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Home » it may be a pain in the ass, but you'd be crazy to complain!
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it may be a pain in the ass, but you'd be crazy to complain!

May 1, 2006
Mitch Mac Donald
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It's not often that something stops me midsentence as I'm writing my monthly column. And it's rarer still that something would drive me to abandon a nearly completed column to write about something else. But that's just what happened with this month's edition.

As I was pounding away at the keyboard (rambling on about the staggeringly high percentage of containers that enter the country without being inspected), our very capable Web editor, Jeff Thacker, sent over the summary findings from DC VELOCITY's first annual Salary Survey. And quite frankly, what he sent stopped me in my tracks. The survey results showed that the average DC VELOCITY reader earns a salary that runs well into the six figures—and yes, I said "average" reader. (For more on the survey results, see the feature story on page 28.)

While I was still reeling from that news, I received a new White Paper from our friends at IBM. Big Blue recently completed a study that indicates that logistics has finally moved from the basement to the boardroom. Taken together, IBM's report and our Salary Survey results point to one conclusion: Not only are leading corporations paying more attention to the supply chain process than in the past, but they're also paying big money to hire the best people they can find to manage this critical operation.

As IBM reports in its White Paper (much of which, candidly, falls into the "tell-us-something-we-don't-alreadyknow" category), there are several reasons for the newfound interest in logistics operations. The most obvious is a four-letter word: cost. Global logistics costs represent an increasingly large percentage of sales. In fact, they now eat up more than 10 percent of sales revenues for most companies. Consequently, logistics costs are beginning to erode, or at least counter-balance, many of the economic advantages of global sourcing.

IBM goes on to say: "Traditionally, global logistics has been almost an afterthought when it comes to corporate strategic planning. Because it's an unavoidable cost, logistics has been seen as a complex detail that can be attended to in the margins of the business. But this is no longer the case. With the rising strategic importance of global sourcing, logistics planning is moving toward center stage.

"You source globally to keep costs down, and it doesn't make sense to let the rising costs, longer transit times and complexities associated with global logistics erode those savings. It's no longer possible to make a decision about where to obtain parts, locate a manufacturing facility or open a retail outlet without first understanding the impact on global logistics.

"CEOs and CFOs are increasingly alarmed by rising inventory, higher levels of working capital, missed deliveries and glitches in lean manufacturing performance, all of which can result from poor global sourcing strategies. So, as the strategic dimension of logistics planning becomes more apparent, senior management is looking for ways to get the most value and competitive advantage from this business function."

The bottom line? First, logistics professionals finally have the ear of their companies' corporate officers. Second—and perhaps the best news for logistics professionals—it appears that corporations are willing to pay what it takes to recruit (and retain) top-level talent.

As a result, you might be feeling a little discomfort in your posterior as you take that long-sought-after seat at the boardroom table. But you'd be crazy to complain. Likely as not, it's just the unfamiliar sensation of sitting on a very fat wallet.

Business Management & Finance
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    Mitchmacdonald
    Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.

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