Take an “attaboy” or “attagirl” for your role in the last 10 years of global prosperity. Historically, prosperity never lasted this long. Andy Kessler, writing in the Wall Street Journal, believes that JIT inventory and better systems have sustained these long periods of prosperity.
For anybody who has played the beer game you know that time lags in getting information causes problems. A one-time-spike in demand drives wild over production. This all comes to a crushing halt as inventory balloons forcing a shutdown of production. Today’s systems provide quick feedback – so inventories are held in check, eliminating the need to rapidly kill all production. Andy credits ERP systems but with this caveat: “But here’s the dirty little secret: Enterprise software…is notoriously hard to use, nasty to implement, and a royal pain to maintain.” He names name’s and credits consultants with helping companies make these ERP systems run. I am not so sure that ERP’s should get the credit – rather scanner data, VMI, etc. identify what is really happening.
My bottom line is that the things we logisticians are doing has smoothed out business cycles – let’s take credit!
The average national spot rate for flatbed trailers has fallen 18% in June from a year ago, to $2.30/mile. The average spot rate for van trailers has also fallen 18% year-over-year, to $1.89/mile. (Source DAT)