Logistics Motivations During The Virus – The Swing Between ‘Just Get It Done’ and EfficiencyMay 4th, 2020
The Coronavirus crisis has shown a marked swing in the motivation of logistics companies to just get the job done at any cost.
After all, lives have been at stake, not to mention the survival of businesses, so this is to be expected and indeed applauded. But it marks a big shift from the standard supply chain mantra of “efficiency, efficiency, efficiency”.
What Will Happen as the Worldwide Lockdowns Loosen Up?
CACI’s logistics centre of excellence has been providing solutions to logistics operations for over 30 years. We know that there are many reasons why our customers invest in our services, which often include:
- To get the job done. Any logistics exercise, particularly planning routes is complex and often organisations have scaled to such a level that they cannot do it with google maps and local knowledge which they may have previously done. They need help and so they come to us.
- To save money. Logistics is a hugely expensive exercise. Buying / leasing vehicles, employing couriers or 3PLs, paying a workforce of drivers, filling those vast fuel tanks day after day, insuring the operation … the costs can be vast. But the benefits can be there for a well run organisation and so companies with fleets of vehicles come to us to help them reduce the costs and ensure a healthy profit.
- A smooth operation. When the operation is running, if it isn’t controlled then costs can also spiral, no matter how well it is planned. Our customers look to us to introduce operational checks to ensure control is not lost.
- Better customer services. Companies need to offer a good service to their customers otherwise they’ll lose them. CACI can help them look after their customers, communicate efficiently with them, so that they end up coming back.
- Gain insights for making big logistics decisions. CACI can simulate real world logistics situations, providing valuable insights to help important decisions to be made.
- To differentiate and win business. Our 3PL client base need to win and retain their contracts. We can help add credibility to any logistics pitch by showing how solutions can work and what they’ll cost.
- Ensure compliance. Our solutions help the key staff of our customers sleep at night, by helping them achieve compliance in many areas.
Pre-Coronavirus, ‘saving money’ (#2 in the list above), was hands down the leading motivation for using CACI’s services.
However, during the virus, this has switched to ‘get the job done’ (#1 on the list above).
So What Happens as Things Start To Ease?
We believe that the wider economic situation will play a massive part in dictating what will happen. Governments around the world have reacted differently, be it grants, Furlough payments or other forms of injection. During March the numbers pledged by different governments to help keep their respective economies afloat and to inject some form of stimulation included $2 trillion in the US, £330 billion in the UK and $114 bn in Australia, to give some examples.
This is undoubtedly going to result in public debt and budget deficits being very large and that’s the nub of it. How do governments balance their books?
Typically, national treasury’s don’t have a magicians hat, they don’t like printing money and so they levy some form of taxes. Taxes means that companies have less net profit.
Will this be true for companies with logistics operations? Yes. Are companies with logistics operations in a position to ride the wave better than other companies due to the surge in home shopping? Some. But it’ll be tough for them all.
So an answer to the main question posed in this piece is that ‘efficiency’ will be re-crowned as the logistics king once again. Demands will stabilise, organisations will work out how to ‘just do it’, many with CACI’s help. Focus will turn to making that all-too-necessary profit, which will be tougher than normal and so the need for lower costs and higher efficiencies will be higher than ever.
We would very much like to help companies achieve this too.
If our logistics team’s knowledge could help you improve delivery efficiency with route optimisation or enhanced address data at this pressured time, we would be glad to offer any immediate advice and support we can. Please get in touch with one of our specialists. They can also help with specific enquiries about Truckstops routing software or using premises level geocoding and AddressAnalytix.