Dupré Logistics

You’re Only As Good As Your Weakest Link

Monday, October 10, 2011

In earlier times, CEOs didn’t have to put too much time into thinking about logistics, beyond assuring that costs were kept in line. Times have changed, however. Logistics has become a major element in creating value in the marketplace.

If you’re a manufacturing business, you make large investments in the manufacturing complex. If you’re a service business, you make large investments in people and IT. A CEO has to focus on the critical elements that will represent the company’s value proposition to clients.

In the past, an element like trucking or logistics didn’t need to be studied because it was not a weak link. There was available capacity and plenty of companies around to provide the service.

Today, for many companies, trucking and logistics is becoming a weaker and weaker link. Let’s say you make a major investment in Louisiana and your product’s going to be distributed in North America. You’ve built the finest plant available, used the finest technology, had the best process, gotten the raw materials to your plant and developed the finest product. But…the product can’t get from your plant to your customer in Portland, Oregon on time. This is a weak link where supply chain, logistics and, in particular, trucking needs to be examined on the executive level. Remember, you are only as good as your weakest link, so make sure that logistics is not that weakest link.

Safety Comes First

Monday, October 03, 2011

New CSA (Controlled Substances Act) regulations put a premium on safety. Trucking companies will be held accountable for their actions and performance. As we progress, shippers will be accountable for their selection processes as to who they select and why they selected them.

The decision making that shippers will need in the near future will require greater consideration of the safety component in the assessment of why they use certain providers. This might change the dynamics of this business, which has typically been based on a transactions where the lowest cost bidder wins. Safety records will become a much bigger part of this decision making. There will be a tool in the CSA scores that can be used as a resource for shippers to be held accountable.

At Dupre', our mission statement is “Safe service is profitable” and “safe” is there for a reason. If we can’t be safe, we hit the red button and stop the assembly line. We don’t move without knowing safety exists. Good companies promise safety first and then excellent service. If both of these requirements exist, there is an opportunity for profit. Safety should be an inherent value that is a quality enhancer in a company. This value must be reinforced by ownership, senior management, executive leadership, local management and the drivers – throughout the entire company.

Dupre' Executive Wins Major Safety Award

Monday, September 26, 2011
We've written (and will be writing) quite a bit about the importance of safety in every trucking operation and the impact that safety has on controlling total costs for both trucking companies and shippers. Dupre's commitment to safety is unrivaled, enabling us to provide superior performance to our customers and employees. On Thursday, September 23, the American Trucking Association (AT ..

What’s the Difference Between Good and Great Supply Chain?

Thursday, September 15, 2011

In today’s competitive world, good is no longer good enough.

Companies must pursue “great” in all aspects of their business, and in logistics “great” is critical.So how you do go from “good to great?”

Let’s define good first. A good company has metrics and visibility across its entire supply chain. Let’s say I produce chemicals. On the inbound side, I should know the cost of purchase of my raw materials, the cost of transportation, perhaps some risk element around how secure my source is, how secure my transportation line is or how vulnerable it is. I should know how long those raw goods are in my supply chain.

On the outbound side, it’s essentially the same. What is my cost of delivery to a customer, the transportation time, and am I managing shortages and outages? In a good supply chain, there is somebody who can measure those pieces on the inbound and outbound sides. The movement of these goods is completely visible and I understand my costs.

Great supply chain goes further.

It is constantly looking at the supply chain from the perspective of five years from now, and asking what would be different and where do I need to be? It’s a continuous improvement drive to an evolutionary growth path. I have to ask myself how I can make this better and better and better from where I am today.

The second thing that a great supply chain does is to examine it from a revolutionary perspective and ask how we can acquire entirely new business. What are the strategic things that the corporation is looking at? How would this new acquisition affect my supply chain?

An excellent example is what typically happens when a company acquires another business that has its own supply chain distribution centers, loading points, warehouses, etc. The worst thing that the supply chain team can do is to let the two operate separately and lose the opportunity to consolidate their systems. We’ve seen companies that were a series of acquisitions with one parent company, and each division operating separately. Each has its own warehouse in the same city and each has its own distribution points. They covered the United States but none of the operational facilities in the local metros were co-located except one. Great supply chain would merge those facilities to gain the benefits of consolidation.

