Materials Handling column: Keeping up with the times [from the October 2012 MM&D print edition|

FROM THE OCTOBER 2012 MM&D PRINT EDITION

From the perspective of somebody who has spent a long time in the logistics industry, I am constantly amazed by how quickly the technology and business change.

Compared to three decades ago, information of all kinds is widely available in the logistics universe. More importantly, it is available on a timely, if not a real-time basis. This is especially true since things like in-transit data did not exist previously.

When I first joined the logistics industry,you could get accurate information about shipments and receipts, but much of the detailed in-transit information on specific shipments was not available unless you laboriously traced it by phone. Forty years ago, this gradually started to change, first for rail (I can still remember tracing rail boxcar shipments by telex), and then for truckload shipments.

The cost of obtaining this information has also decreased dramatically over the decades. Now, with new technology for tracking and tracing, we can even get accurate information on small package courier and express postal shipments.

The widespread availability of real time logistics information has led to considerable efficiencies in logistics. An example of this is the reduction—and sometimes elimination—of the “just-in-case” inventories many businesses carried. Today, inventory calculations routinely include in-transit inventory. (As a reference point, the first columns I ever wrote for MM&D over twenty-five years ago dealt with the impact of just-in-time inventories on various warehousing disciplines.)

Historically, many of the logistics disciplines (such as purchasing), commonly operated in an isolated, silo environment where people only reported upward within their own discipline. The arrival of technology has brought with it downsizing and flattening of organizations through the elimination of layers of middle management. As a result, to run a successful logistics environment today, we need to work with a wider variety of professionals on cross-functional teams.

The impact of this changing world for providers of logistics education is clear. In addition to the traditional depth of knowledge within a discipline there is a need to provide training across a wide breadth of associated disciplines. Thus a traditional curriculum for a discipline like purchasing or Customs brokerage needs to be expanded to include elements of materials management, traffic and transportation.

Additionally, education programs need to consider the logistics environment far beyond Canadian borders. Development of free trade zones and international supply chains means that issues beyond our borders increasingly affect logistics functions.

The growing concern with security—both from an anti-terrorism perspective and a crime prevention point of view—has resulted in a demand for shipment visibility from origin to destination, sometimes in real time. This means logistics practitioners have to be knowledgeable about foreign rules and regulations, not just domestic ones.

In the past, Customs dealt mainly with imports since many industries were mainly oriented to the domestic market. (Of course there were always exceptions and export-oriented industries.) Under the Canada-US Free Trade Agreement and the North American Free Trade Agreement (NAFTA), many domestic industries retooled to serve the broader North American market but to did so by offering fewer items.

NAFTA meant that, over time, we were supposed to evolve into a seamless entity, making much of the Customs paperwork disappear and simplifying the logistics process. However, since the 9/11 terrorist attacks, there has been an emphasis on complete visibility into all shipments heading to the US, starting right at (or often before) the moment of shipping. This cross-border situation is just one example that proves a Customs practioner has to be equally familiar with both domestic and overseas rules and regulations that were formerly of little concern.

And it’s not just the Customs broker who needs to worry about international rules. The global nature of the supply chain affects every aspect of a logistics operation. Even people concerned with packaging need to know what’s going on in the world. For example, due to concerns about insect infestation, there are now regulations about the type and quality of wooden pallets that can be moved across the Canada-US border.

Fortunately, technology does provide some relief and helps us cope with this changing world. One way it does this is through long distance education. With high-speed Internet and e-textbooks, the majority of course material can be delivered electronically.

The use of high-speed Internet allows instructors to upgrade basic lessons into full audio-visual presentations. Now, a lecture on a topic like containerization (including segments on container ports, rail and truck drayage) can be given with video and interactive components and not just still pictures.

For logistics educators who want to take their courses to the next level, creating a long-distance classroom with real time student and teacher participation is the final step in designing a compelling program. Use of technologies like webcams and Skype allow people to engage with each other if they’re on the other side of the country or opposite sides of the world.

Dave Luton is a consultant in the greater Toronto area.