It is still not unusual to hear a senior manager ask, ‘What is Logistics?’ Along with the emergence of logistics as a discipline in its own right has come a plethora of acronyms and theories describing how to be successful at logistics management.
Logistics management is an all-embracing approach to managing a major part of most organisations’ business. This holistic view often challenges territories formally viewed as being the sole province of more traditional functional management roles.
Some believe logistics to be simply about transporting goods. Others recognise that warehousing and storage is all part of logistics. A few understand that inventory management is of interest to logisticians. Essentially, logistics is about the management of cross-functional flows within a business.
It may be helpful at this stage to establish what Logistics Management is not.
It is not managing:
- Trucking operations
- Inventory levels
- Procurement activities
- Company finances
- Information technology
- Production planning
- Customer services.
But it is a little bit of all of the above. However in a pure sense a Logistics Manager will help plan the activities of these functions without actually managing them directly, this is the job of the functional managers in each of these areas.
The Chartered Institute of Logistics and Transport (UK) defines Logistics Management as:
“The time related positioning of resources.”
True logistics management is a cross-functional role, concerned with meeting the organisations’ strategic and operational objectives. In addition to swiftly turning invested cash into more cash as profits, most company’s objectives will relate to delivering the customer service promise.
The logistics customer service promise
This is simply defined as the goods or services supplied to the client at the correct time, complete, without damage, and at the agreed price.
The Logistics Director is responsible for both the planning and execution of the customer service promise but it will be the expertise of other functional managers that will actually make it happen. The logistics director will not tell the production manager how to make a product but he will tell him how many to make and when.
What is a logistics management role?
As a person he or she will need to be an experienced, business-minded individual with the imagination to create a new future. In many ways the role will be similar to a finance director’s role, with a strong focus on the reduction of working capital, cost control, statistical analysis, heavy reliance on ICT and meeting the company’s objectives.
Responsibilities will be cross-functional in pursuit of delivering the customer service promise. It is both logical and likely that the logistics director will have certain departments report to him such as transport, warehouse, inventory, planning and procurement.
What are the essential skills, knowledge and experience?
- Knowledge of accounting practices
- Understanding of statistics
- Familiarity with different modes of transport, their complexities and when to use each
- International shipping, including customs and legal issues
- How to reduce working capital
- How to reduce lead time to fulfillment
- Cost control
- Trade-off analysis skills (must be a senior position, if one function is forced to spend more and another to spend less but to the overall advantage of the company)
- Understanding of ICT and its uses
- Understanding of physical logistics: material handling equipment, automated handling, transport containers, trucks and warehouses
- Must be a good team player with excellent influencing skills at all levels within the organisation and those outside the organisation
- Cultural and religious awareness is essential and an ability to speak other languages is useful especially when operating in a global market place
- How to optimise inventory management: its positioning, avoiding obsolescence and excessive inventory-carrying costs
- Managing procurement activities
- Keeping abreast of social, legal, economic, political and technological factors.
In short, managing cross functional flows in:
Logistics management working environments
Many companies employ logistics management skills and techniques whilst not necessarily calling it by that name. The function covers more than distribution – it has responsibility for the management of the whole supply chain: a complex network that links together raw material suppliers, manufacturers, transport providers (e.g., sea, air, road and rail), retailers and, increasingly, the end consumer.
Supply chains and logistics skills are not the sole province of the commercial world. The acquisition and movement of food, medical, and infrastructure supplies into areas affected by war or natural disaster – 2011 has seen a number of natural disasters including the earthquakes in New Zealand and Japan and more recently the famine in Africa – cannot be achieved without the management and planning capabilities which are part of every logistician’s skills portfolio.
The importance of the logistics management role
In a fierce global competitive environment it is no longer possible for companies to be either a cost leader or a service leader. They must be both. Any logistics director will be heavily involved in the delivery of cost and service leadership.
Nine ingredients for success in logistics management
- Higher business related qualification such as a masters degree.
- A working knowledge of accounting practice and statistics will always be useful.
- The English language is by no means universal; therefore, being able to communicate in another language is extremely useful and in some cases essential.
- Experience in the functional activities encompassed by logistics management will be of great benefit as your career develops. It is important to seek roles that will enhance your effectiveness later.
- Changing roles every three to five years is seen as positive by many potential employers. Attempt to build a portfolio of skills and experience that will prepare you for the top job and make you an attractive candidate.
- Make a point of attending any training that is offered to you as you progress and keep a record of courses attended.
- If possible accept international assignments or postings as such experience demands attention. However it is true that individuals stationed in the company’s headquarters have a better chance of getting the top management jobs so don’t stay away too long!
- Seek to establish a successful track record that may be expressed in clear verifiable terms such successful projects or cost control exercises. Accept the tough assignment as, win or lose, you will gain respect and be noticed because you put yourself forward and tried. However don’t allow yourself to get bogged down as the crisis expert because you may find that you are stuck in this role.
- Continue to learn and grow and eventually you will achieve your goal. If you are very good it may just find you.
To understand further the routes into the logistics industry, why not have a read of our Routes into Logistics & Transport article.
A career in logistics management can be very rewarding in both salary and job satisfaction terms. That is not to say that it is in any way an easy option. There will be stressful and frustrating times as well as failures.
Yes, I said failures. The most successful people have failed many times in their careers. What sets them apart is the way that they learn from their failures and even turn them to their advantage.