Great supply chain watches what is happening in the world. What technologies are available that are changing the business? How do I employ those technologies in my supply chain to get myself both a cost reduction and also a strategic advantage?

Companies that ask these questions and pursue their answers experience greater efficiencies, higher margins and a meaningful competitive advantage.

Logistics Management and Chess

Thursday, September 08, 2011

We’re often asked about how to avoid mistakes in logistics activities. Logistics is like a chess game – you always have to be thinking ahead about what effect any action will have several steps down the road.

Companies often make the mistake of looking at logistics functions through a transactions prism instead of as a dynamic system. When you look at logistics as parts of a bigger system, you can affect the whole. There’s a domino effect where a positive action in one part may negatively affect the results in other parts of the system. We’ve seen people work hard to fix one area and end up “breaking” five others. This is inherent in a transactional environment, and is one of the major reasons companies continue to experience problems with their cost structures.

When you work closely with a company that provides a systematized logistics management service, they view the system as a whole and, from this wider viewpoint, understand the causes and effects that different tweaks will create. This helps them make the right decisions for the whole. There can be many pieces that all have to come together to create a smooth operation. To avoid these types of mistakes, it’s very important to keep looking at the broader picture rather than at each individual piece.

No News Is Not Necessarily Good News

Thursday, September 01, 2011

Most companies today seem to believe that, if customers aren’t complaining, they must be satisfied, living by the philosophy that “no news is good news.” Unfortunately, that is frequently misleading. Many people don’t like to complain or confront, or simply don’t have the time.

If customers aren’t happy, they:

  • Begin listening to the calls from your competitors more.
  • Scrutinize more.
  • Quietly go away, to be satisfied by someone other than you.

It is very important to proactively communicate with your seemingly satisfied customers. Probe deeply to find areas of vulnerability. How are your customers’ customers doing? It’s a good bet that if you’re not actively improving what you’re doing for them, the seeds of dissatisfaction are growing. Remember, once a customer finds a new provider, it’s usually too late to get them back.

Finding out what your front-line people are hearing from customers about how delighted or un-delighted they are, is a good gauge of what’s happening. These front-line people are usually the first to become aware of a problem, but they don’t automatically carry the message back to management. They’re busy doing their jobs, they may be worried about creating problems, or they simply may not think of it as anything special.

For these and countless other reasons, make sure you have periodic meetings between your management and your customer’s management teams to make sure everything is going well. It seems to go without saying, but it provides unseen opportunity to over serve, discover untapped service areas and delight customers.

Relationships Are Critical In Outsourcing

Monday, August 22, 2011

Are you afraid to outsource some of your functions to another company? Do you fear losing control? Do you believe it will cost more than doing it yourself?

These are the primary fears that keep many companies from obtaining the savings and peace of mind that comes from having specialists take over some functions.

Our service – logistics – is one of the most frequently outsourced functions because it provides so many benefits to businesses that can move beyond these fears.

When done right, outsourcing certain functions to another company that specializes in those functions can save you time, money and stress. Good outsourcing is like a good marriage. Both parties bring talents and benefits to the table that make both parties better than they would be alone. But, they have to work together – collaboratively – to make it a strong partnership.

Each party must learn about the other and develop the trust that each is better equipped to manage their part of the relationship. The success of the relationship relies on continual communication and a constant understanding of the needs of their partner. When the partners are right for each other, both will be more successful than either was alone. It must be win-win.

A key advantage of outsourcing, for the outsourcer is that as volume increases and the need for better systems and infrastructure increases to meet those demands, the outsourcer can benefit from the specialists scale and infrastructure. The specialist has already developed systems to handle bigger demand, and because the logistics function is the specialists core business, the function gets disproportionate investment and attention; thus allowing the outsourcer to get all of the benefits of such with investment without restricting their capital. As Jack Welch, past Chairman and CEO of GE said, “Your back office is someone else’ front office; and it’s a good bet they can do it at a profit for less total cost than you can do it on your own.”

