August 2011 | Commentary | Viewpoint

Managing the Three V’s of Logistics

Tags: Supply Chain Management

Page Siplon is executive director, Georgia Center of Innovation for Logistics, 912-966-7867

As the logistics sector's impact continues to broaden across geographies and industries, a variety of factors are adding pressure on companies to improve logistics efficiencies. Three of the most prevalent supply chain challenges are:

  1. Timed temperature control. With goods now being transferred across greater distances than ever before, temperature control is a growing industry concern. Once affecting mainly the agriculture industry, the issue is becoming more important to industries such as electronics and pharmaceuticals.
  2. End-to-end visibility. In today's climate of recalls and 24/7 demand for information, business partners require end-to-end visibility throughout the supply chain. Centralized and integrated data also allows companies to shorten forecasting lead times, enabling more accurate inventory levels for their customers. More accurate inventory information, in turn, reduces the amount of waste due to overstocks and/or out-of-date products, and lowers inventory costs for all parties.
  3. Security. Different types of security impact the logistics sector. First is threat to the product itself. High-value goods such as electronics and pharmaceuticals are increasingly targeted by thieves.

Multinational companies must also remain aware of possible threats to national security at airports and seaports, and across borders. The federal government is playing a greater role in cargo security, from enforcing credential checks at multiple points in the supply chain to enacting tighter regulations and rules that impact both shippers and logistics service providers.

Another area of security concern is the transport of perishable foods around the world, which increases potential threats to the food system. One solution gaining favor is sensor technology capable of detecting certain chemicals and gases resulting from contaminated food.

Addressing the Challenges

Businesses can address growing logistics challenges by focusing on the Three V's: volume, velocity, and visibility.

  • Volume. Maximizing throughput at existing facilities is the most effective and efficient infrastructure to handle growth. Tools to help manage high volumes include warehouse management software, materials handling equipment, and access control systems.
  • Velocity. Businesses can compress their shipping and delivery cycles and improve overall agility or speed of response by implementing information-sharing tools and enterprise resource planning software.
  • Visibility. While real-time shipment status information is vital in the global supply chain, process visibility is equally important to identify and resolve systemic problems. Identification tools such as RFID and bar codes; position detection systems; and container security devices all play a role in providing visibility.

Today's environment of rapid change and increased security pressures companies to constantly adapt to new demands. Supply chain technology can help businesses address the increasing complexity of global logistics operations by managing volume, enabling velocity, and providing visibility. Tomorrow's supply chains will likely provide a new host of opportunities and challenges for logistics professionals to resolve.