inbound

Quotes of note

As expected, the Council of Supply Chain Management Professionals’ (CSCMP) recent Annual Global Conference and the concurrent International Air Cargo Association ACF 2012 exposition offered a wide range of educational sessions and industry panels. The events also produced some unexpectedly candid and even lighter moments. Here are a few samples:

▪ Funniest line from either meeting: “I am a recovering airfreight forwarder,” by Brandon Fried, executive director of the Airforwarders Association.

▪ Best performance by an actress in a leading role goes to Janet Kavinoky, executive director of transportation infrastructure at the U.S. Chamber of Commerce. Responsible for filling 90 minutes solo at a session on the last day of the CSCMP conference, Kavinoky brought her A-game. She worked without a script and moved effortlessly around the room, speaking about the recently signed transportation bill and the ways of Washington in general. She started with a sparse group, but eventually more people filtered in. By the end, Kavinoky and the audience were involved in an energetic (dare we say rowdy?) give and take about current transportation issues.

▪ Worst performance by an actor in a leading role goes to U.S. Secretary of Transportation Ray LaHood. Keynoting the International Air Cargo Forum and Exposition, LaHood gave a canned presentation that basically said a strong international air cargo industry expands global trade. During the follow-up Q&A, LaHood responded to one query by saying, “I need an easier question, one I need to know the answer to.” LaHood has a lot on his plate and rarely gets directly involved in international air cargo issues. Still, he should have been briefed better so he could have given the throng of experienced airfreight folks a relevant speech on the issues that affect them.

▪ Though there was plenty of hand wringing at both shows about Europe’s economic situation, perhaps the gloomiest account came from John Pattullo, CEO of the Netherlands-based freight forwarding giant Ceva Logistics. At a media breakfast, Pattullo noted that some of his company’s European customers are reporting sales contractions of 15 to 20 percent, and described a meeting with the head of a large Italian company who spoke of suicides among Italian business leaders. “Southern Europe is more depressed than you can imagine,” Pattullo said, adding that it may stay that way for the next five years.

▪ On a more optimistic note, one company seemingly unaffected by the European turmoil is Prologis, the world’s largest industrial property developer. The company has a 92-percent occupancy rate in Europe, where it owns and manages 140 million square feet. Steven J. Callaway, senior vice president and head of global customer solutions, said one factor propping up European occupancy rates is customers’ multiyear investment strategies that discount short-term cyclical issues, no matter how painful. Another is that Europe does not yet have a mature distribution system, he said. One other point in Prologis’s favor, according to Callaway: “We don’t serve Greece.”;

The Navy knows: Treat
your suppliers right

As commander of the Naval Supply
Systems Command, Rear Admiral Mark
Heinrich must deliver supply chain sup-
port for “America’s Away Team” around the
world. With more than 100 ships typically
under way at any time, the stakes are high
and “mission execution is key,” Heinrich
said in a session on performance-based
logistics at the Council of Supply Chain
Management Professionals’ 2012 Annual
Global Conference.
Speaking directly
to the budget chal-
lenges the U.S. mili-
tary faces today, he
said, “We know that
with better relation-
ships with our sup-
pliers, we can per-
form in a more cost-
wise manner.”
ships with suppliers based on the Navy’s
experience. Just three examples:

▪ Suppliers’ return on assets is a critical parameter, which implies that buyers must carefully consider the term of a contract. “Too short, and companies can’t invest. Too long, and you drive out competition.”

▪ Alignment is about behavior, and that means wielding both the carrot and the stick. The big carrot buyers can use: creating an opportunity for suppliers to make more money if they deliver greater value. An effective “stick” is to break apart a bundle of business activities and have the supplier compete for the now separate services.

▪ Consistent and transparent governance is important, but the buyer should be careful not to “over-torque” oversight. Insight can easily stray toward intrusion, Heinrich said. ;