“Logistician of the future” – Supply Chain Manager

The materials of the “classic logistician” are time and space; he combines this inseparable pair into an order that is profitable for every company. Since time and space are very scarce in our world, they are the essential logistics materials for companies. In the past, those who were able to deal efficiently with the Siamese twins of time and space were sometimes able to hold their own in tough international competition.

Even though traditional logistics has made an enormous contribution to value creation in recent decades in order to increase prosperity even in the most remote parts of the world (keyword: global village), we are reaching our own entrepreneurial limits with traditional logistics. However, with Supply Chain ManagementSCM – (“logistics of the future”), we can open up these boundaries even further:

SCM – Vertical cooperation for the benefit of all

With supply chain management, i.e. with cooperation across numerous production and service levels, the SC manager analyzes and designs the value chain from the development of a product or service (!) to sales to the final customer. The fine art of modern SCM – and this is what is really new – is that three essential requirements must be met:

Win*Win*Win = Win³

  1. The total profit (total added value) of the value chain is increased.
  2. The individual profits (individual value-added services) of the participants in the value chain are increased or at least not worse off (Pareto efficiency).
  3. The price/performance ratio for the end customer is improved.

How is this possible?

By analyzing and redesigning the entire – previously inefficient – value chain, risks, costs, services, options for action and other numerous value creation elements (added value) are redistributed, thus creating completely new opportunities for cooperation between the individual participants within the product and service creation network. To put it formally: many small local optima are transformed into a global optimum and each individual local optimum is improved or not made worse off by redistributing the aforementioned value-added services. We are no longer optimizing the individual company, but optimizing the entire – success-critical – service chain. This means that in future, it will no longer be individual, isolated companies competing against each other, but entire supply chains that will enter into global competition

It is now up to the companies, consultants and training institutions to impart the knowledge, skills and know-how quickly and consistently with the competent knowledge and experience carriers.

Further information can be found under “Costs of impatience in supply chain management”.