I was reading the article “The Threat of Global Gridlock”
about the challenges of transportation in a supply chain, one word kept
lingering inside my head: logistics. Probably because it reminded me of a series
of TV ads by United Parcel Service Inc., or better known as UPS.
I think I started
seeing these ads quite frequently sometime around last year. The company was launching a global ad campaign to promote its expanding logistics business to small and medium-sized businesses that wanted to sell their products globally. They cleverly
modified the lyrics of “That’s Amore”, a classic Dean Martin tune, and changed
it to “That’s Logistics”.
I’m pretty sure most of you have seen the ad before,
but just in case you want to see it again (or never seen it before), just have
a look and enjoy the jingle:
(UPS: We ♥ Logistics Commercial via youtube.com)
In an interview with Ogilvy & Mather Worldwide, Scott Davis, UPS chairman and CEO, said that “People often think of
logistics simply as moving goods to the right place at the right time”. That’s
exactly how I thought of it.
However, after I finished reading the article, it totally
changed my point of view. Scott Davis added that “Logistics can be a powerful
tool to help businesses get products to market first, gain operational
efficiency, save money and improve customer loyalty. Especially in
today’s economy, companies need an edge and UPS’s mastery of logistics can give
it to them.”
For small businesses, going global might sound like a tough
order. But thanks to third party logistics companies, it opened up the
opportunity for small companies to reach out to the global market. Senior transportation analyst at BB&T Capital Markets,
Kevin Sterling said that “Third-party logistics is a growing area at a time of
globalization and cost-cutting of in-house supply-chain operations”. He added "If you're a small business, would you know
how to ship from China to the U.S., or are you going to hire a team to manage
your supply chain?”
However, the recent global recession, the rise of oil
prices, transportation congestion, have disrupted the transportation network
infrastructure worldwide.
It’s also a significant problem in my home country, Indonesia. In terms of logistics, Indonesia is falling behind its
fellow ASEAN countries Singapore, Malaysia, Thailand, Philippines, and Vietnam.
According to the 2010 Logistics Performance Index (LPI) released by The World
Bank, Indonesia is ranked at 75th out of 150 countries surveyed, the
second lowest in the ASEAN region (above Cambodia).
 |
| 2010 Logistics Performance Index (LPI) ranking - via worldbank.org |
Recently, the Indonesian government stated that they are focusing on resolving three major problems that are impeding the country’s economic development. The government have identified that the three major problems are high costs in logistics, dependency on imported raw material for industries, and the issue of labor productivity and waging systems.
Hopefully my government back home will soon find a way to
resolve these issues, and in terms of logistics, follow some of the
best practices that are mentioned in the article.
Sources:
- Stalk Jr., George. “The Threat of Global Gridlock”. Harvard Business Review. July 1, 2009. Prod.#: R0907T-PDF-ENG.
- http://online.wsj.com/article/SB10001424052748704621204575487840032479922.html?mod=WSJ_hpp_LEFTWhatsNewsCollection
- http://www.youtube.com/watch?v=mRAHa_Po0Kg
- http://www.ogilvy.com/News/Press-Releases/September-2010-New-UPS-Campaign.aspx
- http://www1.worldbank.org/PREM/LPI/tradesurvey/mode1b.asp#ranking
- http://www.bisnis.com/articles/hambatan-industri-hatta-janji-tuntaskan-tiga-masalah-utama
In the Philippines, I could suggest with partnering logistics company that offers more than forwarding freight but catering your warehouse needs as well. Metro Combined. A flexible company that does not only gives you what you expect but exceeds your expectations is quite the catch to grab.
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