Logistics - my humble perspective

Is Logistics a science or an art? Is it a cost center or a growth driver? Is it a front end or back end job? Is it a commodity or a specialization? Should we Buy/Invest or Outsource logistics? Is it uni-dimensional or multi-dimensional profession?

If you are intrigued by such questions, then please read on further. It is my humble attempt to answer some of these questions through my experience in logistics over the last 15 years. These are my personal opinions and does not necessarily reflect the thinking of organizations I have worked with. 

Logistics has never been a rocket-science but the recent digitization has made it quiet sophisticated, predictable and even more reliable. The irony is that despite working with >99.9% efficiency, unfortunately it is often called out for that 0.1% failure. Its like blaming the last runner for the loss in the 4x100m relay race for the shortfalls of previous three runners. Despite this most logisticians move on to the next day with their chins up.

Logistics becomes an art when there is a big disruption due to a natural calamity or political unrest. Only few logisticians can navigate through such challenging times successfully on the back of their ingenuity and contacts in the industry. 

If you go strictly by a theoretical view, Logistics is a non-value added activity for which customer is not ready to pay; it is a waste which must be eliminated. May be 3D printing will make logistics redundant in coming years. But this definition has been challenged very recently, the rise of consumerism has proven that consumers and customers are increasingly ready to pay extra for convenience and instant gratification. Logistics plays a central role in today’s ecommerce as delivery conditions are one of the top3 considerations by the shopper. Thereby shifting logistics from a cost-centre to a growth driver or a profit centre. 

A true logistician looks at their job beyond transport/warehousing and takes pride in fulfilling sales orders and realizing revenue for the organization. I believe it is as much a front-end job as that of a salesperson who generates the order with the customer. Hats off to millions of logisticians who sacrifice their personal lives on month-ends/quarter-ends/festive-periods to ensure that each customer order is serviced on-time in-full. 

The decision to own or outsource primarily depends on the ability of an organization to run it effectively and deploy it as a competitive edge. Most consumer goods companies have in-sourced transport planning and strategic warehousing/distribution centres operations while outsourcing the rest to 3PLs. This also brings us to another decision of which 3PL to choose; a multi-national or a local 3PL? Should we go for a dedicated warehouse or a shared facility? In my experience, there is no straight answer to these questions, it depends on various factors like scale and complexity, market maturity and 3PL capability. Generally, an MNC 3PL provides strong systems and processes while a local 3PL is more agile and flexible to meet customers’ needs. Whatever the model, the key success factor is an objective KPI based relationship based on trust.

There is lot more to logistics than service and cost; the importance of sustainable and responsible logistics is increasing day by day. Logistics accounts for ~30% of worlds green-house gas emissions and we must deploy cleaner solutions with speed. Truck driving is not a preferred profession due to the enormous challenges faced by the drivers, there is an urgent need to make logistics human. I genuinely appreciate the approach of Rivigo in this area. Lastly, there is a huge scope for making Logistics a more diverse and inclusive function. Women in Logistics and Transport (WILAT) Srilanka is doing some good work in this area. However we need to do a lot more to include different sections of society and make this function a more vibrant and dynamic. I wrote about a small initiative we took in India few years back in my post earlier this year, successfully integrating 25 differently-abled people in one of our re-packing operations.

Finally, logistics is not just about PERFORM but also about TRANSFORM. Thankfully logistics has attracted lots of entrepreneurs and disruptors in last 5 years. Some of the start-ups I had the pleasure of working with eg Blackbuck (Zinka Logistics) and GreyOrange have transformed the industry with innovation and deep understanding of their stakeholders.

The future looks even brighter with logistics becoming a key success factor for more and more businesses.

Thanks a lot for your time and attention, I welcome your comments and feedback.