Tag Archive: turnaround

The Global Logistics Landscape

February 15th, 2019

In the past two weeks, I attended the CSCMP State of Logistics event, am preparing for the Future of Supply Chain & Logistics reception event as part of the leadership team and have debriefed with LMA Associate, Elizabeth Warren who attended the State of the L.A. Port and the State of Long Beach Port events. To summarize, I’ll borrow from the Port of L.A.: “Busier, safer, greener”.

Still number 1 and 2 in the U.S., the ports of Los Angeles and Long Beach increased volume last year to 9.5 million TEUs (twenty-foot equivalent units) and 8.1 million TEUs respectively.  With the threat of tariffs, there was a surge of imports around the holidays, creating record-breaking days in both locations and the second busiest month in history at Long Beach.

Significant progress has been made in terms of air emissions. From 2005 to 2017, diesel particulate matter has decreased by 88%; nitrogen oxide has decreased by 56%; sulfur oxide decreased by 97%; and greenhouse gas by 18%. In terms of targets, there is a goal to reduce greenhouse gasses by 40% in 2030 and 80% in 2050. Certainly, California leads the way when it comes to green and sustainability.

Logistics is around 7.7% of GDP or $965 billion. It has increased around 20% since 2006 yet decreased as a percentage of GDP by 30%. In comparison to other countries, we are far lower with Japan the closest around 11% and China the furthest around 18%. E-commerce is increasing around 15% per year, and it carries high supply chain costs around 25-30% of e-commerce sales.

All modes of transportation were up (airfreight, rail, trucking)! With that said, trucking is 76% of transportation spend and is the 100 pound gorilla. Rates have been on the rise, capacity is tight and shippers have to be more proactive. There are lots of technologies being explored but no near-term, viable solutions to resolve the issues. Again, similar to the ports, there are countless conversations about sustainability.

What Should We Consider and/or What Impacts Could Arise?

Global logistics is relevant to GDP and to every business that produces, distributes and sells products. Whether an aerospace manufacturer with multiple outside service steps all requiring transportation or Walmart, requiring a supply chain sourced both locally and from afar as well as grocery delivery on the customer side, without logistics, business will cease.

In today’s Amazon-impacted marketplace where quick turnaround, short lead times and frequent order changes are the norm, re-thinking your manufacturing and extended supply chain footprint is becoming a necessity. Whether re-evaluating make vs. buy decisions, re-configuring sales channel structures or revising inventory fulfillment practices, logistics is one component that can no longer be an afterthought.  

In our view, those clients with a resilient supply chain will thrive in this new normal business environment.

To learn more about how to create a resilient supply chain to navigate disruption and achieve peak performance, check out our new series or contact us for customized expertise.



Lessons Learned from a Genius Businessman

February 23rd, 2016
businessman

Harry used uncommon common sense to spot opportunities to turn around companies. His wisdom, integrity and generosity will be missed.

My best friend’s dad was as close to a business genius as I’ve stood. He made his employers rich beyond their wildest dreams yet he was happy with this outcome as he enjoyed what he did and lived to 98 including many travels to exotic places — not the ones you might think of but ones he enjoyed. For example, he went to Nicaragua and had many wonderful stories to tell about crocodile farms and uzis. Somehow, he and his wife managed to trust people they probably shouldn’t have, travel to a country not recommended, even by people they met along the way in the country, and come out of it in one piece — and with great stories and excitement.

In his work life, he spent many, many years working for the owner of Sealand, functioning as an investment banker and turnaround CEO. Thus, he’d source great deals and then if they weren’t living up to the expected value, he went in and had a 100% success ratio in ensuring they did. What else can you ask for??!! He could turn around transportation companies to banana growers. Uncommon common sense applies to more than you’d think! One day, I asked him what he thought was most important in turning around these companies, and here are some of the key points that pop to mind:

  1. Observe – Interesting that one of his top points is common sense (oh, wait, I actually think they all were uncommon common sense). He said it was amazing how much he saw in walking a facility that showed opportunities. It reminded me of what has become known as Lean — turns out it doesn’t have to be part of some fancy program; just observe and you’ll uncover gems.
  2. Watch the money – This next tip is unfortunately more common than it seems it should be. Too many companies have someone committing fraud or “on the take”. I certainly would never recommend implementing the cumbersome Sarbanes Oxley if not required by law; however, I would recommend implementing some uncommon common sense approaches to making sure you have the right checks and balances in place. I did a webinar for Financial Times’ ExecSense on this topic a while back, and it is scary how common this can be. My research found that a typical company loses 5% of annual revenue to fraudulent acts. Hard to believe!
  3. Deal with sacred cows – Again, do we really have to be a genius to realize this is a good idea? He said that there are obvious examples of this in family-owned businesses. Perhaps a son or daughter is creating havoc and wasting money but remains in position. Worse than the waste of money, it demotivates the rest of the team. Another example of a sacred cow is a ‘big’ customer we try desperately to keep even though money flies out the door at a faster rate than it flows in the door when this customer calls. There are countless examples. The key is to observe, find the sacred cows and be willing to address them head on.
  4. Persistence I’ve titled what he described as persistence. One of his doozy assignments was to go to Vietnam during the war and turn around a facility (this sounds quite appealing, doesn’t it?). He was the MacGyver of the business world. Leverage underutilized assets. Find new solutions for old problems. Treat people fairly. Don’t give up. He managed to turn the place around — of course.
  5. Integrity – I’m reminded of this quality since he spoke of it near the end. He felt that it was of critical importance. He isn’t alone. When I performed a survey of executives, it came out as a top quality for success.

Harry was a guru and knew more about almost any topic at 98 vs. anyone I know. He’ll be missed. We will help ensure your wisdom carries on!    

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