Leveraging “logical logistics”

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My belief is that implementing technology for technology’s sake is a fool’s game in this business. What are critical are the people and processes within the supply chain.” –Michael Stolarczyk, president of Kontane Logistics and author of "Logical Logistics: A Common Sense Primer for Your Supply Chain"

Had an interesting conversation with Michael Stolarczyk this week – president of Kontane Logistics and author of the newly published Logical Logistics: A Common Sense Primer for Your Supply Chain. (Which is, of course, available for purchase via Amazon.com)

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Stolarczyk’s been around the supply chain business for a while – 25 years to be exact – including 17 years with A.P. Moller/Maersk Group in the U.S., Hong Kong and Prague (the capital of the Czech Republic), along with four years with Exel Logistics at its North American headquarters, before taking the reins at Charleston, SC-based Kontane back in 2009.

What’s neat about Stolarczyk is that he’ll the first to tell you that his book isn’t packed with special insights that only he’s been able to decipher that can unlock the secrets of successful supply chain management. Furthermore, his book isn’t all that long, with half of it serving as a dictionary of logistics terms and acronyms (or, if you like, a “Logistics to English” pocket translation guide).

Rather, Stolarczyk is a big believer that every company’s supply chain is different and thus requires a different combination of people, processes and technology to successfully manage.

Furthermore, there’s no single “right way” to create and operate a supply chain today: in fact, he partly hopes people reading his book argue with his premises, if in the end such “arguments” lead to more efficient supply chain systems for their firms.

“I’m also a big believer in the benefits of true collaboration,” Stolarczyk told me. “I tell people, ‘you don’t have to be the smartest person in the room to develop the most efficient supply chain.’ I mean, for me personally, if I am the smartest person in the room, we’re in big trouble.”

What he means by that is it’s more about getting the right mix of people – such as software engineers, financial analysts, distribution center operators, dock supervisors, and yes even truckers – together on equal footing so a more complete picture of the supply can emerge and thus be improved.

[Here are some other thoughts about the supply chain challenges ahead in the future. Note, too, that when it was filmed in 2008, oil prices were at all-time highs – and today we’re experiencing the same scenario again.]

“The ‘real world’ needs to meet with the supply chain strategy,” Stolarczyk explained. “A process may look good on a spread sheet, but it doesn’t always work in reality. That’s when a warehouse supervisor says, ‘You can’t pick and move a pallet from one side of the building to the other in the time window you’ve got there.’”

So as such “time windows” build upon other windows to form the complete supply chain, if that one piece doesn’t work the whole chain won’t function properly.

That’s why, to be successful in supply chain management, empathy and collaboration needs to ride on the same vessel toward the mutual destination of profitability. “Collaborating creates value, and executive empathy makes money for both,” Stolarczyk explained in his book.

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“To a certain degree, almost everything in business has become data-driven. It’s common practice today that if you can’t measure it, it doesn’t impact the bottom line. But while pure data can provide valuable insight, it doesn’t tell a complete story,” he said. “The news is filled with businesses that have used numbers — real or manufactured — to justify prices and volumes that are no longer with us.”

From his perspective, he’s noticed some cracks in this data-driven, numbers-only foundation on which the supply chain industry as a whole used to build and expand profits.

“We are moving into the ‘conceptual age’ of business, where the right price is not necessarily the lowest price. It’s no longer enough to be a great numbers person. We now expect more of our leaders, and empathy and collaboration are among those qualities,” he pointed out.

Understanding the feelings of others is good behavior, but empathy particularly pays off when organizations — that is, the executives who represent companies — understand what their customers and partners are feeling during the decision-making process, Stolarczyk noted.

“How does empathy and collaboration impact the success of organizations during negotiations? The strongest point to be made is that both qualities involve focusing less on purely statistical internal issues, and more on a collective way to gain mutual benefit,” he said. “The opposite of collaborative behavior is internally competitive, command-and-control behavior. This is a form of corporate self-absorption that remains from the Enron days of blind selfishness.”

In the end, Stolarcyzk hopes his book will help folks in major organizations and Fortune 500 companies understand that supply-chain and logistics decisions can be made in a more common sense, collaborative way, ensuring efficiency and profitability for all involved.

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“This means an open dialogue with stakeholders, both internal and external to their company,” he explained. “It’s about de-mystifying this thing we call logistics by getting people to share data and ideas to make long-term sustainable change to supply chains.”

For example, everyone wants to ship everything as fast as possible. But upon reflection, delivering everything at warp speed to the same logistics creates bottlenecks in cargo lanes and at warehouses – leading to the very expensive delays companies were trying to avoid in the first place.

Another thought: why not consider outsourcing to places like Kentucky, Alabama and Ohio, instead of Asia?

“Why is it that when we think ‘outsourcing’ we immediately think ‘overseas’?” Stolarcyzk asks. “If we collaborate and share data, maybe we discover paying a few more dollars for labor and facilities in Kentucky actually save time, fuel, and other costs when compared to a supply chain stretched halfway across the world.”

It’s one possible solution that can be discovered if firms view logistics strategy through a more collaborative and logical lens going forward, he believes – and I for one think he’s on to something here.

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