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Outsourced Logistics 200812

Outsourced Logistics 200812

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Published by kamarani

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Published by: kamarani on Sep 19, 2011
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Troy Hammond
Retail Branch Manager Agility, Seattle 
The next-genvideo game revolution of 2006 sent product demand to an all-time highand put trusted retailer, Toys“R”Us, to the ultimate test. The number of newsystems Agility’s Troy Hammond was handling broke records for Agility’s13-year-old Direct-to-Store program. To secure the necessary courier lift,trucking support, and temporary labor for the fast-moving products, Troy’steam managed a multiple-carrier program. By systematically processingallocations on a store-by-store basis, Troy kept Toys“R”Us shelves stockedand gamers stoked.
here’s a phrase making the rounds in conferencepresentations and the media which logistics profes-sionals need to ban from their vocabulary. We musthelp the general business public understand “reverse glo-balization” is a faulty concept or, at least, a misnomer.If you must persist, you might substitute commercialagoraphobia (a little redundant since agoraphobia literallytranslates to fear of the marketplace). Or, try isolationismor protectionist.Or, just scrap the economic theories of the last 232years. That’s when Adam Smith described the supplychain. Smith’s global view was primarily geared to com-modities that were not available locally and thus had to betransported great distances.He described, in “An Inquiry Into the Nature andCauses of the Wealth of Na-tions,” the role of thesupply chain in pro-ducing the woolencoat on the backof a commonday laborer asextending fromthe shepherdto the sorter of the wool, thewool comber orcarder, dyer,scrib-bler,spinner, weaver, fuller and dresser. Then he noted a num-ber of merchants and carriers are involved in the transportof the goods between these functions. He posed the ques-tion, how much commerce and navigation and, by exten-sion, ship builders, sailors, sail makers and rope makerswere involved in bringing the materials to the dyer so hecould complete his job? What about the tools and com-modities used by the others?Smith described what we have retitled “lean manufac-turing.” In large-scale production, Smith saw a division of labor necessary to complete the tasks that could not feasi-bly or economically be done by a single worker or a singleset of skills or tools. “In those great manufactures . . . whichare destined to supply the great wants of the great body of the people, every different branch of the work employs sogreat a number of workmen, that it is impossible to collectthem all into the same workhouse.”His view of mass production describes multiple work-shops and implies outsourcing—but a more narrow formthan today’s standard because the economics of producingmanufactured goods did not support separating thosedifferent production and assembly steps by any great dis-tance.Smith recognized a number of supply chains cometogether in the production of even a simple product like awoolen coat. He described a division of labor which, withfast, efficient and inexpensive transport does not requireevery task to be performed locally. He also knew that thetotal landed cost would determine the nature and struc-ture of those various supply chains.This difficult economy certainly requires a reexamina-tion of how we produce and distribute goods and it willlead to reengineering supply chains.But as we go throughthose network optimization exercises to bring sourcecloser to production or production closer to market, call itthat: supply chain reengineering, network optimization oreven near sourcing. But don’t call it reverse globalizationunless you want to go back to the hunter-gatherer days of our distant ancestors.
Reverse Thinking
Perry A. Trunick
, chief editor,perry.trunick@penton.com
December 2008
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