Logistics still so misunderstood

August 16, 2013

New Survey Shows: Logistics Costs are Still So Poorly Understood:

Logistics is a crucial component of any business in bringing a product to market. It’s the function within the Supply Chain that deals with paying for freight, transportation of goods, and getting goods across borders, with the goal of meeting customer demand in a timely and cost-efficient fashion. Poor handled logistics can end up racking up huge costs for companies. For example, say a media event, celebrity endorsement or marketing push has increased demand for ones product overnight – and one orders more product from overseas, but it gets held up in customs for too long. All of a sudden you don’t have supply to meet the demand, and that leads to upset customers, bad word of mouth, and extra inventory. Logistics experts make it their business to avoid these costly and embarrassing situations.

This week comes an interesting blog post from the UK publication Supply Management that details a recent think tank survey of logistics costs. The survey, titled “2013 Trends and Strategies in Logistics and Supply Chain Management,” was tabulated from interviews with 1757 Supply Chain executives from around the world. According to the survey, 14 per cent of respondents said their companies were not capable of estimating estimate logistics costs. That’s a troubling statistic if you start to think about it, especially because the survey also outlined that logistics costs represents a big chunk of overall costs for companies that were able to estimate them.

In the Electronics industry, logistics costs were estimated at 4 per cent of revenue.

In the Automotive sector, they were estimated at 6 per cent of revenue.

And in the Manufacturing sector, they were estimated to be 8 per cent of revenue.

Clearly, logistics represent a large cost factor in any organization. For the 14% of companies who aren’t able to estimate their logistics costs, it’s possible that these costs could even be higher. That’s why logistics experts are in such high demand, and why more and more companies are upgrading their talent in these areas as well as outsourcing their activities to 3rd Party Logistics companies. Logistics experts with strong analytical and quantitative skills can help organizations form a better picture about their logistics costs, with reduction as an end goal.

But the respondents of the survey also identified something we’ve been talking about on this blog and elsewhere for quite a while: talent is in extremely high demand and short supply across Supply Chain functions and this of course includes Logistics. From the report: “Every one of the executives we spoke with mentioned the lack of talent as a critical barrier to driving logistics progress and improvement.”

Every one of 1757 executives? That’s huge. And that’s where we come in: Argentus has a broad network of passive candidates in Logistics and Supply Chain that our competitors don’t have access to – why? Because this is all we do in this narrow vertical every day. And if you’re one of those organizations that are finding it hard to access Logistics talent, we’d love to be of service.  We know our stuff and can give you a fantastic recruiting experience

Reach out to me today at bhann@argentus.com or call me at 416-364-9919

Alternatively, you might also want to connect with me on LinkedIn, Twitter or Google+

My electronic business card is bronwenhann.com – bookmark it, please

Over and Out for now



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