What makes a great logistician?

Logistics, when formerly known as materials handling, storage and distribution, was less complex, with the disciplines required to make the materials, components, sub-assemblies flow cost-effectively through all the production processes well understood. But it was a small field of disciplines relative to what is required today to fulfil the effective control of the global supply chain from raw materials through to final consumer. Driving that change from relative simplicity to complexity is globalisation, in which global companies will typically source on a worldwide basis for global production.

While logistics nowadays rightly attracts far more board attention, those thinking of rising to board level through the logistics hawsehole might like to think twice, because it would be like needing encyclopaedic knowledge in your head. It would be no exaggeration to say that a great logistician needs a tolerably good grasp of subjects like global economics and politics, good governance throughout the global supply chain, and even history. Now that is a tall order for any one person but logistician directors can alleviate that by ensuring the teams under them have the various knowledge disciplines to look at all the angles. So far, however, experience suggests there is still much room for improvement, the 1995 Kobe earthquake and the Japanese 2011 tsunami being good examples.

The risks to smoothly operating logistics are legion. Those logisticians who do not anticipate, assess likely disruptions and have robust plan Bs to fall back on are asking for trouble. These risks range from industrial accidents involving key, globally-demanded components, through to natural hazards like earthquakes, hurricanes, tsunamis and volcanic eruptions. The latter have been used by insurance companies to assess disaster-prone areas but they cannot accurately forecast future events. But what about the less likely and more opaque risks of a political/economic nature, and is enough attention being paid to labour conditions in one's supply chain partners? Should they be a worry? Yes, they most certainly should.

Take the economic threat for starters. Would it surprise you that the International Monetary Fund (IMF) at a meeting last month thought Italy was considered a bigger threat than a no-deal Brexit? On one analysis it was thought that no-deal was a risk only because it would catalyse an Italian crisis. It is not difficult to see why. Good financial governance in Europe's southern EU nations has never been their forte and is largely built on chronic, ubiquitous tax evasion. Greece needed nearly a Euro 300 billion bailout, the world's biggest, that nearly wrecked the Euro but Italy's debt is much larger, making it not only too big to fail but too big to bail. With its credit rating just two notches above junk, should Italy's sovereign debt rating fall to junk status then the nation faces insolvency. One cannot rely on the guardians of fiscal responsibility in Brussels for a solution because it has consistently failed to do its chastising duty by just kicking the can down the road. If it were only Italy that was the problem it would be a less nightmarish outlook but the fact is France and other countries have also been fiscally irresponsible, leaving the EU with a ticking time-bomb.

The political threats, which should include terrorism and cyber crime, are no less scary. Political instability is global and needs to be properly assessed, along with the feasibility of alternative supply sources that can be rapidly deployed. But be of good cheer. Yet another threat on the horizon --- disruptive technology--- like 4D printing, could make logisticians' life easier because it will be much quicker, easier and cheaper to produce goods in home markets and so sidestep the problems of globally-stretched supply chains. If you are into containerised shipping, now may be a good time to jump ship.
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