Mistaking a Cog for the Whole Machine

By: Clint McCrystal

Supply Chain Management http://postersandprints.wordpress.com

As an individual that works for a lean 3PL company, I have gotten completely numb to the common response from those that hear that I work in logistics and say, “Oh, do you work for UPS”? Kudos for UPS’ branding team, but the word “logistics” doesn’t mean “UPS”. Anyone in the business/industry sector would be less likely to fall victim to this common confusion.

However, there are people surprisingly close to the work that have that same terminology recognition problem with the terms “logistics” and “supply chain management.” In the book Supply Chain Management: Processes, Partnerships, Performance author Douglas M. Lambert, articulates this very truth on his first page: “In fact, many people using the name supply chain management treat it as a synonym for logistics…” In reality, this confusion demonstrates an outdated view that still puts logistics in a box (or perhaps a shipping container) as a silo’d activity meant to get material transported in or out of the plant.

The more progressive view places logistics as a key function within the supply chain management process. The supply chain acts as an interconnected system of components that serves a company from material sourcing through customer delivery. In our company, we are translating this start-to-finish view into the supply chain concept of an “end-to-end” strategy and embracing the modern supply chain with a new term: the fulfillment stream. Robert Martichenko and Kevin Von Grabe articulate this term in the 2010 book Building a Lean Fulfillment Stream; “To capture the lean concept of smooth flow, we find it helpful to envision a steadily advancing stream of materials and the firms and facilities involved as tributaries joining their efforts to serve the customer.”

It is not uncommon for a system to be misidentified as one of its chief components. For instance, there are folks out there that would likely equate the stomach with the digestive system. Yes, the process of eating is a major component in play during digestion but it is not the whole process. If any well-respected digestive track specialists focused their inspections only upon the stomach, it would be very possible that some illnesses/conditions/maladies could be misdiagnosed or not well understood. Anyone that has digestive issues could see how this short-sightedness in the medical field would be pretty hard to swallow.

Embracing this systems-oriented view of the relationship between logistics and supply chain management is easier when looked at through the lens of lean. Lean thinking promotes the breaking down of the traditional functional silos and parlays its principles of pull, flow and the total cost of fulfillment into a model that cannot deny the interconnectedness. Logistics shifts its role from a stand-alone point of corporate cost control to being one of the several variables that contribute to the optimization of fulfillment stream equation.

Lean Logistics allows us to make decisions regarding replenishment frequencies, right-sizing, just-in-time and level flow that work in concert with the inventory, sourcing and warehousing strategies of our customers. Rather than being just a single song, logistics becomes a melodic movement in the symphony in the lean fulfillment stream, articulating a full story rather than only a single fleeting thought.

Therefore, when a colleague introduces themselves as a logistics professional, let’s imagine them as a cog in the machine that is supply chain management. It is very difficult to provide a lean environment that fosters continuous improvement and waste reduction without this “supply chain as a system” view. There are too many flow points that rely on the interactions between these different cogs to put on the “logistics” blinders. Hopefully, as our industry moves forward and we continue to embrace the fulfillment stream view, the terminology misnomers will improve and we can all speak the same lean language. Until then, the nuance of the industry may still seem lost in translation.

Posted by LeanCor Supply Chain Group

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LeanCor Supply Chain Group is a trusted supply chain partner that specializes in lean principles to deliver operational improvement. LeanCor’s three integrated divisions – LeanCor Training and Education, LeanCor Consulting, and LeanCor Logistics – help organizations eliminate waste, drive down costs, and build a culture of continuous improvement.

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