CSCMP's Supply Chain Quarterly
June 27, 2017
Supply Chain Executive Insight E-Newsletter
Each month the Supply Chain Executive Insight e-newsletter will include brief articles about developments that are often overlooked by other supply chain publications. We will present you with summaries of the latest research as well as new ideas on how to make your supply chain operations more effective. And we'll offer commentary that sheds light on what's happening in supply chains today.
Sign up now!

Most Read Articles

News from our sister publication
DC Velocity
Forward Thinking

New index polls logistics managers to gauge U.S. economy's direction

Comment
Logistics Manager's Index seeks respondents for monthly poll measuring transportation, warehousing, and inventory activity.

If you want to know where the U.S. economy is headed, ask a logistics manager. At least that's the theory behind a new economic index that was launched last September by five universities, and backed by the Council of Supply Chain Management Professionals (CSCMP).

The "Logistics Manager's Index" (LMI), similar in approach to the long-running "Purchasing Managers Index" produced each month by the Institute for Supply Management (ISM), is based on a monthly poll asking logistics managers to rate whether factors such as warehousing capacity, utilization, and prices; inventory levels and costs; and transportation capacity, utilization, and prices are increasing, decreasing, or staying the same. The information can act as a leading indicator of the health of the overall economy, according to Dale S. Rogers, professor of logistics and supply chain management at Arizona State University, one of the five schools collaborating on the index.

"For example, a lot of times if you know what's happening in trucking, you know what's going to happen [to the economy] in the future," Rogers said in an interview.

Separate indices for the various elements are combined to create the overall LMI score, which is indicated as a percentage. The November/December LMI came in at 62.9 percent, an increase of 8 percentage points from the October reading of 54.9 percent. The LMI is calculated using a "diffusion" index—a reading above 50 percent indicates logistics activity is expanding, and a reading below 50 percent indicates it is shrinking. Some of the results are also broken down by industry, such as furniture or retail. Although the Index is currently based only on responses come from U.S. managers, their companies do business throughout the world.

In addition to support from Arizona State and CSCMP, researchers from Colorado State University, Portland State University, Rutgers University, and University of Nevada, Reno are working on the index. DC Velocity and CSCMP's Supply Chain Quarterly are the index's media partners.

The idea for the index arose from the Great Recession of 2007-09. Many industry observers noticed a significant softening in transportation and logistics demand in 2007, a year before the economic crisis began to hit hard. "It was clearly a leading indicator, but we didn't realize how much," Rogers said. "So we began to wonder whether there was some way for us to track this on an ongoing basis."

The index is still in its early stages, and Rogers and his colleagues are seeking more logistics managers to take part. Currently the poll is sent to all CSCMP members and is now being expanded to readers of DC Velocity and CSCMP's Supply Chain Quarterly. Participants receive a special report with the index results and are invited to an event at CSCMP's Annual Conference. Those who would like to be part of the standing panel that takes the brief survey should contact Rogers at dale.rogers@asu.edu.

Susan Lacefield is Senior Editor of CSCMP’s Supply Chain Quarterly.

Join the Discussion

After you comment, click Post. If you're not already logged in, you will be asked to log in or register.


Want more articles like this? Sign up for a free subscription to Supply Chain Executive Insight, a monthly e-newsletter that provides insights and commentary on supply chain trends and developments. Click here to subscribe.

We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter 2017: New index polls logistics managers to gauge U.S. economy's direction"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.

Want more articles like this? Subscribe to CSCMP's Supply Chain Quarterly.