Logistics and Supply Chain

Aspects that every potential supply chain executive should know to succeed in the industry


Table of Contents

  1. What critical skills should those looking to advance their careers in logistics and supply chain management have?
  2. How do you choose the best transportation form for a cargo? What elements need to be considered?
  3. What are the new challenges companies are facing in regards to air cargo security?
  4. Do you think that ecological movements, like corporate social responsibility and climate change prevention measures, will affect how logistics and supply chains work nowadays?

What critical skills should those looking to advance their career in logistics and supply chain management have?

We need to remember that the supply chain [academic plan] is relatively new. Supply chain was a field under the industrial engineering department. Now, it has moved into the College of Business. For example, in different universities from Mexico to Argentina, supply chain is another field under industrial engineering. Still, here at FIU, we host the supply chain management program in the College of Business.

It is a combination of engineering and business skills. What kind of experience do we need for a profession like this one?

We need somebody who is very analytical, can take the data provided, transform this data and provide recommendations.

It is much more than just academics. From the academic point of view, the information that is taught cannot always be applied to the field. Supply chain executives are expected to strategize, to make decisions based on quantitative data, based on analytical information. The logistics field is extremely dynamic, perhaps one of the most dynamic careers that we have in the market today.

The type of executive that is needed nowadays is someone who can digest the information, transforming the quantitative data into strategic decisions. Executives do not have the time to waste to start thinking and strategizing. They need to make big, quick decisions. Someone with supply chain experience is someone who starts making decisions and taking them very quickly based on the data that is received on that matter.

A supply chain professional must be someone with data analytics skills, artificial intelligence, networking and optimization modeling.

Also, logistics and supply chain executives should be extremely knowledgeable with Enterprise Resource Planning (ERP) systems.

People will need to manage at least one of the systems that we have in the market. The major one is SAP. We teach SAP here at FIU, but there are more ERPs in the market, like JD Edwards, Oracle and Microsoft. It will be difficult for someone to know all of them because each one is a science by itself.  Inventory is the heart of an organization because, as I say in my lectures, "if you have too much inventory, you are going to be impacting an organization negatively. If you do not have sufficient inventory, it will also impact negatively." The key is to have the right balance of inventory in each particular organization. It is easy to tell the students in a lecture environment that they must have the right amount of inventory. Very easy to say, very challenging to do.

We need someone who understands inventory management for an organization to be successful, which provides the expected returns. What is needed for this process is excellent negotiation. Establishing a supply chain requires connecting multiple activities and organizations. An executive must do a lot of negotiations with different suppliers, warehousing, transportation, etc. Using all of the analytics, they have to combine all these elements in a holistic way to provide better results.

Also, there is a section that we don't use much in supply chain - operation research, which is nothing more than the use of mathematical models to increase efficiency. Someone may say, "What are you talking about... models?" Of course, many mathematical models are involved in decisions that you make, from moving warehouses to creating warehouses in different parts of the country.

A lot of science takes place in the field of supply chain. When people start talking about logistics and do not understand the in-depth knowledge about the supply chain, and we start digging into it, we notice that it is a very complex career.

It is an area that combines different elements in the organization: engineering, optimization, finance, negotiations and more.

We will be preparing those executives who come to FIU in all of these different aspects.

How do you choose the best transportation form for a cargo? What elements need to be considered?

Almost all of the products that are coming into the chain come from different modes of transportation. Now, there is a component into this equation called 3PLs, which means third-party logistics or lead logistics providers. All of these are organizations that help the industry to move the products.

Who are these companies? These companies are what we call the travel agency of the cargo. For example, when we, passengers, travel from point A to point B, we talk to a travel agency if we don't speak directly with an airline. We also have a travel agency for cargo that is called freight forwarders. Then, the freight forwarders are the organizations that will be helping these companies to move the products because those organizations are companies that have tremendous expertise by countries. When you talk about international business, we're talking about rules and regulations by country. We are not only talking about the physical movement of the products. Physical movement means to go from the manufacturing into the port, into the vessel or into the plane. In addition to that one, what we have is the documentation or paperwork.

These two things are parallel - the physical movement of the products and the documentation. Because if the documentation is not properly done, we may risk our shipments being stuck in customs. Then we have a problem right there.

The freight forwarders are the ones who help us understand those rules and regulations. I can name some of the companies like Siva, Ego Logistics and Expedite Irish - all of these are very large organizations that people in the business need to know.

Many students come to me asking for advice, such as, "How can I start bringing my shipment from Southeast Asia into Colombia or Miami? Who can I talk to? In the business, there are different levels of freight forwarders. There are small and large organizations in the business of supply chain. In the industry, volume is key. We have to start with businesses with the same label as us. If you own a small company, you will need to find a freight forwarder small enough to give you the proper attention as a small company.

Miami is an excellent location because there are many freight forwarders in the area. Around Doral, Medley and Hialeah there are many companies that can help us move shipments. These companies will give us their directions in the forms of transportation. You do not decide the means of transportation. In reality, those companies are the ones who help you decide what is best for you.

What are the new challenges companies are facing in regards to air cargo security?

After 9/11, many rules and regulations were modified all over the world. We have strict regulations in commercial airlines as well as we have in cargo. In the case of a passenger, we have to go through TSA and ensure that we do not have any elements that could jeopardize the flight. In the cargo business, we also have different devices to scan all the containers that arrive and depart. There are procedures and processes for cargo. It is very difficult to start scanning hundreds of containers. Scanning each container will provoke a delay in efficiency. Processes, like customs deciding which are the containers that are going to be scanned - ports and airports are making processes more efficient.

With COVID-19, many regulations were created much more structurally. It could be similar or goes to the same principle as, for instance, the containers with flowers that should be refrigerated. It is extremely complex because of the mechanisms that will be needed in the case of the vaccines and their storage. Special warehouses maintain those vaccines with the correct level of temperature to keep them safe. What we have on the logistics for the vaccine is a much more controlled environment. We brought together the medical field and logistics executives to have control.

If you see the logistics based on the calculations that we have, producing 1,000 to 2,000 vaccines a day is not enough. We are running against time. We need logistics professionals and the medical field to create different points and processes to expedite the supply chain components that need to be put together. Warehousing, transportation and the medical field - all of the supply chain components should come together to expedite the process.

In reality, COVID-19 is a tremendous learning experience for supply chain management at this moment.

We are not moving fast enough. The logisticians need to start providing and recommending different ways to provide these vaccines and expedite the process. Companies such as FedEx and UPS are fundamental in this distribution process because they have the infrastructure to support it.

Do you think that ecological movements, like corporate social responsibility and climate change prevention measures, will affect how logistics and supply chains work nowadays?

In business, there are two types of professionals: the ones in the front end (sales and marketing) and the ones in the back end (engineering and supply chain activities). People in the front end dedicate their time to generate revenue; they bring money into the company. In the back end, we dedicate our time to reduce costs, which means that we reduce costs to be more profitable. This is strictly related to sustainability and the reuse of items, which already accomplishes the goals of caring for the environment, and additionally, it helps reduce costs.

For example, Amazon has been applying measures to become more sustainable such as using recycling centers and conducting surveys to ask their customers if they would like to compilate all the products ordered to have them sent in just one box. I think that measures like this impact the way supply chain and logistics work. It involves extra planning to get a positive outcome where they fulfill their duty to the customer and also become a more sustainable company.