Procurement professionals should stop viewing logistics as one of many spends to be wrapped up in the category management bag, and start engaging in real dialogue with logistics professionals if they wish to achieve real cost reductions and efficiencies, the Strategic Sourceror recommends. By viewing logistics through the eyes of a professional logistician, the article argues, procurement practitioners will get a more realistic appraisal of how true sourcing savings can be achieved and opportunity assessments improved.
Where procurement pros are inclined to focus on cost reduction when considering logistics, logisticians are trained to consider a wider and more strategically important picture, including opportunities to mitigate risks, improve efficiencies, and achieve timely deliveries of products. What might look to a procurement pro like an attractive low-cost option can often be identified by a logistics pro as a potential ‘horror story’, involving delayed shipments, lost freight in the carrier network, and chaos throughout the supply chain. An apparent cost reduction can thereby be exposed as an inefficient and expensive dead-end.
The article continues: “Unexpected legislation, capacity concerns, driver shortages, extreme weather – these have become inescapable part of everyday life. More importantly, they’re a reminder of why it’s so crucial for Procurement and Logistics to pool their combined expertise and start collaborating.”
Facing these challenges, as well as new ones, is much less of a risky business when procurement and logistics work together. Both parties may need to set aside preconceived ideas about each other to build this collaboration, but tensions requiring sound supply chain management and repairing relations with carriers can be enhanced by combining one another’s unique insights. Logistics is a changeable and complex category, whose professionals and price points have to deal with many things that are beyond their control. But, the article concludes: “Bringing Procurement and Logistics closer together will empower both units to optimize what they can control and devise an effective response for everything else.”