How to transform technology into an ally – MODERN LOGISTICS

Fernando Lopes, CEO Abacus Consultants

27 October 2015

In a world working increasingly with new technologies, the faster the change, the technology should be regarded as . ally and not as an adversary

What will I write applies to various business sectors: industry, retail, services in general. It applies to people but especially to businesses. Applies in Portugal because we are already lagging behind Europe, Japan, India and the United States. Applies internal processes but also, and above all, the processes that connect customers, suppliers and other partners.

But if there is a sector in which it applies in a structural way, is the logistics management industry . Because it is one sector in which it is easier to transform technology and information into concrete results, numbers that lower costs dramatically increase the speed and quality of information generated and help increase business competitiveness.
When it comes to competitiveness, frightens us because it reminds us the buzzword often quoted by politicians who usually make only an idea of ​​what they are talking about. It is fashionable and their advisers so instruct them.
I write here about the true meaning of “competitiveness”. To a Portuguese company of the Transport and Logistics Management sector, for example, it means “survival.” And after surviving the next step is to grow and eventually dominate.
But how does a Portuguese company in this sector is in a state of enormous difficulties to a dominant position? The answer is not written in a few lines and there are no immediate answers, but we can discuss some variables that are fundamental.
First, each company that wants to go through this process has to be known accurately and deeply, and make a introspection of what is and where it is, and what it wants to be and where you want to reach. Can again use buzzwords to define: SWOT, design thinking, analysis AS-IS and TO-BE, you name it. You can choose to do so internally or with the support of an external consultant. May want to just involve the Directors or all members of the company. Read a book by a management guru or try to find new ways. There are no magic formulas or unique processes.
But it has to be done. And part of the “Know thyself” has to be sustained in the real and effective numbers of current business. Read “rigorous information systems”.
Second, the company needs to define, to get where you want the paths to get there. Like when we established a route, there are several alternative ways: will the highway, saving time but increasing the cost of tolls, or rather go by national roads? And just remember the following: 10 years ago this decision was made looking at the map. Today, we view the GPS. An information system is like a GPS, as a source, a map and a destination, suggests a route. It may not be the best because our expectations or priorities are different, but the suggested route has enormous merit, is concise, reliable, safe. Unless you use a GPS for 5 years. Modernize your GPS! Therefore modernize their systems.
Third, the business needs of the organization. For organizational read “Processes”. A company can only be reliable, then conceivably be consistently profitable, have quality (good products and good services) consistently, when there are processes. No need to complicate too much, the process can be a checklist to go when it makes a proposal or a visual check when making a discharge of a consignment. But there needs to be, so that consistency is a key word in your new company. Nothing better to put a company to operate on processes rather than impose (and even that word is “imposing”) an information system that requires the whole company to work according to the processes that the company defines. And attention, the process must be criticized and regularly adjusted. But they must exist.
Room, Planning and Controlling. That serves everything else is not set goals (five-year, annual, quarterly, monthly, daily, no matter!), And if not check if these goals are achieved. We should be partially satisfied when we set goals that failed. It means that we define and that we measure and we were ambitious enough to set difficult goals to reach (or else incompetent to achieve them). But either way, know it. We measure. We can rethink. We can try to understand where we fail, correct. Even if it fails again. But as we set goals and measure? Please do not talk to me about Excel. Excel is the easiest way to create chaos because we think we are tracking the events and it really does not. Once again a concise information system is needed.
One of the great mistakes of Portuguese managers, especially the second and third generation, is to believe that the repetition of the same processes and ways of working will succeed forever. And it’s the easiest mistake to make. What may have been a great deal in the past with huge margins, allowing tremendous growth and disguising errors and inefficiencies, will surely leave one day of work. We all know that companies have ways to work unbelievably bad and we wonder “how this company has profits of these and this success in the market?”. This one day will end, and the company has no way to measure it, will not even notice what happened to him. Suddenly goes through a “bad cycle” begins to fall into the trap of bank financing and others (poor vendors also will not realize what happened to them, then that company has always been as solid and as good payer, people so serious …) and suddenly has a PER. A victorious cycle 20, 40 or 60 years ends ingloriously.
Realizing, whatever the way decides to organize your business, whatever your strategy, whatever its economic strength and the strength of its brand, can not be consistently good if you do not (I) deep knowledge of their business, (II) defined strategy, even if it is wrong, (III) and processes (IV) Planning and Control.
As consultant information system, I believe, of course, that companies base their business on best practices supported in better information systems (Sections I, III and IV) and who have the right strategy (Section II), they can achieve I wrote the first paragraphs. And I repeat: in logistics management sector, whether the providers (shipping companies, logistics operation) as manufacturers, wholesalers or retailers (generally, companies that need to know when to buy to store and find the right balance between storage costs and the cost of losing customers by failing to stocks), the return of every Euro invested in information systems have an immediate return, tangible and measurable. It is not a cost but an investment equivalent to the best equipment and best people available. An investment with a return, with meaning, scalable and multipliable.
In addition to reading and focused when it comes to buying and storage-transportation-sales logistics industry, I recommend the study which you can download on the link “Trends and Strategies in Logistics and Supply Chain Management “. Good reading!