By: David A. Lawrence, Esq.
Earlier this summer, our Dulles GovConnections Lunch & Learn heard from national experts (UPS, CapGemini & The Chertoff Group) in Supply Chain Logistics. Logistics is now cool. Our world is more interconnected and everyone is trying to manage the expense & risk of moving things & people effectively to help the bottom line. Here are some practical takeaways in case you missed it or want a reminder.
First, what is Supply Chain Logistics? In a nutshell, it’s managing the risk of disruptions & mitigating the disruptions that do occur, all in an effort to increase profits. It’s having in place steps to maintain and improve the integrity of the Chain (e.g., secure, not contaminated, no malware, etc.), and still be fast & efficient in delivering your service or product to your customers. You don’t want to unnecessarily interrupt or slow down the chain. But you still want to keep a high integrity of items, people & data flowing thru the chain.
Good logistics can lower insurance & surety costs, assure compliance with customer requirements & protect a company’s brand. Not all logistics solutions are expensive.
Second, where do these disruptions come from?
– Natural disasters
– Volatility of goods, commodities, people & labor, and energy prices
– Physical infrastructure
– IT, communications & data flow
Third, Supply Logistics affect many industries, for example: Construction projects – the schedule is everything! IT Solutions – integrity of components, software, installation, delivery. Ecommerce – ability to easily order, pay, receive & return goods. Pharma Drugs – integrity of components, tracking orders & deliveries. In many government contracts – Buy America Act requirements, Foreign Corrupt Practices Act & readiness for the next DOD build-up (maybe the Pacific Rim).
Finally, what are some ways to reduce your risk?
– Use visibility tools to see issues before bad things happen.
– Partner with quality people & vendors.
– Perform good due diligence of your suppliers.
– Map out your supply chain – that initial step can point out many bottom line dollar improvements.
– After you map out your supply chain, then identify risks and mitigate them.
– Monitor & flag anomalies.
– Verify component parts before you install them in your systems.
– Oversee vendor relationships.
– Particularly with cyber issues, protocols, procedures & training are key to reducing threats & risks.
– In contracts with both suppliers and customers, try to allocate risks of the supply chain (both downstream & upstream parties) and set out expectations.
– And, in the case of government contracts, do all of this, while at the same time dealing with the government’s mentality of lowest cost/technically acceptable.
August 20. 2013.