I’ve written about the need for logistics (here’s but one example) in all sorts of firms before. And, perusing the pages of a new book by Edward Humes (Door to Door), I was reminded how, given the internet, procurement of raw materials and  sales of products and services really crosses many boundaries.

I’ve used as an example my medical device firm, Bicarbolyte, when I discussed logistics. This firm had multiple issues- from cash flow (which gets strained when sales increase by more than 50% a year), to obtaining chemicals, having bottles delivered, label printing and delivery, as well as satisfying our customers who demanded just-in-time delivery of our products.

Which meant that we needed to allocate our funds for payroll and rent, with the leftover funds to purchase bottles, chemicals, and to pay expenses for our truck drivers. The cash set our delivery patterns, too. Because we used truckloads of salt (sodium chloride), sodium bicarbonate, and sugar (dextrose), these products all entailed big outlays of cash.   And,we needed our trufcks empty (after delivering products to customers) to pick up the chemicals and hightail it back to our plants.  Plus, our sugar came from France, which involved a longer lead time and more complex pick-up requirements.

All those needs were factored in when we were delivering in New York (where we also picked up salt), New Jersey (bicarb and acetic acid- the latter required specially qualified truck drivers), Maryland (to pick up dextrose [sugar] from the Baltimore docks). And, we transported some product and raw materials to our other locations in Kansas City, Milwaukee, Dallas, and Long Beach. And, sometimes our bottle vendor had a glitch in production- or its delivery. So, sometimes we had full crews ready to produce our wares, but no bottles to put them in. (We occasionally diverted the manufacture to our drum units, instead of waiting for the 1 gallon bottles to be delivered.)

When we shipped our product overseas, we had to rely on the schedules of the big shipping firms. Getting product to France and Taiwan involved 4 to 6 week lead times. And, if our customers underestimated their needs and wanted a rush order, that meant we had to have at least 1/2 a container (approximately 2000 gallons of finished product) on hand to get a delivery out quickly for them.

As you can see, a snow storm, a heavy rain, a typhoon, or a major accident could render our deliveries to our customers late. And, the delivery of raw materials to our production facility just as late- if not later. So, we were in constant contact with our drivers.

But, logistics affects most other companies. The wine distributor needs to have enough wine on hand to handle the orders coming in. And, ordering wine in pallet-loads (rather than container or truck-loads) involves higher costs for the wine and much larger costs formdelivery (since there are surcharges for less than truckload orders from the vendors and freight discounts are greatest for full truckloads). Which also requires more warehouse space to hold all the deliveries.

Or, for home builders and remodelers. Waiting for wood or assembled framing or contractors. Because each part of the construction relies on the completion of other portions of the job.

Maybe it’s time we train our college graduates to become experts in logistics.

(Don’t tell me these programs exist at the bachelor’s levels.  Because the bulk of those programs only exist at those for-profit colleges- that have failed to provide the education process promised.)

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