You call a department store and order a refrigerator. The order clerk politely
asks you what day and time would be best to deliver your appliance. How does
the store get fridges to all their customers?
Simple -- they hire a logistics firm.
Jim Davidson is a vice-president and general manager at a logistics firm.
"In the state of Indiana, we do most of the home delivery for Sears' big ticket
items," he says. "Blue uniformed people with Sears on their shirt deliver
the items, but they're our people.
"We've implemented programs like window times, where at the point of sale,
Sears would ask the customer what day and what time of day the customer wants
the item delivered. We deliver it within a two-hour window. Sears couldn't
do those things themselves."
When people enter the logistics industry, they stay put. Is it because
of the healthy salary? "I don't think money keeps them in the career," says
Davidson. "Enough studies have been done to show where money stands as a motivator,
and it's never number one. People like the [varying nature] of logistics and
the ability to be part of a complete project. Instead of putting a nut on
a bolt in a car factory, it would be comparable to building a whole car.
"We have customers with multimillion-dollar contracts," he says. "To sell,
implement and operate such a business takes a team effort. You get tremendous
satisfaction out of being able to bring something up out of the ground and
see it work as a result of what you've been able to do."
Professor Patrick Barry is part of the logistics and transportation department
at Northeastern University.
"Logistics goes right back up the supply chain to the raw materials," he
says. "People are beginning to call it supply chain management."
Barry, a full-time lecturer in logistics and transportation, spent 10 years
with the United Parcel Service. He was responsible for developing and training
several teams dedicated to providing UPS's larger customers with integrated
logistics solutions.
"For the most part, it's dealing with transportation and storage," says
Barry. "But because everyone is so concerned with inventory today, logistics
also deals with the financial aspect of it."
For every dollar of inventory a company holds for a year, it costs them
between 25 and 35 cents in carrying costs. It's easy to see how inventory
has become a major issue.
"In the 1970s, we used to believe inventory was really just cash sitting
around on the floor of the warehouse and on a balance sheet. But today, we
realize that's not the case," says Barry. "Now, the logistics manager uses
different transportation modes and storage modes to affect the amount of time
a company holds an inventory. And he's balancing that against customer service."
Marilyn Ryder is an expert in production and inventory control. Her association
teaches courses in logistics management and offers certification in the field.
"Companies are looking for people who graduate out of a school...with a
piece of paper that says this person is an expert at logistics management,"
says Ryder.