Wednesday, March 14, 2007

The Right Stuff at the Right Place at the Right Time

Logistics may not be the hottest buzzword in town, but without it there wouldn’t be much of a town, or a business for that matter. As the Swedish king Karl XII, Napoleon and Hitler learned the hard way; armies can’t win the war without good logistics. And neither can corporations.

Back in the early 1990’s, I interviewed Lt. Gen. Gus Pagonis, who had just become head of logistics for Sears, Roebuck & Co., after having led the logistics effort of “Operation Desert Storm.” He did it so well that General Norman Schwarzkopf dubbed him the “Einstein of Logistics.” He saw many parallels between civilian and military logistics. One was that logistics should not be seen as a profit center. Cost is just one aspect of logistics, and it must be seen in the perspective of the overall goal, otherwise we will sub optimize, the general warned:

“If we produce a product and the marketing people advertise it on Saturday when the kids will be watching cartoon shows, then that product must be on the shelves when the mother and the kids go to the store. If the transportation person of that organization is profit oriented, he will try to find the least costly mode of transportation to get the item there. That can be by barge or boat. Well, the item doesn't get there for four weeks and you just wasted a million dollar marketing. Yet the transporter may ship that item for a penny a thing versus five pennies by air. What you do as a logistician, and that is why I think there should be a senior vice president of logistics in every firm. He must cross all functional areas and makes sure that he takes so many by barge and so many by air.”

That was over twelve years ago, and since then the world has gone global.

When I began planning Currents’ logistics issue, the first name that came to my mind this time, was Bo I. Anderson, who in 2001 became vice president of the General Motor’s worldwide logistics program and in 2005 became its top worldwide supply manager. He is also rumored to be the next CEO of the auto giant.

Getting the Goods Where They Are Needed

They Wanted a Non-American for This Job

I also interviewed Sten Wandel, an international expert on logistics. He has studied the topic for four decades and is currently professor of engineering logistics at the University
of Lund in southern Sweden.

Sweden's Logistics Paradox

Hans Sandberg

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