3 Reasons STEM Education is the Future of the Logistics Industry

Today’s guest post is from Lauren Willison, the Director of Admissions at Florida Polytechnic University.

Today’s logisticians require more than a just basic planning and routing skills to succeed. This is due in large part to the continued development of cutting-edge technology such as robotics and automated machinery, which requires logistics employers to look for professionals with advanced technical expertise. Universities are matching this demand by offering logistics degree programs that focus on STEM subjects — science, technology, engineering, and math — in a hands-on learning environment.

A higher education in STEM offers the best training for the logistics field because it offers students tactical knowledge to improve logistics management and adjust to an evolving industry landscape. Here’s how:

Extensive Training in Technology

The STEM disciplines are unique in the academic world because they are quick to change and adapt to evolving industries and careers. STEM-focused institutions stay up-to-speed by offering students exposure to emerging technologies such as 3D printing. According to EFT’s 2015 3PL and Contracting Report, 19.2 percent of manufacturers and retailers use 3D printing in their businesses; however, only 1.5 percent have the expertise, knowledge and services to use these technologies effectively. STEM students have the opportunity to use 3D printers, for example, and practice producing exact replicas of parts and products. Increasing proficiency with new technology allows STEM-educated logisticians to make faster, cheaper, more reliable and more sustainable deliveries.

Cross-Disciplinary Education

An interdisciplinary education builds well-rounded logisticians and supply chain professionals who can eliminate the skills gap in the field. Although STEM focuses on four subjects, a STEM education provides in-depth training in a wide range of technical subjects that logisticians should know. With courses ranging from hazardous materials management to Six Sigma applications, students can apply textbook concepts to in-class activities modeled after real-world problems.

Logistics is no longer a field where employees can rely on just hard skills. Soft skills, such as time management and leadership ability, is essential to move forward in a logistics career. A STEM education develops a healthy combination of both skill sets, and provides a more managerial perspective on production and services in logistics. Students in STEM learn to efficiently manage logistics processes by studying concepts such as product design, inventory control and capacity management. During the process, they also learn how to work in teams, balance heavy workloads and think strategically to improve shipping and distribution processes.

Low Student-to-Faculty Ratios and Internships

Universities wholly dedicated to STEM often boast better student-to-faculty ratios. This means students receive more individualized attention from their professors, from extra help on assignments to career advice. Students who take advantage of this dynamic gain a more wholesome perspective on the logistics industry.

Additionally, some STEM universities will partner with key players in the logistics and supply chain industry. This opens up research and internship opportunities and allows students to gain valuable field experience. An internship, particularly one with a prominent or well-respected logistics company, gives students the chance to apply new skills, excel in the field and play an active role in improving the way society manages logistics.

Thanks, Lauren.

Procurement Sustentation 11: Postal Services

As per our infrastructure damnation post on Postal Services, public postal services, even though not widely used by most large enterprises, are necessary to prevent private monopolies and to force the private enterprises to be more competitive than they would otherwise have to be.

More importantly, they are often vital for large retailers that depend on direct to consumer sales (and shipping) as, sometimes, public sector service prices (for large retailers who cut good deals) are better than private sector prices, and just as quick (as many postal services have enough carriers to cover every door 5 days a week without having to add staff or miss promised delivery dates in peak seasons).

But the costs might skyrocket as many postal services go deeper and deeper into the red, and look to stabilize themselves through increased package costs (and USPS rates recently went up rather significantly in the US for parcels), and those retailers not ready for this may find themselves losing customers hand over fists who balk at shipping prices that dwarf the costs of the products they are buying. Even if the retailer has the volume to negotiate only a slight increase, any increase can be devastating.

So what can a retailer do?

The first thing it needs to do is try to lock in long term price agreements with the public sector postal services it is dependent on. That way, if prices do rapidly rise, it has the time to negotiate the best deal it can with private carriers if it has to go the private route.

The next thing it needs to do is start negotiating with multiple private carriers that can handle its volumes and try to negotiate deals as good as it has in the private sector and switch about half of it’s volume to the private carrier who wins. That way it has both options, and can even switch back to the public sector if the private sector option because more costly or risky.

Finally, it has to explore in-store or near-store pick-up options. For example, Amazon is exploring locker pick-up in urban locations that can be as fast, or faster, than direct-to-door shipping, and cheaper too. Multi-channel delivery options are the key to perpetual success.

Technology Sustentation 75: Mobile Movement (Madness)

The mobile movement, as we pointed out in technology damnation 75, is as much of a curse as it is a blessing. As we noted in our post:

  • you will be expected to work anywhere, anytime;
  • data entry will be painful as small screens, and smaller keyboards made for real mice, will be the norm (and you can thank Apple and their new mini 4″ iPhone); and
  • task time will triple as small, limited power processors, chug, chug, chug trying to deal with media-heavy websites and bloated data transfer protocols despite the fact that
  • suppliers and customers will expect a whole new level of relationship management

So what can you do?

  • define your relationship management processes and protocols and make sure new suppliers and customers know, day one, what they can expect and the level, and kind, of service you will provide
  • limit the amount of functionality that your applications will support on a mobile device to needed functionality
  • make sure mobile applications and devices support scanning/sensor reading as much as possible (bar codes, QR codes, RFID chips, etc.); manual data entry should be web-based OCR (image, upload for server processing, user override, save); etc.
  • make sure support channels are well defined so that only people who are working or on call get contacted when requests come in — don’t automatically route a non-critical support call to the primary rep at 3 am in the morning when a secondary support rep is on call half a world away at 3 pm in the afternoon (VOIP is a wonderful thing)

We’re stuck with these devices whether we like ’em or not, so let’s make sure we design for them appropriately and work-life boundaries are properly set, otherwise, we’ll all be asking:

Can I Play With Madness?

