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The Importance of a Flexible, Multimodal Strateg
The demands of today’s supply chain remind me of an old carnival game popular at summer
fairs called Whack-a-Mole. In Whack-a-Mole, players benefit from lightning-fast reflexes.
Just when you hammer one of the pesky moles into a hole in the game board, another
one immediately pops up at another place on the board to challenge you.

Bob Stoffel

IN TODAY’S EXTENDED supply chains, unforeseen developments seem to crop up just as fast. For example, companies that are trying to offset soaring fuel prices may adopt a near-sourcing strategy that shifts some manufacturing from China to Eastern Europe or the Americas.
Let’s say you’re a maker of fashion jeans and you’ll soon be ready to begin manufacturing and shipping by ocean from the Americas to U.S. eastern ports for the 2008 holiday peak season.Then you get the news that a couple of potential hurricanes are brewing that could wreak havoc in the Atlantic, resulting in long delays and monumental congestion at eastern U.S. seaports. If that happens, you’ll find yourself facing an even bigger challenge than fuel costs, in the form of stock-outs, losses and disappointed retailers and consumers during your prime sales season.
But what if you already had a Plan B at the Americas plant that could be synced immediately with a contingency plan at your manufacturing site in China? What if that integrated plan could set into motion a series of steps that would shift manufacturing from the Americas to China, or that would shift modes of transport from ocean containers to air cargo,to meet the peak-season deadline expectations of your retail customers?
Indeed, in today’s world, the only way to cover all the holes on the board is by engineering “flexible precision”into your supply chain. With all the variables today—such as fuel costs, currency fluctuations, lane congestion,security regulations, load optimization, shorter product life cycles, export compliance requirements and weather, to name a few—no wonder flexible precision has gone to the top of the supply chain priority list.
A few years ago, the top of that list was dominated by efficiency. It was about getting goods from the most cost effective supplier over the most cost effective mode of transport to the customer on deadline. But today’s world is one of new variables, and new opportunities as well. New brands are also driving growth as suppliers produce their own private labels: for many department stores, private-label goods account for 30 to 50 percent of sales. And perhaps most significantly, technological improvements in visibility can make shifting modes of transport as simple as moving from one tab on a laptop screen to another. In fact, information technology is the great enabler of today’s flexible supply chain, shaping planning and execution and managing events.
All these new challenges and opportunities argue for a high degree of engineering precision in supply chains,which can affect 75 percent of a company’s operating results. Yet many companies still take a “one size fits all” approach. For example, they rely on a single supply chain, a single mode of transport and a single transportation service for all their products— an increasingly costly and risky proposition.
Is there an easy-to-follow roadmap for achieving a successful flexibility strategy that offers peace of mind? A great starting point is an analysis of product and market characteristics that connects priority pain-points with specific solutions to best address those pain-points. For example, in the high-tech and consumer electronics industry, a common pain-point is the high rate of product obsolescence. In high tech it’s estimated that inventory can depreciate 1 percent a week. A key product specific solution often involves moving product faster through the supply chain and maintaining low levels of inventory.
For high-tech, telecommunications and sporting goods firms, another painpoint scenario might call for customization of finished products. Solutions would likely include pursuing a postponement strategy and using the supply chain for modular assembly and/or kitting. What if complexity in the sourcing of your products is a pain-point? Then you want to ensure an effective IT interface between the manufacturer and suppliers,along with increased visibility up and down the supply chain.
When a firm does this type of painpoint analysis, it gains insight into where its true vulnerabilities lie across the spectrum of transportation, inventory and obsolescence costs. Using the product-based analysis as a compass, the next step is to address three key areas where flexibility and precision can make a big difference: sourcing, channels and modes.
As mentioned, near-sourcing is a factor for many companies dealing with today’s escalating fuel prices.Of course, building redundant manufacturing supply sources is also critical backup in the event of a site’s being hit by a manmade or weather disaster. An emerging sourcing consideration is to avoid manufacturing in areas where currency values are rising.
When it comes to channels, the rise of middle-class markets in developing nations is prompting new approaches. Dell Inc., for example, has decided that its direct, built-to-order model is too expensive for developing markets. The company has recently opened new assembly plants in Poland, Brazil and India to make the basic laptops now in demand in those markets.
A careful look at channels might also show that speed offers new growth opportunities. Lewis Hyman, a window-blinds maker, for example, saw an opportunity to gain a competitive edge in serving customers buying custom blinds. The company created a new supply chain approach for its high-end line by using air freight with minimal touch-points, directly to the customer’s residence.
When it comes to evaluating modes of transport, the apparel industry is an example of how new variables demand flexibility. In the clothing market, cost, handling, fashion and seasonality have all accelerated the need for a flexible-mode strategy. During prime retail periods such as the holiday season, leading fashion retailers will shift high-value, high-turnover products like cashmere sweaters from ocean transport to air cargo. With the right planning, retailers can now even cost-effectively shift planned modes of transport while ocean goods are in transit: goods can switch from ground transport to air as soon as they hit seaport docks. The key to achieving a high level of supply chain precision and flexibility lies in partnering with a master supply chain director—or quarterback—to holistically orchestrate all the moving parts and contingency plans. A single point of accountability means fewer bills, better pricing, greater visibility, smarter delivery routing, optimal load management and the capability to shift modes. An effective supply chain quarterback can also provide great value in managing a supply chain’s critical choke-points. These are the crucial points where handoffs are made among suppliers and where damages, losses and regulatory delays most often occur.
Importers into the U.S., for example, have been required to comply with 25 new import regulations since 9/11, and a new requirement is on the way—the importer security filing requirement, also known as 10+2. These regulations further elevate the importance of customs clearance expertise, supplier management and visibility.
Flexible precision requires a transportation network that is not only integrated worldwide but also integrated with freight forwarding professionalism and services. The payoff of a well thought-out flexibility plan and a quarterback capable of executing it? The most business value at the lowest opportunity cost.

CPC Logistics Announcement
CPC Logistics, a national U.S.-based company specializing in contract truck driver and related logistics services, has formed a new Canadian Corporation, Logistics Professionals Limited, that recently acquired Huron Services Group Limited, a Canadian logistics firm and member of the Private Motor Truck Council of Canada. CPC’s existing Canadian company, CPC Logistics Canada Limited, will now also be a subsidiary of Logistics Professionals Ltd. and together with the acquisition of Huron will enhance the resources of CPC Canada’s existing operations and will assist in expanding Huron’s current service offerings in the provinces of Alberta, Ontario and Quebec, Canada.
CPC is celebrating its 35th year in providing professional transportation and logistics services to many Fortune 500 firms that operate private fleets.

Due to internal growth and external acquisitions, CPC has grown to over 4,000 employees providing the services of truck operators,warehouse workers, dispatchers, fleet management and administrative support personnel from its 25 field offices.Additionally, the firm provides other logistical services to assist private carriers in effective fleet management. The combined entities of CPC Canada Limited and Huron Services Group Limited will draw on Huron’s 40 year service record and CPC Canada’s existing resources, to bring its services to many leading Canadian corporations.

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