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.