Anticipatory Logistics and the Corporate World

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Logistics is in many times seen as being equal to supply chain management in the corporate world. Most people use the terms interchangeably, however experts clearly see logistics as a subset of supply chain management. Supply chain management in the corporate world entails much more than just logistics. However the experts assert that logistics is the largest and most important component of supply chain logistics. The council of Logistics view logistics as a way of ensuring customer needs are met through proper planning, controlling and implementing efficient flow of goods, services and information from origin to place of consumption. This paper looks at an emerging concept called anticipatory logistics and its applicability to the corporate world.

Anticipatory logistics is a comprehensive system entailing information which seeks to forecast or anticipate future needs at the consumption level so that the supply chain can be structured to adequately meet customers’ needs. It incorporates how inputs get to the central processing point as well as how outputs get from the point to the consumption point. The American army employs anticipatory logistics in managing the supply of ammunition, fuel and maintenance requirements. They employ a system called C4I (computer, command, control, communication and intelligence) and other Department of Defense branches. Logistical operations are an important part of military operations. Consequently, planning and coordination requires a good understanding of when military personnel need which equipment and in what quantities (Louis, 2006, p10)

Corporate supply chain management just like army supply chain management consists of three main phases. Production, transformation and order management. Procurement incorporates the different suppliers and the various inputs they offer. Transformation involves the processing activities which transform the inputs to outputs. Order management seeks to ensure that the output is availed to customers in a timely and cost effective manner. The striking difference is that in the army supply chain management, there is depot maintenance in addition to suppliers and the customers are soldiers who in most cases may not be as widespread as customers in the corporate world. Again the movement in the corporate supply chain both in the transportation and the distribution and warehousing functions is largely from the suppliers to the customers, however in the army supply chain management the movement is two way. This is mainly because in military operations, equipment whose functions have been accomplished or which require comprehensive repairs have to be shipped backwards to the place of origin. This is unlike in corporate supply chain management where goods which have successfully reached the customer rarely move backwards all the way to the original suppliers of inputs. This backward movement within army operations forms a significant part of the entire logistical arrangement.

Improper management o supplies in the corporate world may lead to delays in production or shortages in the market resulting in the loss of revenues which is against the goals of the corporate world. On the other hand in the army, mismanaged supply chain can result in loss of lives at the battlefield which is higher than loss of revenues in the corporate world.

In the application of anticipatory logistics within the army, there is heavy emphasis on prediction of the needs of specific needs for different combat needs at different times. These predictions are conducted by experts in the military who fully understand the combat missions as well as the environment in which the combat missions operate mainly the enemies and their capabilities as well as physical environments.

In the same way, it is very possible to accurately predict the market requirements at specific times. This information can thus be effectively utilized to plan for patterns of procurement, processing and delivery to customers at the lowest costs.

Corporate as well as the army have to meet two important but diverging needs. Corporate wish to expand their operations and at the same time be able to effectively meet the requirements of the existing clients. This necessitates the principles of supply chain management. Customer needs are dynamic. This implies anticipatory logistics aid in handling future pricing and quantity issues. The army on the other hand seeks to minimize on logistical footprints while at the same time meeting the needs of the forces on the ground. Meeting customer requirements by the businesses is similar to meeting the needs of the forces on the ground for the army. This commonality is a major platform justifying the merger of anticipatory logistics as used in the military into the world of business. The application of transportation, order management as well as information and technologies to meet these needs also offers a point of convergence (Lenzini, 2002, p3).

The army not only predicts the needs of the combats but also determine future failures in the supply system as well as monitoring the status of the supplies through tactical internet. This can also be effectively applied in the corporate world. Businesses can make preparations for additional storage space, transportation, distribution as well as other components of supply chain. In addition, anticipatory logistics can enable prior warnings to logistical leaders to help them prepare for anticipated future challenges.

Despite these striking similarities in operations between the army and the corporate world, there are some challenges which could arise in the application of anticipatory logistics in the corporate world. The most important challenge is presented by the fact that the corporate world utilizes the supply chain on a much wider continuum than the military. The concept is only applied in mission requirements within the military. However, businesses need to engage all stakeholders from suppliers all the way to consumers. Translating the technique applied in only one element to the entire supply chain may not work mainly due to the fact that the different stakeholders are different entities who may have differing goals (Peter, 1988, p14).

In addition, there are six main factors of success in supply chain management. They are customer needs, concerns for the environment, issues of globalization, competitiveness, information and communication technologies as well as government regulations. The army on the other hand the army has seven essential success factors namely; customer needs, joint interoperability, department of defense regulations, information and communication technologies, environmental concerns including the enemy forces, and missions requirements. Despite some striking similarities, it is clear that there are enormous differences in the two sets of success factors. This then means that the corporate has to identify the gaps in these success factors and seek ways of closing them in order to successfully employ anticipatory logistics. This could require a great deal of creativity and expertise.

In conclusion, it is not only possible but also wise to adopt anticipatory logistics from the military to the corporate world as it would have the ultimate effect of improving the efficiency in supply chain management. However the differences between the army and the business situation must be taken to full account, the most important being the fact that the business would have to employ it in the entire supply chain unlike in the army where application is limited to operations.

References

Lenzini, J. (2002). Armed forces, Logistics Vol. 34(5) p.11. Web.

Louis W. (2006): Marketing Channels’, Prentice-Hall, 7th Ed.

Peter J. Metz (1988): Supply Chain Management, Supply Chain Management Review.

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Anticipatory Logistics and the Corporate World

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