Transportation Trends: The last mile, history repeating

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

December 2017

It’s December and time once again for our annual Executive Guide to Supply Chain Resources. This is a comprehensive guide to services, products and educational opportunities targeted specifically to supply chain professionals. As with years past, we’re also featuring several articles we trust will offer food for thought in your supply chain throughout the coming year.

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As King Solomon noted nothing new is ever really created, just updated to meet the current environment or situation. This is true of last mile logistics delivering products to consumers. When you look beyond the hype of all the new, innovative services and suppliers in the logistics space and view things through the perspective of the past, we find this delivery service capability has been used efficiently and successfully in the past. We only need to look back to the 1940s and the successes America experienced on the battlefields of World War II.

Rise of the importance of final mile logistics

As the U.S. emerged from WWII, military tacticians credited a majority of the U.S. military’s success in the European and Pacific theaters to the U.S. capabilities of mass production enabling the buildup of large inventories of supplies such as ammunition, clothing, food and vehicles, and the ability to combine civilian and military storage and transportation operations to move vast quantities of supplies in an efficient, expeditious manner and to deliver ammunition, materials, personnel or vehicles to the battlefield when, where and in the right configuration needed to support military objectives. Yet, the logistics lessons regarding the importance of the delivery function getting the product to the end user were quickly forgotten as the war concluded.

Shifting from a wartime to peacetime economy unleashed years of pent up consumer demand for goods as disposable incomes rose. The mass production processes that produced war supplies were quickly adapted to the manufacture of consumer goods. However, the processes of efficient distribution methods to deliver goods to the point of consumption were not given as much emphasis. Producers and retailers placed more emphasis on the production of inventory and locating it at central retail locations while minimizing the importance of transportation to satisfy consumers. Consumers were content to acquire their products wherever they were available as long as they were purchased at the “right” price. Even after Bernard J. (Bud) LaLonde, the noted Ohio State University logistics professor, provided research showing the positive impacts efficient delivery methods could have on consumer satisfaction and profitability, manufacturers and retailers continued to rely on mass production and large inventory levels to meet consumer demand.

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