Companies should review their logistics networks every six months and plan for a major overhaul every three to five years in order to keep pace with the increasing number of supply chain disruptions, panelists said in a session today at the CSCMP Edge trade show in Nashville, the annual industry conference for the Council of Supply Chain Management Professionals.
One challenge in reaching that goal for any company is keeping their data fresh to enable meaningful performance reviews, said Claudia Knowlton-Chike, a panelist and former General Electric executive. To get there, organizations need to collect, cleanse, and review their own data frequently, and then get every department in the business to agree that it’s accurate, she said in a session titled “Leadership Panel: Managing and Planning for Changes in Logistics Networks.”
Another challenge is striking a balance between hiring outside consultants to guide the logistics network redesign and training current employees to do it. Most companies decide to use hired help the first few times before transitioning to a less intense “managed services” role with consultants, since experienced employees are often expensive to employ over the long term and tend to get recruited by other firms, said Thomas Boykin, a panelist from and specialist leader at Deloitte Consulting LLP.
However, the rewards for creating more optimized logistics networks can be great, with savings from streamlined systems estimated at 10% to 20% of total logistics spend, the panel agreed.