By Joseph Bonney
Source: Journal of Commerce
May 9, 2005
At last week's Trans-Atlantic
Maritime Conference, a chorus of speeches and PowerPoint presentations
bemoaned port delays, trucking shortages and rate increases. John
M. Bolte sang a different key.
Bolte is managing director of BDP North America, the Philadelphia
logistics and transportation company. He agreed that port and
trucking problems are real. But he said the attention they receive
is out of proportion to their importance to the supply chain.
Or supply chains. Bolte said they're usually plural.
"A supply chain is not one thing," he said. "Every
time you have an origin and destination, you have a supply chain.
We work with DuPont, which has 287 supply chains. They differ
by business unit and product. Some are supply chains within supply
chains."
Understanding how they work - start to finish - is the key to
controlling costs, he said. When a shipper's import container
is stuck in port for an extra two days, it's an event that's noticed.
But at that point, it's usually beyond the shipper's control.
"I guarantee you that's not where you lose the most time,"
Bolte said. "There's a tremendous amount of 'play' in supply
chains, and a lot of it has to do with advance information. I
think too much focus is on the physical side of the business -
the equipment, the carriage of the cargo. In my experience, about
50 to 60 percent of delays are because of lack of advance information."
Bolte said the typical supply chain has 13 to 31 days of play,
or flexibility, in its schedule. An example is the required ship
date. He said this often is poorly defined and can be adjusted
to avoid problems farther down the chain.
And he said the physical side of transportation usually isn't
the best place to seek lower costs. If transportation capacity
is tight, shippers are going to pay more - there's no getting
around it. But Bolte said shippers who study their supply chains
and ensure good information flow can reduce total costs even when
transportation rates are rising.
This is less a question of fancy software than of understanding
how the supply chain works and communicating the information.
"What I think it boils down to is understanding your supply
chain from end to end and making sure the facilitators have the
information when they need it," he said. "You have to
make sure that two or three days prior to each milestone, the
proper information is delivered to the proper facilitator to make
sure that your supply chain is on track.
"Port congestion certainly is an issue," Bolte said,
"but a lot of times what happens is that it adds to the delay
that you already incurred because of lack of advance visibility
or advance information."
Integrated logistics offers opportunities for logistics companies
such as BDP, but it also requires the right shipper. "You
need a high-enough decision maker," Bolte said, "one
who has the big picture in mind."



