Who, what, when, where, why, and how to move big or lots of stuff? Welcome to the wild world of logistics. Mr. Page Siplon, Executive Director of the Georgia Center of Innovation for Logistics, graced the stage for our May Dunwoody dinner, sharing his big picture view from state level and beyond. Named by Georgia Trend Magazine as one of 2013's "Top Most Influential Georgians," he well-qualifies to expertly speak on the topic.
"Every Supply Chain is unique—and ever-changing," proclaims Mr. Siplon, who cited the top 3 change agents: 1) Population and Demand, 2) Infrastructure Investment, and 3) Federal Policy.
US population is 310+ million, with Gen-Y comprising nearly a 1/3 of us. These are the folks everywhere always on smart phones. Exploding multi-channel delivery in the form of mobile and social e-commerce tools are quickly changing how we look at logistics. Today ...
• 91% of all purchases are made in physical stores; within 5 years it will be 76%
• In 12 years, 30% of all retail sales will be made online
• 30% of sales growth in the last 3 years is attributed to 5.5 million people who bought online for the first time in 2010
In these fast times, customers expect personalization, too. Witness Nike's highly visual, co-creative "build your own shoe" program, generating $100M+ per year. While the "faster, better, cheaper" rally cry continues, we may be wise to add "reliable" ahead of all three.
Infrastructure investment? Globally, 70 million people enter the middle class each year—virtually ALL in emerging economies—so effective import/export is critical. Nationally, 70% of all US consumers live east of Dallas and Chicago. Georgia is central to them, with the Port of Savannah being key. It is also the shallowest of the world's top 24 ports, severely restricting large vessel access. Studies for SHEP (Savannah Harbor Expansion Project) have the dubious honor of being the longest running in history—16 years so far. Construction may actually begin later this year. For the big picture on endangered US seaports, see
http://aapa.files.cms-plus.com/AAPA_infographic_final_red.pdf
Including support and related industries, there 11,000 Logistics providers in Georgia. No matter where you are, a long list of local community asset factors impact your nearby logistics: Access tops the list—market, container/bulk port, highway, and rail. Then we add regulatory, labor, business, telecommunications, workforce, utilities, life quality, weather, and more.
It's easy to see how complex and relatively all-inclusive logistics is. Some V-words to always consider are volume, velocity, and visibility. The corresponding C-words are capacity, capability, and connectivity. These huge elements don't self-assemble into smooth flow. As Thomas Edison cautioned, "Opportunity is missed by most because it is dressed in overalls and looks like work."
Finally, ever-evolving Federal policy is a big deal for logistics. The US Dept. of Commerce Supply Chain Competitiveness Advisory Committee and the US Dept. of Transportation's Freight Advisory Council both input impactfully from a high level perspective, shaping steps forward.
Now, as you order online or pick out in-person your latest apparel, plastic item, or durable good at Wal-Mart, Sears, or Home Depot, (not to mention food :), you can ponder a little more in-depth about how manufacturers get raw materials, make things that move through distribution, and finally become conveniently available to you. What a project!