In this episode, Consulting Logistics host, Kyle MacNaught, will chat with Andrew Clark, founder of Logistics Help. Andrew is on a mission to help small to mid-size enterprises implement high-performance tactics and technology to their supply chain, so they can scale up without stress. Andrew is passionate about logistics and how getting this element right in business can help elevate them to the next level. In this conversation we will discuss:
Tell us a bit about yourself and where you started.
Andrew started in footwear manufacturing and fell in love with operations management. He then decided he wanted a career change and moved to pharmaceutical manufacturing in Australia. That is where he learned his foundation in warehousing and distribution as well as logistics. Andrew loves being the intermediate between operations and IT. He then went to work for a logistics manager with a pharmaceutical distributor and after a while their business was sold into a joint venture and Andrew went his own way. Following this, he ended up working for a business in Australia called Logistics Bureau. He drifted through subcontract roles consulting and doing project work, he then thought to himself he has to make this his own business and that's when Logistics Help was born. As time has gone on his business has continuously grown. Now he is looking at how he can serve the small and medium business that is very underserved at the moment. In the next few years a lot of his focus is going to be beginning technologies in the cloud to the e-commerce world.
Let's discuss Coronavirus from the logistics point of view - what was your experience with coronavirus over in Australia?
Australia has had a better experience as a whole with coronavirus largely due to its own geographical isolation and they shut down in terms of the curve very very quickly. They are worried about infections and not so many deaths because they have kept such a good lid on the virus. The country had a period of lockdown but have since emerged and is doing well with occasional cities going into lockdown if there is a flareup of infections.
What surprised you in terms of logistics?
There was a huge impact on the global supply chain as far as air freight goes. Air freight became super premium and prices tripped because a lot of air freight travels in the belly of passenger air crafts and people were no longer flying. Air freight capacity was restricted to those businesses that had their own dedicated cargo fleet. There was just a crazy markup on things like hand sanitizer and the amazing toilet paper debacle that came to be.
What processes changed throughout the pandemic?
Paper is obsolete in Australia right now everything is electronic. There is not a lot of contact in business deliveries. The hospitality industry took the biggest hit in Australia because they are a big tourism industry. The shutdown of this industry impacted all the way up the supply chain because the market just disappeared.
How do you think some businesses are going to respond to how they stock reacted during coronavirus?
There comes an opportunity to sell stock that you wouldn't normally sell. When the thing people want is out of stick they go and look at the old model. We are spoiled for choice and supply but when that is at risk you see hoarding and panic buying. This can turn a normal supply chain to a dysfunctional supply chain as seen in the toilet paper debacle.
Now that people have dealt with the availability crisis what is a good metric to measure where their slobs are?
It really is important to look at your slow moving and potentially obsolete inventory. You look at the sales rate of your product and decide if it's critical and needs to be kept on the shelves or if you can wait a week to order it from your supplier. An obsolete piece of inventory is inventory that will not sell at all, leaving it there can clog up your warehouse and is not worth it. If something hasn't sold for 3 months then you should be looking at how to get rid of it. Think of it as a tenant that does not pay rent.
What technology do you think is going to be vital in a warehouse to accelerate e-commerce?
It starts off with a web store where they print the orders and look for the stock in the warehouse. That is the ultimate non scalable process. The typical route now is to use an inventory management system that is given additional functionality in terms of order management and imagery management. The next level that is usually missing from small and medium business is the warehouse management system. What a warehouse management system does is it is specifically designed to run your warehouse. This ties into all your other system and increases efficiency.
The future of the supply chain is going to be personal - where do you think it is going to be felt the most in business?
Retail is the big evolution from physical stores to personal delivery. It's not just retail it is also in B to B. Anything that an individual uses within a business has the potential to go down to the personal level. What that does in the supply chain is make it much more complex and makes the process more labor-intensive. The level of effort is so much higher but at the end of the day it is more cost effective and has less waste. In the future Andrew believes we are going to see more crowd-sourced freight.
What should organizations be doing to future-proof their supply chain in the new normal?
The cloud is the big trend in software right now. The cloud gives you easy connectivity that is just not possible any other way. You could do all your electronic ordering and invoicing in the cloud and the friction gets removed. That is where the future is headed - into using the cloud.