The Role of Transportation in Supply Chains and Business

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I think it comes from the penny wise dollar foolish camp or this hardcore procurement mentality that says let's just beat up the suppliers that stops us from making wiser decisions in the supply chain. There's a model that we have developed and we've been teaching in this program for years and years that helps tie transportation to the rest of the supply chain. So anyway, I hope by now you have a good feel for why we're going to study transportation and this is going to be a little bit about how transportation fits into the supply chain as a whole. Anybody want to guess what percent of the people who work in logistics have formal training in logistics? Oris, what do you think? 15 is a good guess. It's about 10%. Anybody want to guess that what portion of logistics projects are successful? 5%? It's a pessimistic group. (37:55 - 40:32) It's about 30%. If the project involves software it goes to about 15%. Those two things are related. If you're handing people projects, major projects and they have no formal training in that area, the odds of success are going to be very low. I like to use the Golden Gate Bridge as an example. Suppose you've never been to San Francisco, you've never seen the Golden Gate Bridge and you're on your bicycle. There's nobody around, no cars, no RVs, nothing. You and the bridge. You're trying to decide whether to ride your bicycle across the bridge and you look across and boy that view of the city must be spectacular. If I could just get on the other side of that bridge, it must be spectacular. Riding across that bridge must be a euphoria. But you look down and it's a long way down. There could be sharks, alligators, big waves. It's a long way down. I don't know about this. So you're trying to gather information about whether to ride your bike over that bridge or not. And you look down and there's a little plaque that talks about the person who designed the bridge and managed the whole project. You're reading along and it says they barely graduated from high school and they almost got a degree in art history. What did that just do to your confidence level in riding your bike across the bridge? Nothing against art history by the way and nothing against graduating from high school. It's just for that particular role, what did that just do to your confidence in riding over the bridge? It reduced it significantly. For me, I'm hightailing it the other way. I think maybe this is a figment of my imagination that this bridge is actually there. What would you have liked to have read on that plaque? Graduated from Georgia Tech with a dual degree in mechanical engineering and architecture. Maybe even a triple degree with some civil engineering thrown in there. Maybe even a quad degree with some hydrodynamics stuff. That's the kind of thing you'd like to read. What does that have to do with what we're talking about? Logistics is like a bridge.

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