September 2008 | Commentary | Checking In

The Short Loop is Better

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Suppose, for some unknown reason, the hot/cold water valves for your shower were installed in the basement, next to the water heater.

When you wanted to take a shower, you'd have to go to the basement, turn the water on, then walk upstairs to the bathroom. If you needed to adjust the water temperature or flow, you'd have to get out of the shower, wrap a towel around you, and traipse back down to the basement, dripping water all the way.

Having hot/cold valves at the water heater would be considered a long-loop control. Having them in the shower is a short-loop control. It's obviously silly to have the long-loop control in the shower, so why do we tolerate it in logistics?

In logistics, the flow of inbound product—like the water—starts far away, from across the country and around the world. If you don't practice demand-driven logistics, the controls regulating product flow are located at the point of origin.

Wouldn't it be better if your supply control loop was located exactly at the point of the demand flow instead of in another time zone, in a foreign language, and with someone else's hand on the control?

Locating the hot/cold water valves in your shower instead of the basement, you could finely adjust the product flow to dovetail more efficiently with what customers buy from you.

Practicing demand-driven logistics gives you the ability to fine-tune your product flow exactly where the change signals emanate from. Selecting a carrier that can give you short-loop, pipeline control—exactly where you are, all the long way back to the supply origin—would be one way to do this.

Many carriers offer this level of visibility and control, not just across the country, but around the globe. This being our annual trucking issue, it's worth considering how you can engage carrier partners in a more intuitive way, leveraging their capabilities to gain better control of critical demand points all the way back to supply sources.

U.S. shippers and consignees are beginning to recognize that greater control over distribution loops—and in some cases, shortening these loops—goes a long way toward streamlining transport costs.

Lisa Harrington's article, Ground Tactics (page 36), examines how companies optimize distribution networks to rationalize transportation movements and costs, and better meet customer demand.

In Trucking Perspectives (page 45), you can familiarize yourself with the many variables that comprise a demand-driven approach. Moreover, IL's annual Top 100 Motor Carrier directory (page 56) serves up trucking companies that can deliver the goods and offer the premium services to help you better manage inbound movements.

If you don't have processes and partnerships in place to anticipate and mitigate supply chain changes at a moment's notice, variables are more likely to throw you for a loop, sending customer relationships and profits spiraling down the drain.


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