A 2001 Supply Chain Odyssey

Had science-fiction guru Stanley Kubrick been a logistician, even he would have been hard-pressed to envision or even script an odyssey as surreal and unimaginable as 2001.

Californians spent the beginning of the year in the dark—literally—as gas and oil prices skyrocketed and fuel surcharges became an added burden. If ever there was a doubt that oil was the lifeblood of American industry, it quickly burned, along with any profits businesses were achieving.

A tentative stock market lulled Americans into a mental recession. As budgets tightened and fear of investment grew, companies took a more pragmatic, grass-roots approach to enhancing their supply chains. Hesitant to invest in risky technologies as a result of the dot.com meltdown, businesses reconsidered strategies and core competencies, reconfigured priorities, and outsourced supply chain operations to 3PLs.

Collaboration became a hot word, and the much-ballyhooed General Electric/Honeywell merger became the poster child for strategic acquisitions—for better or for worse. In this case, it turned out for worse. 3PLs looking to secure their foothold in a rabid market sought takeover candidates or allinace partners to enhance their service portfolios.

Ironically, the threat of an economic fallout provided a much-needed impetus for action. After seven years of relative prosperity, industry had become flush, relaxed, and content, with an ample surplus of cash. A call to arms for logistics action prompted businesses to get back in shape, trim excess fat off their supply chains, and get logistics departments running at high speed.
Then came September 11th.

The terrorist attacks on America brought industry to a halt as businesses recoiled and became defensive. “After the terrorist attacks, everybody just hibernated for a month or so, going back to the methods with which they were most comfortable,” notes Jim Davidson, president of NTE Inc., in our year-end roundup story (page 28). But this “hunkering down” was merely a reflex response. Could it become a chance to regroup and move forward? Let me know: [email protected].

We hope American businesses are poised on the cusp of a new year, a new beginning, a new cycle. International trade has no doubt been compromised by tighter security at border crossings and ports, and globalization has assumed even greater importance. But fuel taxes have been cut and manufacturers, carriers, and intermediaries on down the line are ready to spring into action with a renewed sense of vigor and purpose.

Businesses now have the most important tool in their pockets—experience. 2002 will be, as another science fiction creator, Aldous Huxley, termed, “a brave new world”—one where logistics excellence, more than ever before, will thrive.