Solutions Not Rates: Why Network Global Logistics Exemplifies The New Service Model For Integrated Logistics (Network Global Logistics Profile)

Posted on September 22, 2008

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“To begin, one does not have to be in the throes of a disaster to benefit from my area of practice.  While demanding situations in which bridging the chasm between an unexpected outcome and the reality of unrealized results is certainly something for which one becomes known, it is often the ability to see a problem on the distant horizon and structure the appropriate response that has generated the greatest level of client satisfaction.

What makes what I do unique is that I am unencumbered by a commitment to promote a particular methodology such as SCOR or Six Sigma because it is either trendy or has been recommended by the latest expert.

While I have a great deal of respect for both the insight and determination it takes to develop a “standard,” I realized a long time ago that true expertise is directly related to an ability to recognize, understand and successfully adapt to the changing variables of a dynamic world . . . And I firmly believe that an attempt to consign and confine a real-world practice to a set of “universal” standards that fail to recognize the disparate requirements of diverse stakeholders has proven to be folly.”  

From “The Number 1 Question . . . How Can You Help Us? (By Jon Hansen, Procurement Insights Post, April 21, 2008)

 

When I read the Network Global Logistics tagline, “Pioneers in mission critical parts,” the above referenced article came to mind.  While the term “pioneer” is defined as “one who opens up new areas of thought, research or development,” its connotation usually makes one think of an individual or organization that is a trailblazer.  It does not necessarily imply sustainability or even more importantly adaptability.

This is an important distinction as proud claims of innovation or “breakthrough” insight more often that not suggests greater risk versus greater reward to many senior decision-makers.  “What is the old saying, “the higher you get in an organization, the closer you are to the exit door?”  Or the famous, “no one ever got fired for buying IBM.”

At this point you may be asking yourself, what does this have to do with Network Global Logisitcs, or even logistics for that matter.  To begin, when you work in an area such as mission critical parts, the perpetual state of implied urgency magnifies the smallest of errors.  From personal experience, when a production line is down for want of a simple part, or a critical network server needs a $100 fan to continue operating you start to understand the term “under the gun.”

And when the stakes are this high, one of the last things that provides comfort are proclamations surrounding innovation or trailblazing.  What you need is certainy and reliability.  You need results.

So even though the Network Global Logistics (NGL) moniker heralds their roots as a pioneer, what the organization is really saying is that they are “strengthend by experience, not governed by it!”

In my brief interview with NGL’s Scott Riddle and Holly Stapleton, it is this “seasoned adaptability,” that removes risk from their clients’ mission critical supply chain, while simultaneously ensuring optimum performance in what has become a dynamically evolving market.

Solutions Not Rates

In the business world there is a fine line between scalability and adaptability.

With the former, an organization developes a particular product or service (i.e. methodology) to satisfy the requirements of a single, usually financially significant, client.  Once accomplished, the innovative energy shifts from creative problem solving to wide scale applicability.  In short, the company looks to either recoup or expand its revenue stream through an existing model that is based on the premise that what works in one situation will work in another.  

While there are definitely elements of this mindset that are true, ultimately the prescribed “solution” including the “outside of the box” thought process that created it in the first place is confined to a set product offering.  And rather than adapting to subsequent (individual) client needs, the “scalable” solution now requires the client to do the adapting.  Think Kodak, and their approach to traditional film versus digital imaging.  It is an interesting parallel as it clearly demonstrates how a company’s unyielding commitment to its innovative past can result in its current day downfall.

Calling on my many, many years of experience in the service parts arena, the majority of the incumbent logistics players with whom I have interacted (who had also perfected their scalable models) lacked the adaptive “innovative will” to address the increasing demands of a changing market.  While they provided the implied stability of experience, there was a palpable emphasis on addressing the client’s requirements within the tightly structured framework of their service offering. 

In essence, they offered a “turnkey” system based on a “proven” track record in which greater volumes resulted in a structured rate reduction.  The epitomy of a scalable solution.  But does the solution really meet the need? 

The Network Global Logistics Approach

I truly hope that you do not misinterpret my meaning or think that I am suggesting that an existing solution should automatically be discounted as invalid simply because it has gained the advantage of sizeable critical mass.  That is not the case. 

What I am suggesting, is that a potential problem exists when the solution itself becomes the focal point rather than its ongoing ability to address changing customer requirements.  In short, the best solution is the one that meets the client’s requirements at this time.”  And innovative adaptability and proven stability are not mutually exclusive or diametrically opposed.

Unfortunately, and history has proven this to be true – you must read Jim Collins’ book Good To Great, far too may organizations are trapped by a commitment to what they have already done.  Not what they will need to do. 

Network Global Logistics on the other hand, appears to have found the balance or symmetry between historic accomplishment and proactive perception. 

While their “pioneering” background has created a quiet confidence in their organizational skill sets, they have not limited said skills to making one particular solution or methodology fit all requirements.

This means that in the demanding world of the mission critical part supply chain, they are equally comfortable with introducing a new approach as they are with relying on an established program.  This flexibility is what maintains the relevancy of their capabilities, and the veracity of their client offering.

Why NGL?

For those of you who are part of my reagular readership, you already know that an important tenet of the Procurement Insights Sponsorship Program (which includes these profiles) is my total commitment to neutrality.  In assessing the viability of the NGL value proposition, it will be up to you to determine how they may be of service to your organization.  And as is the case with all sponsors, I will direct you to the Link To Our Sponsors section of the PI Blog to investigate their value proposition in greater detail, and at your own convenience.

That said the inherent value of the NGL organization (and once again subject to your own investigation of their services), would seem to be their ability to comfortably adapt to any given situation, while operating within the framework of a proven organization.  Consistency and creativity!

As service level demands increase in a rapidly expanding global market, this ability to understand and adapt is a resource that can offset the risks of your own organization’s “trailblazing” revenue activities.

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