While it may seem counter intuitive; turning a function over to another company and letting them make a profit on it can, in fact, save you more in the end; ultimately allowing you to make a greater profit than by doing it yourself.

CSA: Where Road Safety Meets Logistics

Thursday, August 11, 2011

Lots of change in the trucking world; currently we’re in an age of regulation.

The big focus is the recent and ongoing implementation of the new CSA (Controlled Substances Act) laws. Safety has long been an aim of multiple administrations, but the implementation of public safety objectives has typically been left to the states.

By and large this approach has worked. Despite more crowded highways, more construction zones and more trucking – the number and frequency of fatalities has consistently decreased over the last 10 years. Now the federal government is looking to create to drive safety to even higher levels, by ensuring that a consistent standard is developed, and enforced, across the entire country.

Government has done a lot of the “easy” things so far. Now, with CSA, bigger obstacles are being tackled.

They’ve come up with a comprehensive safety assessment putting numbers on performance and creating a level playing field for carriers to provide high levels of safety. Unlike the past, when rules applied to some people and not others, the federal government is working to apply rules evenly across the board. This change will force all carriers to raise their safety performance levels to standard currently implemented by only the better carriers.

Drivers will be held accountable for their actions, and trucking companies will be held accountable for actions and performance. And as this goes on, we believe shippers will also be accountable for their selection processes as to whom they select and why they selected them. We fully expect legal, regulatory and statutory implications (ie Sarbanes Oxley, etc.)

CSA will require a bigger focus on the safety component in the assessment of why you use certain providers. This will change the dynamics of the logistics industry, which has typically focused on a lot of transactions where the lowest cost bidder wins. Safety will become a much bigger part of the decision-making process on what providers to use.

This is good – for the country, for shippers and carriers – in the long run. The challenge for all companies will be staying ahead and managing the disruption over the next 3 – 5 years.

The Times They Are A (Always) Changing

Thursday, August 04, 2011

One of the big trends in the last twenty to thirty years, which has accelerated even further in the last three or four and will probably accelerate even faster in the future, is that companies continue to get leaner and flatter as they downsize and utilize technology more. They’ve reduced costs even after previously reducing costs, and are reducing them once more. There is tremendous pressure on continually reducing costs and doing more with fewer people.

What does that mean to our logistics industry?

We find that as companies have downsized, they have fewer people to execute the same or even an increased workload. What also happens, in many cases, is that you have people that were typically “do-ers” that find themselves in the position of being managers. This can decrease the executive “know-how,” while also reducing a company’s ability to execute.

One common challenge is that many companies are doing with 5 people what they used to do with 7 – 10 people. Despite that, they continue to manage functional areas in the same manner as before. Companies continually try to buy transportation piecemeal on a transactional basis. This forces the company to do (and manage) countless transactions, as opposed to stepping up and operating from a higher level, segmenting pieces of business and allowing a specialist to manage the process more efficiently. The provider can then provide key performance indicators that are mutually developed and make the process more cost effective – giving the company more leverage and control.

Staying Ahead of Legislation

Tuesday, July 26, 2011

Federal and State legislators continually create new laws that affect businesses in many industries. It’s hard enough to watch for new laws that have already been passed and then rush to meet the new requirements.

It is critical for all business owners and managers to think ahead and watch for signs of what new legislation might be coming down the road. This serves two purposes. One is the possibility, if the legislation would be detrimental to your needs, that you could help head it off before it becomes law. It’s a lot easier to stop a law before it’s passed than to get a government to rescind one later. The other obvious purpose is to make sure you are prepared before the law takes effect. When you can see that certain practices in your industry are resulting in consumer complaints, for example, you can be sure there will eventually be a law to change them.

When looking ahead, you can see the signs and have the opportunity to get ready and to gradually change your practices before you are forced to do so. This makes change smoother and easier and, as a byproduct, puts you ahead of your competitors and enhances your reputation. Follow the Boy Scout creed and “Be Prepared.”

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