Major Logistics Concerns
Procurement professionals are tasked with building reliable supply chains, keeping costs in check, and complying with government regulations. Supply chains are complex structures susceptible to a variety of risks. Price volatility, supplier failures, damage to infrastructure, and political disruptions are just a few of the concerns that can bring assembly lines to a standstill.
Resilient supply chains allow businesses to respond to a variety of challenges; weak links may snap under pressure. The core function of logistics is to move goods from the point of origin to the consumer. Here are common supply chain risks that can interfere with that goal:
- Price Volatility: The cost of raw materials can fluctuate depending upon supply, demand, or speculation. Unexpected price spikes may shrink margins or cause a slowdown in production.
- Supplier Risks: A partner’s problems can quickly become your own. Financial stress, labor concerns, or compliance violations could affect the performance of a vendor.
- Infrastructure Damage: The network of highways, railroads, waterways, and air routes are what connect parties all along the supply line. Earthquakes, hurricanes, and floods threaten to isolate partners.
- Political Unrest: Governments can exercise a great degree of control over economic activity. Sanctions, trade disputes, and war can be as disruptive as natural disasters when it comes to the free movement of goods. Global supply chains may reduce costs, but they also create vulnerabilities.
Types of Logistics Jobs
The field of logistics is composed of many positions. Purchasing officers, warehouse managers, supply chain experts, compliance analysts, and transportation coordinators are just a sample of common job titles. Programmers and data analysts will become increasingly important as more companies try and integrate data and analytics into their operations.
Logistics & Ethical Sourcing
Ethical concerns are of keen interest to procurement officers. Every attempt must be made to avoid doing business with companies that violate environmental laws, exploit labor, or engage in corrupt practices. The scale and complexity of supply chains can help unethical companies hide their behavior, but technology empowers logistics professionals to evaluate and monitor suppliers like never before.
Online compliance solutions can flag potential warning signs, such as a manufacturer with factories in countries known to turn a blind eye towards forced labor. Insights into key officers and corporate families may also reveal a high risk for compliance violations.
The Future of Logistics
Logistics stands to benefit greatly from technological innovations like the Internet of Things, or IoT. Visibility into every stop along the supply chain helps companies identify inefficiencies and manage risk. The technologies listed below have major implications for logistics, and many are already in use:
- Machine Sensors: Factories can monitor the performance of machinery in real time. Predictive analytics allow manufacturers to estimate when components will fail so that they can be replaced ahead of time.
- RFID Tracking: Radio-frequency identification tags can be attached to vehicle parts, products, packages, or even railcars in order to establish their origin, list contents, or track movement.
- Data, Analytics, and Artificial Intelligence: Information gathered from the factory floor, ports, warehouses, and roadways gives logistics professionals greater transparency into operations. Predictive analytics and artificial intelligence promise to anticipate challenges and opportunities with minimal human oversight.
- Robotic Warehouses: Machines can already locate boxes and load containers. Advances in both their physical and computational abilities will lead to increased efficiency in packaging and storing goods.
- Automated Transportation: Unmanned drones and driverless vehicles will soon be transporting supplies and delivering products. Limited only by a need for fuel and electricity, these machines may be able to work longer hours than their human counterparts. This would decrease the time it takes for a product to get from the factory to the customer’s door.
You can learn more about supply chain risk management, ethical sourcing, and other logistics topics in the articles listed above.