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Cautious optimism drives supply chain planning
Friday, 25 September 2009 00:00
Council of Supply Chain Management conference emphasizes planning for the upturn

CHICAGO—Speakers and attendees at the 2009 Council of Supply Chain Management Professionals (CSCMP) annual conference in Chicago this week were cautiously optimistic about future demand and are preparing strategies around inventory levels, supplier and carrier relationships and demand visibility as to meet the coming demand.

In a session focused on Transportation Measurement, John Wooten, senior procurement manager for logistics at Clorox Co., outlined that firm's strategies for a recent truckload bid, saying thanks to the prebid planning and data collection, the bid went better than expected. Clorox worked with benchmarking firm Chainalytics on benchmarking its processes and rates.

In "Resourcing to Mexico" three panelists highlighted the trends that are making Mexico a more viable global sourcing option in the new economy. Pete Montano, vice president of sales at Con-way Truckload, said that fuel prices may have dipped recently compared to their record-high levels a year ago, but longterm they will trend up and sourcing from Asia may not make as much sense. He points out that Con-way can get anywhere in the U.S. in two to three days from Mexico, so producing products or sourcing components from that market is a useful option for industries that require quick access to U.S. consumers.

One of those companies is LG Electronics, which has several plants in Mexico. Panelist Larry Monaghan, director of transportation and logistics for LG, pointed out that truckload shipments can go direct to U.S. customers from Mexico and "steamship lines are retiring ships at a record pace" which may impact capacity and rates on the ocean when demand increases again. LG ships about 80% out of Mexico by truck and 20% by rail, he said.

In a session entitled "Collaborative Procurement Strategies" panelists provided tips on how to build truly collaborative relationships with logistics carriers. "Collaboration is easy to say and hard to do," said Paul Newbourne, vice president at LXP, a lead logistics provider. He also said shippers should ensure the carriers they are working collaboratively with want to work that way.

JB Hunt's Mark Calcagni said LXP's strategy of bidding out business in smaller, more "digestible" chunks help the carrier plan capacity. And Mike Bunnell of CR England said LXP work with his company on rearranging some lanes that were not working for England. "We changed the pick up times and made some other changes in those lanes."

Logistics Management, 9/25/2009