Introducing the strategic visioning series

Journal of Business Logistics, 1998 by Bowersox, Donald J

A significant part of Michigan State University's proposal to have Dr. David J. Closs be appointed Editor of The Journal of Business Logistics, was his plan to create a regular series of articles devoted to strategic visioning. The strategic visioning articles were positioned to help highlight trends and project the future conditions within which logistics will be performed. It was proposed that a series of articles be solicited from acknowledged visionaries in the logistics industry in an effort to increase the relevance of JBL to practitioners. It was anticipated such articles would push the frontiers of logistics thought, as we know them today, stimulating constructive controversy and debate. I am delighted to serve the Council and assist Dr. Closs in the capacity of Strategic Visioning Editor.

During the past month, I have written all recipients of the Council's Distinguished Service Award to solicit their participation as authors of the visioning articles. This distinguished group of executives and academics have previously established their professional credentials by virtue of their contributions to the logistics discipline. I asked each individual to set aside appropriate time to author an article describing their vision of logistics and the implications for professional logisticians. Hopefully, this request was sufficiently vague to fully unbridle each potential author's creative imagination. Despite the enormous progress that has been made in the logistics profession since the Council was founded in 1963, most people close to the profession firmly believe we have only experienced the tip of the iceberg of massive changes that will be associated with the maturing of the information age. In 1980, when transportation was, for all effective purposes, deregulated, the nation's Gross Domestic Product (GDP) was 2.71 trillion dollars. As a nation, we were spending approximately 17.2 percent of GDP to satisfy logistical requirements. In 1996, the most recent year for which statistics are available, we spent 797 billion dollars for logistics which equated to 10.5 percent of GDP. Another way of looking at what has been achieved is to relate what the cost of logistics would have been in 1996 had we not achieved these efficiencies. In other words, if we had spent 17.2 percent of the 7.6 trillion dollar 1996 GNP, the cost of United States logistics would have been 1.3 trillion dollars. It's clear that the business of logistics is big business.

It's clear that real progress has been achieved over the past three decades in relative efficiency. However, the future will demand much more than cost reduction. As the industrial age transforms into the information age, we can expect unprecedented discontinuities throughout our nation. The logistical professional will be severely challenged in at least four ways. First, the relevant operational paradigm will shift from cost reduction to value creation. This shift, the early stages of which are underway, reflects our struggle to disregard practices that were essential and relevant to the early 1900s and post-World War II commerce. These traditional practices, as well as related businesses, are increasingly losing their relevancy in the world we live in today. For the most part, these practices and institutions that perform associated work were designed to overcome barriers such as material scarcity and inadequate transportation capability that have long been non-issues in our society. What is happening throughout industry is literally a reinvention of our channels of distribution and methods of logistical operations. The adversarial structures that dominated institutions of yesterday are giving way to cooperatively-based supply chain initiatives. These new response-based processes are focused on creating maximum end-consumer value. The appealing vision of the future is to reconfigure logistical processes to make them more relevant for end-consumers while simultaneously increasing quality and productivity. Put another way, the challenge for the future will increasingly be to continuously perform better, using fewer and fewer resources.

Second, the logistical mission of yesterday is being replaced by a broader concept driven by social responsibility. No longer is pure focus on the economics of the distribution process acceptable. Likewise, it is no longer satisfactory to meet customer requirements without taking into consideration factors beyond lowest possible total landed cost. Logistical concerns must increasingly extend to satisfying the many different requirements that necessitate reverse movement. Such reverse logistics demand attention to much more than simple product and material reclamation. The requirements embody all aspects of environmental impact from earth to air as well as long term sustainability of natural resources. The rapidly growing doctrine "no acceptable garbage-everything has a potential use" has appeal but no relevancy without a cost effective national infrastructure capable of moving both virgin and recycled product in an environmentally safe manner. There is much work to be done in this important area.