Operations Advantage: The wisdom of the crowd

This is an excerpt of the original article. It was written for the November 2017 edition of Supply Chain Management Review. The full article is available to current subscribers.

November 2017

There are strands of sustainability and corporate responsibility through much of this month’s issue. James T. Prokopanko, the former CEO and president of The Mosaic Company, details how corporate responsibility became his compass for leader ship when he took over the reins of the company back in 2007. Similarly, Joseph Ludorf, the executive director of supply chain for Cipla Medpro, details how revamping the planning process enables the South African pharmaceutical company to prof- itably supply drugs to underserved populations on the continent as part of its corporate mission. We round out the issue with five tips for intelli- gent risk taking in…

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A perfect storm is brewing for supply chain managers, third-party logistics suppliers (3PLs) and the carriers they work with. Despite a growing global economy and expanded consumer spending in 2016, U.S. logistics costs declined 1.5% due to overcapacity and rate pressures that had shippers asking for—and getting—rate reductions. There is less room for easy cost cutting in 2017-2018, however, and the traditional areas where shippers look for more value—warehousing and transportation—show less potential for optimization.

The ray of sunshine in this storm is an innovative approach to logistics network design that benefits both shippers and suppliers. Known as crowdsourced network optimization, it builds on traditional optimization, taking it further with crowdsourcing techniques and advanced analytics and strategy.

A perfect storm is brewing for supply chain managers, third-party logistics suppliers (3PLs) and the carriers they work with. Despite a growing global economy and expanded consumer spending in 2016, U.S. logistics costs declined 1.5% due to overcapacity and rate pressures that had shippers asking for—and getting—rate reductions. There is less room for easy cost cutting in 2017-2018, however, and the traditional areas where shippers look for more value—warehousing and transportation—show less potential for optimization.

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