Take an “attaboy” or “attagirl” for your role in the last 10 years of global prosperity.  Historically, prosperity never lasted this long.  Andy Kessler, writing in the Wall Street Journal, believes that JIT inventory and better systems have sustained these long periods of prosperity.   

 

For anybody who has played the beer game, you know that time lags in getting information cause problems.  A one-time spike in demand drives wild overproduction.  This all comes to a crashing halt as inventory balloons force a shutdown of production.   Today’s systems provide quick feedback – so inventories are held in check, eliminating the need to kill all production rapidly.  Andy credits ERP systems but with this caveat: “But here’s the dirty little secret:  Enterprise software…is notoriously hard to use, nasty to implement, and a royal pain to maintain.” He names and credits consultants with helping companies make these ERP systems run.  I am not so sure that ERPs should get the credit – rather, scanner data, VMI, etc., identify what is really happening.

 

My bottom line is that the things we logisticians are doing have smoothed out business cycles – let’s take credit!

 

The average national spot rate for flatbed trailers has fallen 18% in June from a year ago to $2.30/mile. The average spot rate for van trailers has also fallen 18% year-over-year to $1.89/mile. (Source DAT)