Provider Sustentation 69: 3PL Firms

Just like 3PL firms were the first provider damnation we covered, they are also the first provider sustentation we are going to cover. For many under-staffed, under-supported, and under-platformed logistics departments, 3PLs are a blessing because, without sufficient staff to analyze options or modern technology platforms to crunch the numbers, 3PLs offer the organization an instant cost savings, a substantial time savings, flexibility, and, presumably, focus. But, as we said, these advantages are there for a reason — to cloud the disadvantages that 3PLs also bring. 3PLs are a true double-edged sword that, depending on the angle you see it from, shines as bright as the sun or drowns you in the darkest night of the abyss.

As we clearly said in our damnation post, in exchange for:

  • cost savings, the organization gets IT headaches
  • flexibility, the organization gets a loss of visibility
  • focus, the organization gets a complete loss of control

Why?

  • the 3PL uses its own TMS, and doesn’t give a damn whether or not it integrates with any of your systems
  • the 3PL contracts the carriers, and if it the carrier gives you sucky service, too bad as you’re stuck with them until the contract is over (which could be a while if it services the 3PL’s bigger clients good)
  • the 3PL manages the carriers it contracts, the lanes they take, the cross-docks they use, and so on and as a result your visibility into where your stuff is at might be limited to expected ship date, current status, and expected delivery date

But all is not lost. If you properly pre-qualify, properly pre-nup, and properly (pre-)define the commitments, you might only see the bright and shiny side of the double-edged sword — the side that cuts through your problems and leaves only cost savings, flexibility, and focus in its weight. Of course, to do this, you have to make sure that:

  • during the pre-qualification phase you
    • be sure to dig-deep into the TMS, out-of-the-box integration support, data import/export options, and timelines for custom integration
    • be sure to ask a lot of questions about standard carrier contracts, common carriers, selection process, and the input you can have over it
  • during the proposal phase you
    • make sure the provider gives commitments on system integration timelines, carrier selection process, issue response and resolution times, and support availability
    • make sure the 3PL provides active references of a similar size, proof of necessary insurance or regulatory approvals, and other documentation that will be needed upon signing
  • during the final contract pre-nup phase you
    • make sure the carrier agrees to penalties if integration dates are missed, deliverables are late, or promised performance never materializes
    • make sure the organization can back out if problems persist or go beyond a certain point of severity

As we said before, the right 3PL, that is properly selected, agrees, and adheres to the right terms and conditions, will be a lifesaver for many companies, but the wrong one could bring the organization to its knees. So it’s critical to select the right 3PL.

Higher Adoption is Where the True Value of Optimization Lies

Today, Sourcing Innovation (SI) released it’s latest optimization paper, sponsored by Keelvar, on Optimization: Higher Adoption is Where True Value Lies (registration required).

As SI has said repeatedly, optimization is the ultimate sourcing strategy, but optimization is still grossly under-utilized. And this is a crying shame. Because of this, an honest appraisal of its failure to become the de-facto standard approach in all mature Procurement functions is overdue. That’s why, unlike most of SI’s papers to date, this paper looks at the softer side of optimization and starts out by taking a look at why adoption rates are historically low before discussing what is changing in the marketplace and how a radical increase in adoption could be just around the corner. An increase in adoption that is sorely needed if the true value of optimization is to be realized.

So, while previous papers focussed on defining complex sourcing and what comes next, this paper focusses on what is critical to drive adoption: the needs of the average buyer and supplier. It discusses the need for flexibility, speed, and simplicity above feature-bloat and power. The need for user-friendliness over functionality (as only a few categories require the full power of today’s optimization engines). The myths that have been holding you back. And what a modern platform needs to increase adoption not only by Procurement organizations but, more importantly, by users within a Procurement organization. The maximum value is obtained when everyone uses the optimization-backed sourcing platform. Not just a few super-users.

We discuss, for example, how a platform that supports an instant analysis after each RFP is submitted that presents the lowest total cost of ownership taking all costs, capacities, and business constraints into account provides a buyer with considerable value as the buyer can go straight to negotiations, or contracting. These new platforms prevent the buyer from having to waste countless hours on side-by-side comparison reports and off-line analysis to identify the best buy for the organization. This usability allows the platform to be applied to every category, which not only gets more spend under management, but, at the end of the day, pushes more savings straight to the bottom line.

SI strongly recommends that you download Optimization: Higher Adoption is Where True Value Lies (Registration Required) today and then, if you don’t have such a platform, do something about acquiring such a platform.

For example, the vendors who have a true optimization-backed platform will happily demonstrate the power of their platforms on one or more categories you have run in the past. Pick a direct or indirect category (not transportation or packaging, every optimization vendor can do these over-analyzed categories well) where you’ve had issues due to stakeholders not being happy, actual savings being far less than expected, supplier relationships fraying, etc. Then, contact one of the few optimization-powered sourcing solution providers, provide your data, define your constraints, and watch them demonstrate in a matter of minutes how much you could have saved.

But since that won’t be enough, because every CXO says you could always do better in hindsight, kick-off a low-cost paid trial (see SI’s previous post on why paid pilots are the future) on a few jointly-selected current, critical, categories that typically hide large savings opportunities that the organization has never been able to tease out. As the provider helps you run these events on their turn-key SaaS cloud-based offerings, you’ll quickly see the power, the ease, and the real-world results that you can use to build an internal case for acquisition of an unlimited platform license that will quickly be followed by mass adoption. And since it doesn’t cost six (or even seven) figures to get started anymore, there’s no reason not to do it.