sales channels. At the same time, shippers and service providers are coping with constant shifts in ocean-carrier capacity, along with unpredictable demand on the buyer's end.

Rising fuel prices and other expenses create the need for maximum operating efficiency. "One of the themes that continues to pop up is building a responsive and efficient supply chain," says Heeren.

At the same time, there's a constant need to balance the drive for efficiency with a high level of customer service. "The ruthless reduction of cost will decrease the ability to respond to changes," warns Heeren. The solution lies in building responsive supply chains that can shift inventory to where it's needed on short notice.

As companies rely more heavily on outsourced services, they come to embrace the offerings of lead logistics providers, sometimes called fourth-party logistics companies. Whatever the term, their goal is to manage the supply chain on an end-to-end basis, without the client losing control of essential processes and service quality.

The new generation of "control towers" can help to monitor key performance indicators and manage activities on a highly granular basis. "The control tower is a valuable, viable concept," says Heeren. "Industry needs to take it a step further."

To view video in its entirety, click here


Keywords: supply chain, supply chain management, supply management, inventory management, global logistics, third party logistics, logistics management, logistics services, supply chain planning, supply chain risk management